Where Are They Now? Checking In With Four Alzheimer’s Disease Start-Ups

Four start-ups previously profiled in START-UP – CoMentis, EnVivo Pharmaceuticals, Avid Radiopharmaceuticals and AC Immune SA – show how some biotechs have successfully ridden through the rough patches any company brave enough to tackle Alzheimer’s disease will likely face.

• It wasn’t so long ago that scientists and investors thought that they understood the basic biology of Alzheimer’s disease, but numerous spectacular clinical failures have raised doubts about even the most basic understanding of the disease.
• Once ready to tie up early with promising biotechs, especially those with assets targeting the so-called amyloid cascade, Big Pharma now takes a show-me attitude toward even promising Alzheimer’s drugs and diagnostics, leaving a class of venture-backed start-ups caught in the fiscal “valley of death” between early-stage hints and the definitive clinical proof now needed to win partnerships.
• Some in Big Pharma, most notably Roche, think the field is becoming increasingly tractable scientifically and invest in novel therapies because of the obvious unmet medical need and the belief that emerging biomarkers may enable diagnosis prior to the onset of dementia when drugs are likelier to work.
• Four start-ups previously profiled in START-UP – CoMentis Inc., EnVivo Pharmaceuticals Inc., Avid Radiopharmaceuticals Inc., and AC Immune SA – show how some biotechs have successfully ridden through the rough patches any company brave enough to tackle Alzheimer’s will likely face.

Alzheimer’s disease (AD) researchers used to be fairly confident about what they knew – and what they didn’t. Given the disease is characterized by deposition of amyloid-β (Aβ) plaques in the brain regions serving memory and cognition, many made the leap that interfering with the amyloid cascade to lower Aβ production or aggregation would modify the disease. The race was on to develop small-molecule drugs inhibiting Aβ production or biologics removing the misfolded amyloid proteins Aβ and tau, to keep them from gumming up the brain’s workings. But this theory has been turned on its head in recent years, with thought leaders increasingly wondering if Aβ plaques are symptomatic of the disorder rather than a causative agent. This doubt has been fueled by the realization that some elderly people with a large amyloid burden never show signs of cognitive impairment. More damning, a recent, very costly late-stage trial of a drug that seemed to clear or reduce lesions in earlier studies not only failed to slow disease progression but actually hastened it.

These issues have led drugmakers like Eli Lilly & Co., Pfizer Inc., and AstraZeneca PLC to rethink their Alzheimer’s drug development programs. Fearful of the clinical risk and associated high cost seen with AD trials, many drugmakers are loathe to partner even promising mid-stage biotech clinical compounds, let alone those earlier in development, without clear proof of safety and efficacy. With the IPO window shut, venture capitalists, seeing the pullback by Big Pharma from the space, mostly refuse to support companies through the longer and more costly trials needed to reach a deal. Caught in what some now call the fiscal “valley of death” between a compound’s early promise and a package of sufficiently advanced, clinical proof-of-concept data, few biotechs have the financial wherewithal to develop their AD pipeline’s true value. The danger of this financial catch-22 is that the lack of scientific investment means the biopharmaceutical industry may never uncover compounds with real benefit.

Meanwhile, nobody doubts the huge unmet need: today 5.4 million Americans are living with Alzheimer’s and the number is expected to reach 16 million by mid-century. The current total care cost of $172 billion is projected to hit $1 trillion by 2050, according to the Alzheimer’s Association. There’s very little anybody can do for today’s AD sufferers. At present a small number of approved cholinesterase inhibitors and N-methyl D-aspartate (NMDA) antagonists provide limited symptomatic benefit but don’t slow disease progression. Even worse, they are associated with numerous adverse reactions and generally only work for a short period of time.

Things looked much brighter just a few years ago. Early confidence in the amyloid-cascade thesis drove a flurry of dealmaking and investment well into 2008. That year, for instance, Astellas Pharma Inc. paid $100 million up front, plus milestones of more than $660 million, to CoMentis Inc., one of the four companies revisited below, to license worldwide rights to its Phase I β-secretase (BAC) inhibitor, CTS21166. [See Deal] Two years earlier, Pfizer Inc. paid $500 million in cash to acquire Rinat Neuroscience Corp. to obtain the biotech’s preclinical amyloid-binding monoclonal antibody, RN1215 (ponezumab), and that company’s then widely coveted antibody painkiller, RN624, tanezumab. [See Deal] (See (Also see "Pfizer Sets New Biotech M&A Record" - In Vivo, 1 May, 2006.).)

Such up-fronts are a drop in the bucket relative to the likely revenue an actual disease-modifying Alzheimer’s therapy could generate. Prior to release of less than stellar Phase II data, Credit Suisse analysts predicted peak annual revenues of up to $6 billion for the monoclonal antibody bapineuzumab being developed by Pfizer, Johnson & Johnson, and Elan Corp. PLC. In 2009, JNJ doubled down on its existing bapineuzumab bet, spending $500 million up front to acquire Elan’s share of the molecule, as well as committing another $1 billion to purchase an 18.4% stake in the specialty pharma. [See Deal][See Deal] (See (Also see "Elan's High Wire Act Finds a Semi-Safe Net" - In Vivo, 1 Jul, 2009.).)

However, all of these high-profile AD tie-ups have so far been busts. Astellas and Pfizer appear to have dropped CTS21166 and ponezumab, respectively, after small initial Phase II studies, without giving word as to why – though industry observers believe side effects are the likely culprit. And those observers aren’t holding out much hope for bapineuzumab either, following its dubious Phase II data that also raised possible safety concerns.

Amyloid Thesis Paralysis

If the amyloid thesis was clearly under siege by the start of 2010, another crippling blow came late that summer when Lilly halted the Phase III study of its gamma secretase inhibitor semagacestat, an upstream blocker of Aβ production. The molecule was one of two advanced Alzheimer’s candidates handed off by Lilly to NovaQuest, the partnering group of CRO Quintiles Transnational Holdings Inc., for final clinical testing. [See Deal] Dismayingly, the reasons for semagacestat’s clinical halt: possible cancerous side effects and actual worsening cognitive decline in patients taking the drug relative to placebo. (See (Also see "Lilly To Cease Development Of Alzheimer's Drug" - In Vivo, 1 Sep, 2010.).) The results spelled trouble for the amyloid thesis, and those concerns have developed into investment and dealmaking paralysis throughout the AD space. As a result, “the Alzheimer’s world has changed,” says Kees Been, president and CEO of Forum Pharmaceuticals Inc., another of the four previously profiled AD biotechs revisited here. Much to his dismay, the company’s early expectations that satisfactory data from a Phase Ib/IIa AD study would be enough to generate a partnership were dashed. After showing solid data to numerous potential partners, Been reports, “To a man they all said, ‘That’s really nice. Show us Phase IIb.’”

Not surprisingly, few young companies can finance the studies required to garner potential partners’ commitment. As a consequence, AD deal flow and investments have slowed to a trickle. Since the start of 2011 through October, there have been just seven alliances with any Alzheimer’s ties, according to Elsevier's Strategic Transactions; over the same period, venture capitalists committed only $58 million to companies expressing possible interest in targeting AD (and nearly all of those had a much broader neurodegeneration focus). Compare the same 10-month stretch of 2006: there were 28 AD-related alliances and venture investors put $151 million into 10 AD-focused companies.

Alzheimer’s companies that have survived their treks through the fiscal valley of death have done so via two mechanisms. Companies such as EnVivo have been fortunate enough to have committed investors with exceptionally long horizons; companies like CoMentis, AC Immune SA, and Avid Radiopharmaceuticals Inc. (now part of Lilly [See Deal]), also revisited here, meantime, took full advantage of partnering interest when it existed, giving them sufficient cash and freedom to operate during this leaner period. AC Immune’s CEO Andrea Pfeifer, PhD, emphasizes the value of her company’s 2006 collaboration with Roche’s Genentech Inc., noting that in addition to providing “significant up-front” cash the alliance legitimized the company’s discovery platform. [See Deal]

For Roche, Alzheimer’s Looks Tractable

Roche’s move into the Alzheimer’s space offers a bright spot amid an otherwise gloomy prospect for the field. “The science is maturing,” insists Luca Santarelli, MD, global head of neuroscience disease translational area, at Roche’s headquarters in Basel. While others flee or sit on their hands waiting for their existing Alzheimer’s pipelines’ outcomes, Roche, a relative newcomer to the space, has made AD one of its priorities for a beefed up CNS presence. He asserts, “The area has become tractable. It’s not just the [new] targets but [better insight into] how to translate science into medicine.”

According to Santarelli, about 80% of Roche’s CNS research is done in-house. But, in contrast with other Big Pharmas of late, the Swiss drugmaker has been willing to augment its Alzheimer’s R&D via external early-stage dealmaking. (See Exhibit 1.) The 2006 AC Immune deal, for one, now appears to be bearing fruit as a novel Aβ antibody labeled RG7412 (MABT5102A) discovered with the company’s platform went through a promising Phase I study. In April, Genentech launched a Phase II trial.

Despite the many questions surrounding the amyloid-cascade thesis, Santarelli expresses remarkable optimism about prospects for coming up with effective disease modifying agents – at least if the right methods are pursued in selecting patients. He thinks current knowledge provides a better basis for studying drugs than the previous generation’s failures and advocates changing the design of AD clinical trials to enroll patients who are at an earlier stage of the disease. At a minimum, he says that needs to be five years prior to the onset of dementia. Most who study the disease now agree with him that “once the disease has advanced, there’s so much damage to the brain that it’s harder to intervene.” But diagnosing Alzheimer’s in its prodromal phase when signs of mild cognitive impairment first appear remains controversial. No validated biomarkers exist for early diagnosis or predicting disease progression. Presently, an Alzheimer’s diagnosis can only be confirmed after death.

Prodromal intervention, when quality of life remains relatively high, also sets the safety bar much higher for a drug’s approval than for compounds aimed at advanced disease sufferers. Santarelli isn’t naïve about the hurdles facing the field, particularly the difficulties in financing high-risk studies. He says the industry will require government, academic, and foundation help. One exemplary model he points to is the Alzheimer’s Disease Neuroimaging Initiative (ADNI), a massive multi-site academic research effort jointly funded by the US government and a consortium of pharmaceutical firms acting through the National Institutes of Health.

Exhibit 1

A Review of Roche’s Alzheimer’s Dealmaking

Company	Therapeutic/Technology	Analysis
MorphoSys AG	Novel anti-Aβ antibody, gantenerumab	The biologic came through the phage-display research collaboration begun in 2002. Last month Roche announced completion of its successful pilot Phase I study and the start of a much larger study.
Evotec AG	EVT302 (R1577) monoamine oxidase-B (MAO-B) inhibitor	In September 2011 Roche paid $10mm up front, plus $170mm in development milestones, $650mm in sales milestones, and tiered double-digit royalties for return of a compound it previously licensed to Evotec as a smoking cessation agent. After failing in that indication, R1577 showed potential value in Alzheimer’s.
reMYND NV	Identify and advance new treatments using yeast screening technology for protein misfolding diseases	In return for less than $1mm up front, the 2010 deal focuses on two preclinical-stage compounds that may block neurotoxicity caused by the alpha-synuclein gene in Parkinson’s disease and by tau in Alzheimer’s.
AC Immune SA	Antibody MABT5102A (RG7412)	Genentech, now part of Roche, licensed exclusive worldwide rights in 2006 to specific Aβ antibodies emerging from the biotech’s SupraAntigen platform. Total value included significant up-front cash and could exceed $300mm in milestone-based payments. In May of this year, Genentech announced launch of a Phase II study of RG7412.

Sources: Elsevier Strategic Transactions; Company reports

CoMentis Inc.

CoMentis Inc. was the product of the 2006 merger between two existing AD biotechs, the then five-year-old Zapaq Inc. and the two-year-old Athenagen Inc. (See .) In retrospect, the combined company’s path has taken an ironic twist, doubling back on a path it had seemingly abandoned.

Based in Oklahoma City, the original Zapaq was co-founded by Jordan Tang, PhD, of the Oklahoma Medical Research Foundation, to exploit his expertise as the first scientist to determine the structure of an aspartic protease and explore its basic mechanisms. The β-secretase (BACE) gene encodes the aspartic proteases known as β-site amyloid precursor protein (APP) cleaving enzymes. BACE inhibitors can act on APP to clip out the 42-base peptide Aβ, the supposed culprit clumping together into amyloid plaque. Zapaq, like many other firms, bet that inhibiting BACE would turn off the amyloid cascade at the faucet. In July 2006, Zapaq merged with Athenagen, another Sanderling company, which only months before had acquired Osprey Pharmaceutical Co. for that company's assets in the nicotinic acetylcholine receptor space. [See Deal] [See Deal]

CoMentis optimized its lead BACE-inhibitor Alzheimer’s candidate, CTS21166, and took it through a Phase I study. Then in 2008, Japanese pharma Astellas Pharma jumped in, licensing exclusive worldwide rights to the compound plus other candidates from the BACE-inhibitor program. The companies also agreed to research future molecules in the class. The deal was lucrative for CoMentis. Astellas made a $100 million up-front payment and took responsibility for up to $660 million in development milestones for the main candidate, plus the Japanese pharma agreed to cover the costs of clinical trials up to Phase III. Between its two predecessor firms, CoMentis investors had already put almost $62 million into the company, giving it a substantial war chest.

According to company chief scientific officer Terence Kelly, PhD, the firm decided a year after announcing the BACE alliance with Astellas to drop the rest of its portfolio including Athenagen’s oral small-molecule selective α-7 nicotinic agonist and focus exclusively on BACE. However, in the second quarter of last year, Astellas and CoMentis quietly terminated the CTS21166 program. Kelly has been with the firm for just 16 months and says neither company will comment on the reasons behind halting the BACE candidate’s testing. “I will confirm,” he says, “that Astellas and CoMentis believe in the [BACE] target and that the amyloid hypothesis has not been adequately tested in the clinic. We continue to pursue research and backup compounds in the area.” For now, CoMentis acts primarily as a BACE R&D center for Astellas.

Although the BACE agonist’s clinical failure has wounded the biotech, CoMentis still has plenty of cash to explore its business options, including restarting the Athenagen α-7 program. The decision reflects recent positive mid-stage clinical findings with α-7 candidates at Targacept Inc. and EnVivo Pharmaceuticals (see below). Those competing compounds suggest the molecule may help boost AD patients’ neuronal firepower even as their disease progresses. Rather than pursuing a long and expensive AD-modifying trial, Kelly says, “You could look at cognitive enhancement as a short-term quality-of-life thesis.”

For now the company’s pipeline appears to be solely preclinical; Kelly would not comment on how close it is to re-entering clinical studies. “Three things got us through the last couple years,” he explains. “We have a good board of directors used to handicapping these types of problems, a good cash position, and a fantastic research relationship with Astellas. That partnership is very, very important to a small group like ours.”

With that base, Kelly sees exciting things on the horizon. The CoMentis board has given the company the green light to shop for new projects. “If we find the right investments to build a small-molecule CNS company, we have funds to invest.” But he feels no time constraints in searching out the right opportunity. “We’re not driven by deadlines or by external or self-imposed time pressure.”

Exhibit 2

CoMentis Inc.

	Then (2004 – formerly Zapaq Inc. and Athenagen Inc.)	Now (2011)
Management	James C. Jenson, PhD (CEO)	Carl F. Grove, PhD (CEO) Terence Kelly, PhD (CSO)
Total Money Raised	$6mm	$161.84mm
Investors	Sanderling Ventures; Yamanouchi Venture Capital; Institute for the Study of Aging (Estee Lauder Trust); Oklahoma Life Sciences Fund (managed by Chisholm Private Capital Partners)	Previous investors; Clarus Ventures; Charter Life Sciences; Index Ventures; Astellas Pharma Inc.; Astellas Venture Capital
Employees	15	12
Key Program(s) (Stage)	BACE inhibitor	BACE R&D; selective α-7 nicotinic agonist
Partners/Dealmaking	No partners	Athenagen and Zapaq merge to form CoMentis (2006); Astellas Pharma provides $100mm up front plus milestones and royalties for BACE rights (2008)

SOURCES: Elsevier’s Strategic Transactions; Company reports

EnVivo Pharmaceuticals Inc.

When START-UP profiled EnVivo Pharmaceuticals Inc. in 2004, the company expected to build a pipeline via a discovery platform that offered a semi-high-throughput way to screen for AD-modifying compounds and other neurodegenerative diseases. (See (Also see "EnVivo Pharmaceuticals Inc. " - Scrip, 1 Sep, 2004.).) The company’s original ambitions hinged on its ability to insert human genes such as app and tau that are believed to lead to AD-related plaque production in the fruit fly Drosophila. The platform involved digitized video review of the plaque-addled flies’ performance climbing up the side of a tube before and after receiving compounds, in an agnostic phenotypic screen for their effectiveness. However, the concept proved unwieldy and ultimately unsustainable.

“The flies have flown the coop,” says Kees Been, who became the company’s CEO and president in 2005. The platform helped the company to identify numerous plausible drug candidates, but every hit led to rich biological questions that proved virtually impossible to answer. A two-year-long attempt to spin out the fly platform as a fee-for-service CRO failed to take root, and early this year EnVivo finally abandoned it altogether.

EnVivo now utilizes more conventional cell-based target assays and animal models of disease. Those efforts led to identification of a Bayer HealthCare Pharmaceuticals AG molecule that is now its lead pipeline program, EVP-6124, targeting α-7 nicotinic acetylcholine receptors. (See Exhibit 3.) A Phase I/IIa study of EVP-6124 shows significant improvements in cognitive measures of brain function in Alzheimer’s patients with mild to moderate disease symptoms, and minimal safety concerns. Been describes EVP-6124, which potentially competes with molecules from both TargaCept and AstraZeneca, as a cognitive enhancer and not a disease modifier. As such, he says,“our drug makes the neurons fire a little harder.”

Been hoped positive Phase IIa data of EVP-6124 in combination with an AChE inhibitor would be sufficient to score a lucrative partnership. But potential acquirers wanted more definitive proof and EnVivo had little choice but to fund the Phase IIb trials itself. To do so, the biotech relied on the committed support of what has become its sole backer, Fidelity Biosciences. That venture fund, unlike many other investors, isn’t driven by a desire to see a return in three to five years. “We have a unique situation in that we are not driven by an exit strategy,” says Been. Still, he won’t disclose how much more Fidelity has invested since the fourth financing round was made public in 2008; at that point the VC had already put in a total of $126.7 million. [See Deal]

Been also expresses excitement about EnVivo’s gamma secretase modulator (GSM), EVP-0962. In the wake of the semagacestat disappointment, he emphasizes the importance of modulating rather than outright inhibiting gamma secretase to reduce abnormal Aβ production. There’s evidence that halting the brain’s normal metabolism of the amyloid precurser protein (APP) also decreases neuronal spine density, hypothetically leading to the cognitive decline seen in the Lilly trial. By contrast, according to Been, its modulator clips away the bad actor thought to be involved in plaque formation, but also increases APP metabolism, potentially boosting cognition – without the GI side effects associated with semagacestat. He says, “We disagree with the perspective [based on the Lilly experience] that a GSM won’t work.” The first clinical trial of EVP-0962 began earlier this year.

Still, it’s a risky bet. Thanks to Fidelity, however, EnVivo has the luxury of additional time before it has to show its hand regarding ’0962’s actual efficacy.

Exhibit 3

EnVivo Pharmaceuticals Inc.

	Then (2004)	Now (2011)
Management	David Lowe, PhD (CEO)	Kees Been (CEO)
Total Money Raised	$14.9mm	$126.7mm plus undisclosed additional financing
Investors	Fidelity Bioscience Group; BBBC Investor Group; CoGene Biotech Ventures	Fidelity Bioscience Group
Employees	32	48
Key Program(s)	AD fruit fly platform for neurodegenerative disorders	EVP-6124, targeting α-7 nicotinic acetylcholine receptors for cognitive enhancement, in Phase IIb; EVP-0962, gamma secretase modulator, in Phase I
Partners/Dealmaking	None	Bayer (2004) licensed what is now EVP-6124 to EnVivo; Mitsubishi Tanabe Pharma licensed Asian rights to EVP-6124 (2009) for undisclosed terms

SOURCES: Elsevier’s Strategic Transactions; Company reports

Avid Radiopharmaceuticals Inc.

A blood-borne biomarker for AD remains elusive yet one of the most important potential game-changers for the field. The existence of an accurate and highly predictive diagnostic test would allow two critical advancements. First, an Alzheimer’s biomarker could, in theory, identify patients earlier in the course of their disease when treatment is more likely to generate a positive response. Second, drug companies, meantime, might be able to run better defined, smaller clinical studies. Avid Radiopharmaceuticals hoped to be – and may still become – first to market with an approved positron emission tomography (PET) imaging agent capable of directly imaging amyloid plaque deposits in the brain as a diagnostic tool. However, the FDA is still deciding whether the agent works as claimed. (See (Also see "Alzheimer's Dx: An Essential Piece of the Puzzle" - Medtech Insight, 1 Feb, 2011.).)

Founded in 2004, Avid quickly advanced its lead imaging agent, Amyvid (florbetapir F 18 [18F-AV-45]), an iodinated ligand attached to a small, benign molecule that penetrates the brain and binds specifically to Aβ peptides. In PET or single photon emission computed tomography (SPECT) imaging, florbetapir lights up when its companion molecule binds to Aβ. Florbetapir might thus provide a surrogate marker for amyloid plaques and, consequently, a way to diagnose Alzheimer's and measure disease progression through plaque buildup over time.

When START-UP profiled Avid in 2006, the company had completed a pilot clinical program of its lead radiotracer. (See (Also see "Avid Radiopharmaceuticals Inc." - Scrip, 1 May, 2006.).) Soon after that, the company established its initial alliance with Bayer to develop its first PET molecular imaging agent. [See Deal] By 2008, Avid’s amyloid plaque radiotracer had become the first imaging compound to enter multi-center, IND-approved, clinical studies in the US. The company had two other clinical programs as well, looking at radiotracers in other neurodegenerative diseases. (See Exhibit 4.)

In the course of raising nearly $70 million, the company brought in several corporate venture investors, including Lilly Ventures. Seeing an opportunity to improve its internal Alzheimer’s pipeline, Lilly bought the company outright in November 2010 for $300 million in up-front cash plus up to $500 million more in milestones and royalty payments. The price tag stands out for a diagnostics firm, and in hindsight Lilly may have jumped a little too soon since that high valuation lay in the company’s FDA submission of florbetapir. [See Deal] [See Deal] [See Deal]

Two months after announcing the deal, an advisory committee for the FDA recommended against approval of Amyvid, in an unequivocal 13 to 3 vote. Importantly, the panel members did not question Amyvid's ability to directly identify and quantify amyloid plaque in the brain. The problems rested with the test's considerable variability in image interpretation among physician readers, they said. A separate non-binding vote indicating a possible pathway to approval went in Amyvid’s favor 16 to 0, but only if the company could step up education initiatives for imaging readers. At this point, the physician-training issue remains unresolved, but according to Lilly, the FDA panel conditioned its approval recommendation only on a demonstration of accuracy and consistency through a re-read of previously acquired scans. A Lilly spokesperson told Medtech Insight that the company is in discussions with the FDA and that Lilly and Avid are “actively pursuing the development of robust training modules.” The firm won't speculate on when final approval may come, but believes it could still happen this year.

Even if Amyvid does reach the market, Lilly and Avid will still have to tackle the question of amyloid plaque’s relation to AD. Avid has reportedly already made one concession by modifying the original Amyvid labeling to remove any reference to AD. The bland labeling now states that “a negative florbetapir PET scan is clinically useful in ruling out the presence of beta-amyloid.” And, the company insists that the imaging test is not intended as a screening tool or diagnostic test. Instead, a negative Amyvid test could help clinicians rule out AD in a patient, the firm says. Meanwhile, GE Healthcare (a division of General Electric Co.), Siemens AG, Bayer, and others are working in conjunction with various drug developers to come up with their own diagnostic imaging agents.

Exhibit 4

Avid Radiopharmaceuticals Inc.

	Then (2004)	Now (2011)
Management	Daniel Skovronsky, MD, PhD (CEO)	Daniel Skovronsky, MD, PhD (CEO)
Total Money Raised	$8.9mm	$69.4mm
Investors	Pfizer Strategic Investment Group; Lilly Ventures; RK Ventures; BioAdvance	Purchased by Eli Lilly in 2010 for $300 million up front, yielding a three- to five-fold step-up for investors
Key Programs	Amyvid (florbetapir F 18 [18F-AV-45]), amyloid plaque radiotracer	Amyvid (florbetapir F 18 [18F-AV-45])
Partners/Dealmaking	None	Bayer Schering Pharma licensed Alzheimer’s imaging agent 18F-AV1/ZK (2007)

SOURCES: Elsevier’s Strategic Transactions; Company reports

AC Immune SA

“We are a very Swiss company – in a good way,” says AC Immune’s CEO Andrea Pfeifer. By that she means the company, like its homeland, prides itself on remaining fiscally conservative and stable, rigorous in planning, and independent in its decision making. The company has the rare good fortune in the Alzheimer’s space to pursue its own Swiss-like course.

The biotech was founded in 2003 to exploit two separate and potentially complementary platforms – one biological, the other medicinal chemistry – to identify molecules that treat protein misfolding disorders, such as damaging alterations to the three-dimensional conformations of Aβ and tau proteins implicated in Alzheimer’s. The immunological SupraAntigen technology and the chemical Morphomer platform are designed to produce ligands that bind specifically – and with high-affinity – to proteins in “sick” conformations. Therapies emerging from the platform should “break” the pathological conformation of proteins by shifting the equilibrium via stabilization of the soluble form of the protein target, thereby rendering them harmless. The company also planned to develop diagnostics to accompany its products. (See (Also see "Molecular Origami: Start-Ups Tackle Protein Folding" - Scrip, 1 Dec, 2006.).)

By the time START-UP profiled AC Immune in 2005, the young company possessed only preclinical data and had no corporate partners to lend it scientific credibility. (See (Also see "AC Immune SA" - Scrip, 1 Jul, 2005.).) But in December 2006, Genentech licensed exclusive worldwide rights to the biotech’s specific Aβ antibodies emerging from the SupraAntigen platform, helping validate the biotech’s technology. (See Exhibit 5.)

The R&D collaboration and significant cash also helped power rapid progress for the company’s first Aβ antibody emerging from the program, RG7412 (MABT5102A). Granted fast track designation by the FDA for mild to moderate AD, RG7412 went into the clinic during the third quarter of 2008, and unlike other therapies in development, has a very favorable safety profile. “The Aβ field suffers from the fact that [experimental] treatments are too toxic,” says Pfeifer. In May 2011, the partners announced that Genentech, which has full responsibility for the antibody’s development, had begun a 370-patient Phase II study.

The cash from Genentech and a total of CHF 64 million in prior financing – the last round was in 2008 – have provided AC Immune with sufficient dry powder to advance a number of clinical programs including a second Aβ immunotherapy, the vaccine ACI-24, now in Phase I/IIa trials. In addition, the company is advancing its own companion diagnostics, which it expects to partner when they reach commercialization, possesses a small-molecule BACE modulator, ACI-91, currently in mid-stage clinical development, and is exploring a possible tau-targeting therapy. [See Deal] [See Deal]

For now, AC Immune is that rare bird of an early-stage AD start-up: sound financials mean it has the luxury of pushing ahead with multiple programs giving it options to pursue only therapies that are best-in-class or close to hitting that benchmark.

Exhibit 5

AC Immune SA

	Then (2005)	Now (2011)
Management	Andrea Pfeifer, PhD (CEO)	Andrea Pfeifer, PhD (CEO)
Total Money Raised	CHF 24mm	CHF 64mm
Investors	Undisclosed private investors	Undisclosed private investors
Employees	10	48
Key Program (Stage)	SupraAntigen and Morphomer technology platforms	RG7412, Aβ antibody (Phase II testing by Genentech); vaccine ACI-24 (Phase I/IIa study); BACE modulator, ACI-91 (Phase II)
Partners/Dealmaking	None	Genentech in 2006 for Aβ antibody from SupraAntigen platform

SOURCES: Elsevier’s Strategic Transactions; Company reports