Neurotrope (NASDAQ: NTRP) Offers Alzheimer’s Patients Hope for Restoring Cognitive Function

Neurotrope (NASDAQ: NTRP) Offers Alzheimer’s Patients Hope for Restoring Cognitive Function
Neurotrope (NASDAQ: NTRP) Offers Alzheimer’s Patients Hope for Restoring Cognitive Function

Miami, FL – December 26, 2018 (EmergingGrowth.com NewsWire) — EmergingGrowth.com, a leading independent small cap media portal with an extensive history of providing unparalleled content for the Emerging Growth markets and companies, reports on Neurotrope, Inc. (NASDAQ: NTRP).

  • PKC epsilon target reverses most pathological processes leading to Alzheimer’s
  • Paradigm changing clinical trial results show increasing cognitive function.
  • Bryostatin beats BAN 2401 (Biogen) in head to head comparison.
  • Recent deals and pipeline comparisons show undervalued nature of assets.

Neurotrope (NTRP) is having a serious case of Alzheimer’s as investors seem to have forgotten the vast potential of their lead candidate Bryostatin and what it has to offer.  NTRP is a pure play on Alzheimer’s and is the ONLY drug ever to show an increase in cognitive function and trades at a severe discount to it’s stage of development and likelihood of approval.  The last approval of an Alzheimer’s drug was in 2003 for memantine.  Alzheimer’s Disease (AD) is an insidious disease, thought to be caused by an aberrant gene that grips people later on in life. Regardless of the cause, AD is the 6th leading cause of death in the United States and drains productivity by an estimated 18.4 billion hours of estimated caregiver time to treat the disease.  The cost of caregivers to treat the 5.7 million Americans living with Alzheimer’s is $232 billion annually.  

No approved drugs from the big pharma players like Allergan (AGN), Pfizer (PFE), Johnson & Johnson (JNJ) and Novartis (NVS)  have demonstrated an increase in patients cognition and function.  The best pharma has come up with is slowing the rate of disease progression.  Early this year PFE threw in the towel laying off 300 positions from its neuroscience discovery group.  Axovant (AXON) also terminated development of Intepirdine in January as it couldn’t demonstrate improvement over placebo.  Mid-year AstraZeneca (AZN) and Eli Lilly (LLY) called off their trials.  A new approach is needed for late stage Alzheimer’s patients.

No approved drugs from the big pharma players like Allergan (AGN), Pfizer (PFE), Johnson & Johnson (JNJ) and Novartis (NVS)  have demonstrated an increase in patients cognition and function.  The best pharma has come up with is slowing the rate of disease progression.  Early this year PFE threw in the towel laying off 300 positions from its neuroscience discovery group.  Axovant (AXON) also terminated development of Intepirdine in January as it couldn’t demonstrate improvement over placebo.  Mid-year AstraZeneca (AZN) and Eli Lilly (LLY) called off their trials.  A new approach is needed for late stage Alzheimer’s patients.

New Thinking Yields Way to Promising Therapies

Big pharma built huge development pipelines targeting the buildup of proteins on the surface of the brain known as amyloid plaque.  The entire industry turned a blind eye to the fact that there were no tests that could conclusively show that the buildup of plaque would lead to impairment.  The target of the drugs in development was to reduce the levels of amyloid in the brain. When the drugs in development reduced amyloid levels but failed to produce and meaningful efficacy the industry turned to the tau protein.  The logic was that a single protein was responsible for the disease.  This flawed thinking eventually gave way to a rethinking of the disease.  The root cause of the disease is unknown but it’s likely a result of genetic and environmental factors.

1 Gene Therapy:  If there was a way to identify the genes then gene therapy could correct the cells and act as a functional cure.  The only issue is that there are not many genes associated with Alzheimer’s.  One study found 3 genes were responsible for the mutations. The point is that the prevalence of gene mutations doesn’t account for the majority of the disease that could lead to a mainstream therapy.2 Insulin Linkage:  Type 2 Diabetes (T2D) and AD are linked.  With a diagnosis of T2D there is approximately a two-fold increase in the risk of risk of AD.  The studies suggest that diabetes affects the ABeta accumulation in the brain which in turn disrupt the brain’s ability to clear the insulin degrading enzyme. So when the body is not able to regulate blood sugar levels the brain gets starved of the growth factors found in insulin that the neurons are dependent upon.  Without having the right balance of growth factors brain cells are very susceptible to death.  Prolonged exposure without insulin reduces the brain’s ability to repair the damage. 

Further evidence suggested that insulin lost its effectiveness as a growth factor as the disease progresses due to the increase in brain insulin resistance. Animal models show that insulin has a protective effect in the progression of AD.  This is why oral insulin being developed by EastGate Pharmaceuticals (ETBI) might be able to drastically reduce the onset of T2D and AD saving billions in healthcare costs.

Neurotrope 10-K Filing

3 PKC Epsilon Activation:  In the progression of AD neurotransmitters (brain cells) in the brain die mainly due to the lack of growth factors such as BDNF, NGF and IGF. The presence of these growth factors in the brain have anti-apoptotic, anti-amyloid, and anti-hyperphosphorylated tau effects.  Simply stated this means restores the brain to normal function.  The growth factors prevent the brain cells from dying, prevents amyloid plaque from forming, and prevents the removal of the tau protein that stabilizes the pathways of the neurons.  PKC epsilon activation could lead to growth and maturation of the synaptic network in the brain.  This in turn could translate into a long lasting increase in cognitive function.

Neurotrope Poster Presentation AAIC 2018

Clinical Trial Results

Preclinical studies showed that NTRP’s lead candidate Bryostatin encourages the growth and maturation of synapses in the brain and prevents cell death.  It works via the protein kinase C epsilon (PKC epsilon) pathway that signal growth factors that prevent the cells from dying, remove the amyloid proteins, and promote the stabilization of neuronal pathways. Bryostatin is fundamentally different than any other AD drug.  In the figure above the rat study showed the reduction of ABeta levels in the presence of Bryostatin.  The phase 2 double blind randomized clinical trial enrolled 147 patients randomized 1:1:1 with a placebo group, 20 ug, 40 ug of Bryostatin.  Patients received an intravenous dosage every 2 weeks for a total of 11 weeks.  The endpoint was severe impairment battery (SIB) score at baseline, 5,9,13, and 15 weeks.

The overall safety profile of the 20 ug and the the placebo group was similar.  The 40 ug treatment group had significantly higher treatment emergent adverse events (TEAE).   The number of TEAEs was 51% greater than the placebo group.  The reason for this is due to the lack of efficacy due to the prolonged down regulation of PKC for patients still taking memantine.The standard of care for moderate to severe Alzheimer’s is donepezil or memantine. The target of Bryostatin is PKC epsilon and it controls the function of NMDA.  Memantine blocks NMDA therefore nullifying the effect of the drug.  This study clearly proved that memantine interacted with the drug and interfered with its efficacy.  Anecdotally, the study shows that the control group did worse on memantine versus the placebo.  In the slide below 15 of 16 patients (94%) showed improvement in their SIB score.  This group was not taking memantine.  The study also gave insight into the persistence of the drug and its ability to continue to improve after dosing.  There appears to be a sustained cumulative benefit.  With a p value of .001 it was highly significant.  These results were the basis of a confirmatory trial of 100 severe Alzheimer patients not taking memantine that will measure the change in SIB.

Neurotrope Poster Presentation CTAD 2018

Top Contender Biogen vs Pilot Study Neurotrope Head to HeadAfter Biogen Inc (BIIB) report clinical trial results for their Alzheimer’s drug USA Today came out with the headline “Is this drug the most promising development on Alzheimer’s in recent history?”  This headline encapsulates over a decade of disappointment and almost a 99% failure rate with Alzheimer’s drugs.  As an investor, there has to be a compelling reason to step into a stock that has potentially a 99% chance of failure. After the announcement Mizuho Securities analyst Salim Syed told CNBC that investors are predicting the final drug has a 50% chance of approval. On a head to head comparison it’s very difficult to compare the two drugs because the endpoints are different.  BIIB developed its own measurement scale called Alzheimer’s Disease Composite Score (ADCOMS) while NTRP used a SIB score.  Trial results for BAN2401 showed a 30% reduction in the rate of decline of cognitive impairment over the placebo group.  In contrast Bryostatin showed a 600%+ improvement over baseline over 15 weeks or 1/5th the time frame.  The other issue, is that Bryostatin also had a harder to treat population of patients. In this ad-hoc comparison the clear winner is NTRP.

Pipeline

Neurotrope’s lead compound is Bryostatin and clinical development is focused around the AD indication.  The confirmatory trial started mid 2018 and is expected to read out by mid summer 2019. Should it essentially confirm the the existing 94% responders rate it would meet the requirements of a Breakthrough Therapy Designation (BTD) in the $232 billion Alzheimer disease market. The AD trial appears to be the quickest pathway to commercialization.  Fragile X Syndrome is next on their list of priorities.  Fragile X is an inherited intellectual disability stemming from an autism mutation.  The disease affects speech and cognitive function.  NTRP licensed the technology trough CRE.  With 135,000 Fragile X patients the company has been awarded orphan drug status.   The preclinical trial was sponsored by the University of Santiago in Chile.  On Sept 5th 2018 NTRP announced a collaboration with The Nemours/ Alfred I duPont Hospital for Children to conduct an open label pilot trial for Fragile X patients ages 8 – 18.  This clinical trial is expected to commence testing soon.

Discounted Valuation on Comparable Basis

The company has a market capitalization under $40 million down over 60% from $100 million just 6 months ago.  There are 7.9 million shares issued and outstanding and many long term stock holders which puts the effective float of the company at 1.0 million shares.  The company has a strong balance sheet with $11.0 million in cash and cash equivalents as of Sept 30, 2018.  Over the past 3 quarters their burn rate has been running around $2.5 million/ quarter and seemed to pick up steam in the 3rd quarter due to clinical trial expenses related to the confirmatory trial.  The company has enough cash in place to get through a readout on their confirmatory trial expected by mid summer 2019.  The last funding was done at a level of $6.40 with long term investors that are still holding the shares.  The current price represents over a 30% discount to what long term investors paid.

AC Immune

On December 12, 2018, Eli Lilly (LLY) announced a licensing deal worth $80 million in upfront payments for the worldwide rights to AC Immune’s (ACIU) tau aggregation inhibitors in AD.  The small molecule that was licensed was in preclinical trials. LLY sweetened the pot by providing $50 million in exchange for a note, and further agreed to milestone payments of $60 million and tiered royalty payments of up to $1.7 billion.  Royalty on the drug would be in the low double-digits. ACIU presently has a market cap of $775 million.

On a comparable basis, NTRP is trading at a 95% discount to ACIU, but adjustments should be made for three Phase 2 indications and one Phase 3 indication in AD. The cash component of the deal was $190 million, which potentially values a preclinical AD drug at $190 million. A comparably-priced deal for Neurotrope would be worth $23.75 per share in terms of cash.

Anavex Life Sciences CorpBoth Anavex Life Sciences Corp (AVXL) and NTRP are in essential the same state of development for the AD indication.  AVXL has roughly double the cash position but its technology is not the best in breed. AVXL’s latest trial results indicate that they are trying to get approval based on a slower rate of cognitive decline over placebo.  In NTRP’s trial it shows an increase in cognition which is a complete paradigm change in it’s own right.  This chart below shows how AVXL reduces the rate of cognitive decline over placebo but if Bryostatin was plotted on the same chart it would look very different. Notice the green line that simulates what Bryostatin would look like on a head to head comparison.

Investment Summary

NTRP represents a very unique investment opportunity because they are the ONLY company that is pursuing the PKC epsilon target.  There are over 27 drugs in phase 2 development or higher, which makes this company a top takeover candidate, should the confirmatory readout be positive.  The data subset of non-mementine patients that experienced increased cognitive function is paradigm changing.  Recent LLY dealmaking could sparks some M&A in the sector as big pharma positions.  Tax selling and low float exacerbated price move down.  The stock is trading close to a 3 year low of $3.65. The company is strong financially and should be able to reach its next milestone.  A repeat of the phase 2 data in the confirmatory trial could lead to a Breakthrough Therapy Designation.  The company and the technology is best in breed.  The low price and the exceptionally good trial data has de-risked the stock.  This stock should be a core holding in every Alzheimer Disease portfolio.

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