Cowen & Co. Analyst Report........OUTPERFORM
Pretty much echoes the majority opinion that Elan's aab001 must have shown efficacy signs in the Phasell 'Interim PEEK' for them to get the FDA going with the Phaselll ahead of Unblinded Data Results. Validation for the Beta-Amyloid Oligomer Target is of course ............Efficacy.
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Cowen & Co.---TTHI---Outperform
ELND-005 PHASEl STUDIES ARE COMPLETE IN AUGUST 2007--
Transition Therapeutics announced the successful completion of multiple Phase I trials (110 patients total) of ELND-005, including single and multiple ascending dose studies. ELND-005 is administered orally and was dosed once-daily and twice daily in Phase I. The specific doses have not been disclosed. ELND-005 has been shown to be orally bioavailable and readily cross the blood-brain-barrier, presumably via the sodium myo-insositol transporter 1 (SMIT-1). ELND-005 was safe and well-tolerated. No dose limiting toxicities were seen. Our checks indicate Elan ran additional pharmacokinetic studies with ELND-005 and the results came back clean. Importantly, drug levels achieved in the CSF in Phase I were consistent with therapeutic levels achieved in preclinical models. The FDA has granted ELND-005 fast-track status.
ELND-005 (formerly AZD-103) is in Phase II trials for Alzheimer.s disease. Alzheimers disease afflicts approximately 4-5MM people in the U.S. and approximately 15MM people worldwide. Originally discovered at the University of Toronto, the full rights to ELND-005 were acquired by Transition Therapeutics in early 2006. In July 2006, very promising preclinical results for ELND-005 were
published in Nature Medicine. In preclinical models, ELND-005 has been shown to inhibit beta-amyloid aggregation, accelerate the disassembly of beta-amyloid aggregates, and protect neurons against beta-amyloid-induced toxicity.
ELND-005 has a number of characteristics that could potentially position the product as a best in class treatment for Alzheimer's disease, including:
(1) disease-modification potential via the targeting of beta-amyloid plaques.
(2) it is orally bioavailable.
(3) it readily crosses the blood-brain-barrier.
(4) it is derived from a naturally occurring compound and thus far appears to have a relatively benign safety profile.
Patient recruitment in a 340-patient Phase II trial for ELND-005 is underway. We target a F2013 (H2:2012) launch for ELND-005. Assuming ELND-005's profile bears out in clinical trials, we believe ELND-005 has peak annual world wide sales potential of $3B+.
ELAN IS A WORLD CLASS AD PARTNER
In September 2006, Transition Therapeutics entered into a co-development agreement with Elan for ELND-005. The initial terms of the agreement call for a 70/30 cost and profit split between Elan/Transition, however, post Phase II Transition Therapeutics
does have the option to increase its level of participation to
an undisclosed level. We estimate the future split between Elan/Transition at 55/45.
In our view, Elan's Alzheimer's disease drug development program is the best in the world and we view Elan as an ideal development partner for ELND-005.
BAPINEUZUMAB RESULTS EXPECTED TO PROVIDE FURTHER VALIDATION OF THE AMYLOID-BETA APPROACH
Whether or not targeting beta-amyloid will prove to be an effective treatment for AD remains an open question. Development efforts targeting beta and gamma secretase inhibition have been protracted. Disappointing Phase III results for Neurochem's Alzhemed (beta-amyloid aggregation inhibitor) were released earlier this year, but
mixed Phase II results and a less-than-optimal profile resulted in very low expectations for the product.
Initial Phase III results for Myriad Genetics' Flurizan
(gamma secretase modulator) are expected to be released in June 2008 and, similar to Alzhemed, expectations for success are very low. While there have been very promising results in preclinical models and in early human clinical studies, positive results from a well-controlled Phase II/III trial of a beta-amyloid targeted agent have
not been released to date.
We expect the first such results to arrive in mid-2008, when results from a 240-patient Phase II trial of Wyeth/Elan's anti-beta-amyloid antibody, Bapineuzumab, are anticipated to be released. In May 2007, following an interim (unpublished) look at the Phase II results, Wyeth/Elan decided to advance Bapineuzumab into Phase III
trials. Our consultants believe the final Bapineuzumab Phase II results will be positive both from a safety and efficacy perspective. We believe a derivative impact of positive Phase II results for Bapineuzumab will be an increase in the overall level
of enthusiasm for promising AD drugs targeting this general mechanism including ELND-005.
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