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I covered AC Immune (NASDAQ:ACIU) nearly two years ago, and the stock is down 70% from that time. AC Immune is a developer of medicines for Alzheimer’s disease, and it used to focus on the old abeta/tau hypothesis. In my previous article, I discussed its then recently failed trial for semorinemab in AD, and I noted that they had no trials running at that time. I also discussed their diagnostic pipeline and said that this could be a solid revenue generator outside of their drug pipeline.
ACIU is a dementia-focused program and almost every one of its molecules target some form or other of dementia. There are 3 programs targeting tau, and one more tau program that is for diagnosis. Two more programs target abeta, and a number of others have other novel targets. Of these dozen or more programs, four are in phase 2 or above.
So why is such a company down 70% in two years?
The first reason is, of course, the trial failure, however this occurred 3-4 months before I wrote that article, and the stock had dropped 50%. By the time I covered the stock, though, it was already back up, having recovered almost that entire 50%. Thus it has fallen again substantially from that point.
If you look at ACIU’s two year price chart, there is a steady decline in the stock. There are no sudden declines as such, except maybe one or two such spots, especially around June last year when crenezumab failed.
Crenezumab’s failure was a big setback for the entire Alzheimer’s disease space. The molecule was developed at ACIU, then partnered with Genentech. It is an abeta targeting molecule, and has gone through rigorous trials under Roche. In June last year, the two companies announced that Crenezumab failed to slow or prevent cognitive decline in Colombian patients with the Presenilin 1 E280A genetic mutation which causes early-onset Alzheimer’s disease. There were two primary endpoints in the study – the rate of change in cognitive abilities and episodic memory function – and Crenezumab failed to meet either of them.
Crenezumab has been a constant disappointment for AC Immune. In 2019, partner Roche decided to discontinue crenezumab’s two pivotal trials, Cread 1 and 2, when an interim analysis showed that the trials are unlikely to meet their primary endpoint, change in CDR-SB score. In the latest failure, as well, the data was resoundingly against crenezumab, however, as usual, the companies, especially AC Immune, tried its best to spin it positively. One comment that actually made me smile was this from AC Immune CEO Andrea Pfeifer:
I think the picture we are giving is clearly showing that the molecule seems to do something.
The molecule actually failed to reduce abeta plaques in this population so companies with rival drugs working in the same space took that as a positive sign for their assets. This is probably the best thing that can be said about the trial – that it still failed to disprove the amyloid hypothesis.
The source cited above discusses a number of probable positives from the trial, but until we know Roche’s plans for the molecule, let’s not go into that. What is important for the current coverage is that we seem to have identified the cause of ACIU’s constant decline – two of its lead AD molecules have now ended in failures.
AC Immune has moved towards the tau tangle hypothesis, as well as towards AD vaccines, now. Recently, ACI-24.060 saw an anti-Abeta antibody response as early as week 6 in a small trial, setting the field for further research. These were interim results from the ABATE trial, which saw this drug activity as well as a safe and generally well-tolerated drug. However, as has often been the case with AC Immune data release, it ” …was thin on details, beyond the headline that the shot elicited a response.” PET imaging data from this trial to see if the molecule actually reduces abeta plaques will be available only in 2024.
A second AC Immune vaccine called ACI-35.030 is partnered with Johnson & Johnson, and has produced “positive” interim phase 1b/2a data. This molecule is also in further development. This is a tau-targeted vaccine whose “interim data showed that the high-dose of ACI-35.030 led to a strong induction of antibodies selective for pTau and its aggregated form, enriched paired helical filaments (ePHF).”
Financials
Swiss company ACIU has a market cap of $177mn in the US and a cash reserve of CHF 122.6 million (1 CHF = $1.08). R&D expenses were CHF 60.3 million while G&A expenses were CHF 15.8 million for the entire year in 2022. At that rate, the company has a cash runway of nearly two years. They expect milestone payments this year after starting trials for the JNJ partnered candidate.
Bottomline
Alzheimer’s is a tough field and unfortunately for ACIU, it has proven that time and again. The company is admittedly a leading researcher in the field, as shown by its deals with big pharma including Roche, Lilly and JNJ. However, none of its assets have so far turned out well. Everything may change if they show just one positive trial data. However, the stock is very risky right now, and I wouldn’t like to invest in ACIU given my risk appetite is pretty low.
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