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#Thesis …?
Added 2 months ago

I’m still a holder but thinking my thesis is busted or at least a little bent out of shape.

@nerdag - you were an early and vocal naysayer. Do you have any updates to how things are shaping up?

thx

c

#Alzheimers Drugs
Added 4 months ago

Been pretty quiet for CGS. One bad surprise overnight though:

The share price of Eisai, a Japanese drugmaker, plummeted after a surprise decision by European regulators on Friday not to approve lecanemab, an Alzheimer’s treatment it developed with Biogen, an American counterpart. The European Medicines Agency cited the danger of serious side effects, including brain swelling. The drug has been approved in America and Japan. Eisai said the ema’s decision would disappoint Europe’s 6.9m Alzheimer’s sufferers. 

#meeting
stale
Added 9 months ago

Just watched the video from the recent meeting.

I felt reassured that the confidence implied by the continued share buy back was real. At least in the short-medium term. The likelihood of larger contracts from the 3 new big pharma companies to contract their services was clearly something that Brad thought (and the Board) would have a very high likelihood of bringing increased revenues in teh future.

The expansion of Cognigram into the yearly health check in the US is really interesting. Brad raised the point that there is a big gap between identifying a decline and there being any actionable steps. This may not matter. The old "show me the incentives...." quote comes to mind. If there is a positive financial impact for the primary healthcare provider, they will want to use the test. If there is also a perceived benefit from the patient, they will want the test. This might be all that matters. Be interesting to see how that evolves.

That got me thinking - they should have a free app you can download and test yourself at home. Turns out they do - it's called Lila - you can test yourself and track your results over time, I just downloaded and will give it a burn tomorrow. I'm surprised this has never come up before - presumably it hasn't got much traction as yet.

Overall, I felt considerably reassured about heir capital management, which was my main concern with how the business is tracking.

Held.

#Side effects
stale
Added 2 years ago

it seems the 2 deaths are likely attributable to drug interactions rather than a direct effect of lecanamab.


for me the major point about this study is that it opens the door a little for other trials. This is the first, robust phase 3 trial with positive results that confirms that the amyloid plaque theory is valid. As to whether the (admittedly modest) benefit is worth the risk or cost is not partly relevant to the thesis of Cogstate. It means that there will now be a concerted push by drug companies to improve on this initial success we are likely to see a significant expansion in new drugs in this space all requiring trials. This is the point

Heralded Alzheimer’s drug works — but safety concerns loom

Eisai and Biogen share clinical trial data confirming that lecanemab slows mental decline amid reports of potentially related deaths.

30 November 2022

People involved in a clinical trial of the experimental Alzheimer’s drug lecanemab had their brains scanned to see whether the treatment was clearing away toxic protein plaques.Credit: US Department of Energy/Science Photo Library

Researchers have got a first look at phase III clinical trial data for a much lauded experimental Alzheimer’s drug — and although the data support it having a moderate cognitive benefit for people, scientists worry about its safety.

The results, presented on 29 November at the Clinical Trials on Alzheimer’s Disease conference in San Francisco and simultaneously published in the New England Journal of Medicine1, confirmed that the treatment, a monoclonal antibody called lecanemab, slowed cognitive decline by 27% relative to placebo in an 18-month study of nearly 1,800 participants. The antibody’s developers — pharmaceutical firm Eisai, based in Tokyo, and biotechnology firm Biogen, based in Cambridge, Massachusetts — announced these topline findings in September in a press release.

Could drugs prevent Alzheimer’s? These trials aim to find out

But the disclosure comes amid media reports that lecanemab might have contributed to the deaths of two people who had participated in the trial — adding to an ongoing debate over whether the experimental drug’s modest benefit is worth its accompanying safety risks. Eisai has denied lecanemab played a part in one death, and has yet to determine if it had a role in the other.

“It’s quite a complicated balancing act for risks and benefits,” says Rob Howard, a psychiatrist at University College London who specializes in dementia. And he worries about how patients and families who are desperate for Alzheimer’s treatments will weigh the two sides, if lecanemab is approved by regulatory agencies.

“All the available safety information indicates that lecanemab therapy is not associated with an increased risk of death overall,” Eisai said in a 29 November statement.

If a connection between lecanemab and the deaths is found, it could pose “a real conundrum” for the US Food and Drug Administration (FDA) as it decides how to rule on lecanemab, says Caleb Alexander, an internal-medicine specialist and epidemiologist at the Johns Hopkins Bloomberg School of Public Health in Baltimore, Maryland, and an advisory committee member for the FDA. The FDA is slated to decide on whether to give the experimental drug special authorization in early January.

Benefits and risks

Researchers are glad to see the swift publication of the lecanemab trial data. Some have previously criticized the rollout of another monoclonal antibody treatment for Alzheimer’s: aducanumab. Like lecanemab, aducanumab was designed to sweep clumps of a protein called amyloid-β from the brain; many researchers think this protein is a root cause of Alzheimer’s. The FDA controversially approved aducanumab, which was also developed by Biogen, last year on the basis that it cleared amyloid from people’s brains, but without clear evidence of cognitive benefit.

Alzheimer’s drug slows mental decline in trial — but is it a breakthrough?

By contrast, lecanemab is the first of its kind to slow mental decline in a robust clinical trial. During the trial, called Clarity AD, clinicians administered the treatment to a cadre of people in more than a dozen countries with early-stage Alzheimer’s. Half received biweekly intravenous infusions of lecanemab, while the others received a placebo. Scientists assessed people’s cognition primarily with a metric called the Clinical Dementia Rating–Sum of Boxes (CDR-SB), which evaluates a person’s abilities in six areas, including memory and problem solving, using an 18-point scale.

After 18 months, participants receiving lecanemab scored, on average, 0.45 points better on the CDR-SB than those receiving placebo. Other cognition tests used in the study echoed these results, and the treatment group showed a reduction in amyloid and other disease biomarkers.

But some researchers have questioned whether this shift is big enough to be noticeable in a person. A one-point difference on the CDR-SB is the minimum to be clinically important, Howard says.

“It’s a modest benefit,” says Brent Forester, director of the Geriatric Psychiatry Research Program at McLean Hospital in Belmont, Massachusetts, who helped to run the clinical trial for lecanemab. His concerns lie with safety. About 20% of people receiving lecanemab had brain-scan abnormalities that indicated swelling or bleeding — although less than 3% of those who received the antibody experienced symptoms related to these abnormalities.

This is how an Alzheimer’s gene ravages the brain

This safety profile is better than that of aducanumab. Forty per cent of people receiving that antibody in phase III clinical trials showed brain swelling in scans. But Forester still worries, because if approved, lecanemab would be given to relatively high-functioning people who happen to be in the early stages of Alzheimer’s. Complications might therefore worsen their quality of life.

During Clarity AD, 13 people taking lecanemab developed symptomatic brain bleeds — or strokes — whereas only 2 people in the placebo group did, according to the conference presentation. This represents just 1.4% of the treatment group, Howard says, but “that’s not a trivial risk profile”.

Further exploration needed

Both deaths reported in the media occurred during Clarity AD’s ‘open-label extension’, a period during which a trial has formally ended, but participants who were receiving placebo can opt to receive the experimental treatment. Both involved stroke-related complications.

More Alzheimer’s drugs head for FDA review: what scientists are watching

In one case, reported by STAT News, a participant who used a prescribed anticoagulant, or ‘blood thinner’, for a heart condition, died after a heart attack and four mini-stroke-like events. The other individual, reported by Science, died from a brain bleed after she received an emergency stroke medicine. As reported by both outlets, scientists think it’s plausible that lecanemab could have weakened the brain’s blood vessels by sweeping away amyloid protein lining the vessels in these people’s brains. The medications could have then helped trigger bleeding.

Because of the tie with anticoagulants and other factors, it’s a bit difficult to detangle whether lecanemab played a role in the deaths, said Marwan Sabbagh, a neurologist at the Barrow Neurological Institute in Phoenix, Arizona, while presenting data at the conference. “These things are continuing to be explored," he said. Although the rate of brain hemorrhage is low with lecanemab, it does rise with anticoagulants, he added.

“I honestly would be in the camp of not prescribing monoclonal antibodies to people on anticoagulation [medicines],” says Liana Apostolova, a neurologist at the Indiana University School of Medicine in Indianapolis who has consulted for Eisai and Biogen.

Whether or not the deaths will affect the FDA’s decision on lecanemab, scheduled for 6 January, is “anybody’s guess”, Alexander says. The agency will consider whether it should grant the drug candidate ‘accelerated approval’ on the basis of phase II clinical trial data showing that lecanemab clears amyloid-β from the brain. The approval would be conditional on Eisai and Biogen conducting follow-up studies to confirm a clinical benefit, which Clarity AD should fulfill.

If lecanemab is approved, Forester says, “I would suspect that there will be recommendations for careful monitoring”.

#News
stale
Added 2 years ago

Roche late-stage Alzheimer’s trials end in failure

Two studies of antibody treatment gantenerumab fail to slow decline in people with early-stage disease


nowhere near as important as Eisai’s success, but would have been a good addition to the tailwinds for CGS

#News
stale
Added 3 years ago

The Economist have published a piece on the rise of dementia and its implications, which predominantly focuses on the diagnosis.

Irritatingly for the cognitive testing part they picked Cognetivity Neurosciences as their example of a program to be used remotely to diagnose cognitive impairment. This company seems not to have anywhere near the history, background of rigorous studies or indeed a cash flow, like CGS, so it was a lost opportunity. Still, I downloaded the app and ran the test which was cool. I don't have dementia, which was even cooler.

Link to article

I also listen to the Economist's science podcast: Babbage, where the topic was discussed in further depth. I came away far more confident of the massive tailwinds that will benefit CGS, and that their technology will remain relevant for the foreseeable future.

Podcast

#Financials
stale
Added 3 years ago

Cogstate (ASX.CGS) is pleased to announce that the net value of Clinical Trials sales contracts executed in 1Q22 to date (01 Jul 2021 - 23 Aug 2021) is $35.4 million. The gross total of new sales contracts executed was $38.4 million and includes several new sales contracts. The net total of $35.4 million includes the cancellation of one ongoing trial.

This is in the first few months of this FY. If the rest of the year does no better than last year it would translate to ~$50m for the full year. It seems likely that would be a conservative estimate, given the likelihood of multiple "me-too" drugs that are going to enter clinical trials in light of the FDAs recent approval of Aduhelm (no comment from me on the merits of that decision.....)

Importantly, with software firms, the EBIT and NPAT increase at a far greater percentage than Revenue. The additional cost of selling one or one hundred tests is tiny. 

So using an EV/Sales ratio as opposed to an EV/EBIT will tend to underestimate fair value today.

But, point accepted that it is no longer the compelling proposition it was a few months ago.

#Business Model/Strategy
stale
Added 3 years ago

@nerdag

Thanks for your post and for challenging what may be a great case of group think. Something we need to be mindful of when we hear a well constructed argument from a pursuasive speaker.

You contend that the other revenue stream is from spillover into clinical practice. There is another revenue stream: direct to consumer. The software has been licenced by Eisai and is going to be marketed to the worried well, and maybe not so well, to check their brain health. This may or may not be successful.

Secondly, could I ask was your valuation on a trailing multiple or a forward multiple? The forecasts for next TM are considerably higher than for last year.

Many thanks for your thoughtful post.

C

#Industry/competitors
stale
Added 3 years ago

@firedup. 
good find!

infuess there are a couple of further bits of information you would need to decide if this will upset the cog state theory. 
it sounds (with no research) that the tests mentioned are yes/no tests. Is Alzheimer's present or not. 
if that is the case then cog state is ok. CGS offers an assessment of function. 
as such it is a way or measuring an outcome or response to treatment in a way that would correlate with functional ability. (Can a person still drive, live on their own, is competent  to sign legal documents etc)

a test that measures an intermediate measure is fraught with issues. Let's say the blood tests Beta-amyloid levels (the plaques that build up in the brain are made of this stuff) . 
if the blood tests show a drop in this level after treatment then everything is great right? Sadly not . There are lots of treatments that can change a marker but make no difference to what really matters, in this case cognitive function. 
Bu measuring cognitive function directly, CGS should be fairly safe from these kinds of diagnostic developments  

hope that helps