Christmas has come early for the bank’s shareholders with the decision to slightly increase the 2024 dividend – despite a single-digit decline in the net profit and cash earnings.
Beating the market benchmark is never easy, with 72 per cent of Australian actively managed global equity general funds trailing the S&P World Index in the six months to June 30, 2024. Domestic equity funds performed slightly better, albeit against a significantly lower bar set by the S&P/ASX 200 Index.
Alzheimer’s treatments are inching closer to a break-through
Finding a cure or treatment to Alzheimer’s disease has been labelled “the last medical frontier” as it remains one of the most prevalent human diseases, and to this day there are no treatments or cures. In fact, the exact causes of Alzheimer’s disease aren’t even fully understood.
Alzheimer’s disease is an irreversible, progressive brain disorder that slowly destroys memory and thinking skills. It is the most common form of dementia, affecting up to 70 per cent of all people diagnosed with that condition. There are an estimated half a million Australians living with dementia and according to the federal government’s health information service Healthdirect, Alzheimer’s disease affects up to one in ten Australians over 65 years of age, and up to three in ten Australians over 85.
There has been no new drug to treat the disease for some 20 years. It’s been a hit and miss area for biotech companies for years. Back in March 2019, according to APNews, US biotech giant Biogen “halted two studies after disappointing results suggested aducanumab would not meet its goal of slowing mental and functional decline in Alzheimer’s patients.” Goldman Sachs had advised its clients that the company would generate US$12 billion a year in sales. Whoops.
This week however, the US Food and Drug Administration (FDA) has given conditional approval for the use of Aducanumab, also known as Aduhelm, Biogen’s drug. This is what has excited the biotech space.
The FDA said “Aduhelm represents a first-of-its-kind treatment approved for Alzheimer’s disease. It is the first new treatment approved for Alzheimer’s since 2003 and is the first therapy that targets the fundamental pathophysiology of the disease. …Under the accelerated approval provisions, which provide patients suffering from the disease earlier access to the treatment, the FDA is requiring the company, Biogen, to conduct a new randomized, controlled clinical trial to verify the drug’s clinical benefit. If the trial fails to verify clinical benefit, the FDA may initiate proceedings to withdraw approval of the drug.”
While the FDA’s approval has in the first instance positive implications for Biogen (NASDAQ: BIIB), it is also highly relevant to four ASX listed stocks: Actinogen Medical (ASX: ACW), PainChek (ASX: PCK), Neuroscientific Biopharmaceuticals (ASX: NSB) and Cogstate (ASX: CGS).
Biogen (NASDAQ: BIIB) – As mentioned above, the FDA granted approval of Biogen’s aducanumab despite the absence of clinical evidence that the drug actually works. The drug is priced at a whopping US$56,000 per year sold as Aduhelm. BIIB shares closed up 38.3%, to $395.85. Reuters says “Aducanumab works by removing sticky deposits of a protein called amyloid beta from the brains of patients in earlier stages of Alzheimer’s in order to stave off its ravages, which include memory loss and the inability to care for oneself.” This is not a cure, however; it simply slows down the effects of the disease.
Actinogen Medical (ASX: ACW) – The local biotech is on a similar path to Biogen, currently in Phase II trials with Xanamem, an investigational therapy for Alzheimer’s disease. Actinogen says it has ethics approval for its 100-healthy older volunteer, part-A Xanamia dosing study of Xanamem for cognition. Actinogen said the Bellberry Human Research Ethics Committee approved the enrolment of patients expected to begin next month.” (The Adelaide-based Bellberry is a national not-for-profit organisation that provides scientific and ethical review of human research projects across Australia.”
The XanaMIA study is planned to be conducted in two parts: XanaMIA Part A will be conducted in four Australian clinics on 100 volunteers, while XanaMIA Part B will assess the efficacy of Xanamem using the minimum effective dose conducted in a cohort of patients. A positive result from these trials should see the company share price rise significantly. Shares are up +171.93% this month and 638.10% year to date.
Cogstate (ASX: CGS) is the other main ASX-listed stock that operates in the Alzheimer’s space. CGS shares rose on the back of the FDA approval despite being only indirectly involved. The company is a neuroscience technology company optimizing brain health assessments to advance the development of new medicines and to enable earlier clinical insights in healthcare.
What does Cogstate have to do with this announcement?
The biotech is partnered indirectly with a Japanese pharmaceutical Eisai, whic in turn is Biogen’s partner. Cogstate said in an announcement that its “digital cognitive assessments will play an important role in supporting the types of large-scale cognitive assessment that will be necessary in the launch of disease modifying therapies such as Aduhelm.”
It also said that an Aduhelm approval would mean that Eisai would no longer have the right to accelerated termination after the fifth year of the deal, and it is now contractually obligated to make minimum royalty payments for five years thereafter. This equates to roughly US$20 million. Shares in Cogstate hit a high of $1.60, up 61 per cent, before closing at $1.40 (up 40 per cent.)
