Biocurious: Neurizon gets its ducks in a row in quest for motor neurone disease

• Following this week’s capital raising and convertible note buyout, Neurizon is fully funded through crucial pivotal trial stage
• The company has the building blocks in place for success
• Investors can expect top line results in the March quarter next year

As recent events on the ASX drug development landscape starkly show, the sector is craving some better clinical news.

Having assembled the last building blocks, Neurizon Therapeutics (ASX:NUZ) could well be company to provide the joy with its pivotal ALS program.

ALS – amyotrophic lateral sclerosis – is the most common form of motor neurone disease (MND).

Rather than winging it or relying on the biotech gods, developers need to ensure that all the right elements are in place well before the last patient has been treated and the data ‘locked’ for final analysis.

One of them is money, not surprisingly.

On Monday Neurizon unveiled a $4.3 million placement in a difficult market, with a share purchase plan for a further $2m to follow.

Another is expertise: on October 1, experienced pharma hand and former Olympic swimmer Dr Chris Bremer clocked on.

Neurizon is carrying out its pivotal phase II/III trial via a US platform called Healey, under the auspices of the Sean M Healey Centre for ALS.

In other words: the company has access to the best ALS expertise in the world, as well as an extensive network for recruiting trial participants.

In the meantime, Neurizon has deepened its relationship with the drug’s global manufacturer, the vet giant Elanco.

Bremer said: “My immediate priority is disciplined execution as [the trial] progresses towards top-line results while ensuring Neurizon is ready for the regulatory, partnering, and commercial pathways that may follow.”

From science to revenue

Selected from 120 applicants, Bremer is a physician and a doctor of philosophy, who also holds an MBA.

Among his numerous biotech roles Bremer spent 21 years at Grunenthal Group, where he did everything but run the whole joint.

He’s also handy in the pool, having represented Germany in the 1996 and 2000 Olympics.

He also won 14 medals, which sure beats your columnist’s highest and only sporting accolade, a grade three wading race award (this statement is not an exaggeration).

Neurizon chairman (and, until a month ago, temporary CEO) Sergio Duchini cannot hide his awe: “Chris is an incredible individual.”

Bremer says his career has been oriented to translating the science into commercial results.

“A big part of that career was more on the commercial side, but they always wanted a leader who understands the science well,” he said.

“But ultimately, I was motivated by the prospect of helping ALS patients who currently have few options.”

Bremer says commerciality and science are not diametrical forces, in that commercial success should flow naturally from good clinical results.

“I come from precision medicine, where you look to understand the disease and then you can properly position your product in that space.

“That’s where I see a lot of potential here.”

Repurposing with purpose

Neurizon’s drug candidate NUZ-001 is a repurposed vet called monepantel, which was used as a sheep drench.

The substance then was found to be effective in dogs with lymphoma – and the human research followed.

In part, NUZ-001 looks to be an effective mechanism of action because of its ability to overcome the blood-brain barrier.

The pivotal trial is based on the work of a smaller phase 1 study, which found a 71% reduction in the risk of death.

As a rule of thumb, patients deteriorate at a rate of about one point a month on the ALS Functional Rating Scale.

The single-arm study also showed positive signs in slowing the disease and deterioration in other factors. These include the patient’s ability to breathe.

Duchini notes the two current standard-of-care drugs only offer a life extension of three to six months. Also, “their mode of administration is not simple”.

The company targets the US, where the Food and Drug Administration (FDA) has bestowed NUZ-001 with orphan drug designation.

Neurizon also aims for accelerated approval.

Healey fires up

The Sean M Healey & AMG Center for ALS is based at Mass General Brigham, Harvard’s biggest teaching hospital system.

An investment banker, Healey succumbed to ALS in 2020, aged only 59.

Duchini dubs Healey as the “world’s pre-eminent platform for ALS trials”.

Healey aims to ‘road test’ several ALS drug candidates at the same time, which creates efficiencies such as using common placebo groups. The process ensures a “modifiable but repeatable” trial protocol.

Neurizon was one of three studies that Healey selected, out of eight applicants.

Healey encompasses 78 sites with key neurologists who understand ALS.

“So, they already have a network of patients and understand the disease,” Duchini said.

“Normally the key issues with clinical trials are recruitment and getting your trial protocol approved by the FDA.”

Changing tack

But how many studies have panned out exactly as planned?

‘Zero’ sounds about right.

In Neurizon’s case, two other studies selected for Healey did not proceed. That meant Neurizon didn’t have access to a shared placebo group.

To maintain adequate trial ‘powering’, the company decided to increase the study participant numbers from 160 to 250.

This ensured the study had the same number of active participants, while maintaining the 3:1 active-to-placebo ratio.

Thanks to Healey’s 78-site network, the company fully recruited the trial in five months. This was the “fastest site activation and enrolment of any regimen in Healey history”.

Study participants are now progressing through the planned 36-week randomised controlled treatment phase.

Then follows a 36-week active treatment extension.

The study is measured on the primary endpoint of change in patient function. This is assessed by the commonly-used Revised Amyotrophic Lateral Sclerosis Functional Rating Scale.

The study also measures survival changes from baseline to week 36.

Talking finance

The capital raising consisted of a $4.3m placement, with a follow-on share purchase plan (SPP) to raise up to a further $2m.

Both legs are priced at 6.8 cents per share, a 21% discount to last Wednesday’s frozen price. The offer includes one-for-one options, exercisable at 12c a share within 18 months.

Notably, the raising is part of Neurizon’s broader capital management strategy that includes buying out remaining convertible notes on issue, for US$915,750 ($1.31m).

Specialist investor Obsidian Global holds this paper.

“Redeeming the remaining convertible notes is an important step in simplifying Neurizon’s capital structure,” Bremer said.

“With no convertible notes on issue and the potential drawdown replaced by the placement and SPP, our shareholders no longer face the potential dilution from note conversions.”

To preserve “funding optionality”, Neurizon retains the facility, but will not draw down on it until next April at the earliest.

As at September’s end, Neurizon had cash of $11.9m, with outflows of $7.9m for the quarter.

Neurizon is fully funded to the trial readout, “inclusive of one further drawdown” of the Obsidian facility.

But this may not be required, “depending on the outcome of the SPP and other funding opportunities”.

Given the need for additional study patients, the company negotiated with Healey to maintain the cost of the study at the original (undisclosed) level.

Right place, right time

Famously suffered by the late AFL player and coach Neale Daniher, ALS is a brutal fatal disease ill-served by drugs currently.

In the US, at least 70 MND trials are underway and there’s burgeoning commercial interest.

Earlier this year Shionogi completed its US$2.5 billion acquisition of the approved Radicava, from Tanabe Pharma.

Radicava turns over US$700m a year – but it only has a four-year patent life.

Duchini says participating in the Healey network was a big achievement for a small Australian biotech.

Also, Neurizon’s relationship with Elanco gives the company access to screeds of useful historic monepantel data.

“Leveraging that data efficiently was fundamental to us getting our initial IND approved by the FDA,” he said.

The US$12bn market cap Elanco is Neurizon’s second biggest shareholder, with a 2.4% stake.

“In many ways I feel that we really do punch above our weight”.

The proof, of course, lies in the clinical pudding – and investors shouldn’t have to wait too long to see what’s under the crust.

If successful, Neurizon could have a commercialised drug as early as 2028.

“We’re no longer an interesting scientific experiment,” Duchini says.

“We’re now a clinical development company and we’re moving towards clinical execution.”

At Stockhead we tell it as it is. While Neurizon is a Stockhead advertiser, the company did not sponsor this article.

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