Investors lost big as Alzheimer’s R&D went over the cliff in 2019. Will they ever come back?
Neurotrope this week joined the long line of biopharma companies that have been mauled by clinical failure for Alzheimer’s drugs. But their crushed shares ($NTRP down from more than $8 in June to penny stock range today) represented just a tiny drop in the bucket of red ink that has drained from players which have pursued the greatest of all Holy Grails in drug R&D. Decades of defeat, headlined by the likes of solanezumab at Eli Lilly stretching to the most recent snafu with Biogen’s aducanumab, have forced a slew of players to change course on their R&D strategy — or just leave it in limbo.
How bad is it?
Biogen’s shares tanked when aducanumab bombed, forcing an early halt to the late-stage effort. The market cap shriveled by billions, and it’s still down about 29% from pre-crisis levels. That plunge came after Roche’s crenezumab flopped, though Roche was much better positioned to handle the failure. But its partner, AC Immune $ACIU saw its share price halved in the fallout.
The field went over the cliff in 2019.
What makes this important for the long run?
Investors and analysts don’t generally care to enter a minefield where the chance of being blown sky-high has been running 100% — a message that has been heard loud and clear in recent months. Biogen — still allied to Eisai — has essentially been advised to write off Alzheimer’s altogether as a complete loss. The amyloid hypothesis lies in tatters, while a series of BACE failures also underscored some troubling safety issues that made it all the way into a series of late-stage studies.
No one here really knows what they’re doing. And any new rounds of mid-stage data claiming success against biomarkers are widely ignored. Because the biomarkers have never been proven to be indicative of success.
And without investor support, you can forget any major new forays in late-stage testing.
The focus now has shifted to tau and combo therapies, as new companies start to tout questionable evidence of “success” in order to try to lure investors back. But after you’ve been burned this many times, that argument will be hard to make.