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Since the last time I wrote about SAVA, the stock is down 50% or thereabout. That is ok, the fundamental picture of the company has remained the same except perhaps a short delay in enrollment for a 100 patient open label study for its drug PTI-125.
In the last article, I said the probability of success of drug is <25%; however as I have studied more the process of clinical trials in general; it is perhaps fair to say that number is more like <10%. Other than that, the fundamental picture remains the same: Phase 2a was highly successful in improving the biomarkers (in cerebral spinal fluid and serum plasma) for neurodegeneration and neuroinflammation in a small sample (N=13) of patients in an open label study. Phase 2b which is a randomized placebo, double blinded study on a sample of 60 patients in on track to have the results out by mid-2020. Improvements in those biomarkers in CSF and serum plasma is not guaranteed to improve cognitive function in Alzheimer patients; but is likely based on the fact that the converse is true i.e. Alzheimer patients have higher levels of those biomarkers (like amyloid beta, tau, etc.). If Phase 2b is successful, then the drug trial will enter Phase 3 which will be longer study (around 2 years or more). This study will be an open label study on a much larger patient population across multiple centers and will study improvement in cognitive behavior on Alzheimer patients; besides improvements in biomarkers for neurodegeneration and neuroinflammation. Phase 3 trial will require substantial funding ($200M or more) and if the company raises money thru equity; it will result in significant equity dilution of existing shareholders. Just to reiterate mechanism of drug’s (PTI-125) action from the previous post: it works by correcting the misformation of a scaffolding protein (FILAMIN-A or FLNA) which has downstream effects of reducing the aforementioned biomarkers; which in turn is likely to improve cognitive function. Other companies so far have taken the approach of reducing synthesis of proteins like amyloid beta and tau directly; which hasn’t proved to be very successful in treatment of Alzheimer’s.
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Manish JThis page is to document my day to day thoughts on Investing in stocks. Archives
August 2022
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