Here's what business can do for brain disorders

The business of the brain

More than 50 million people worldwide have neurodegenerative diseases. Biotech companies are looking for ways to deliver new treatments for Alzheimer’s and other disorders sooner rather than later.

The full horror of neurodegenerative disease hits most of us when a person we love is afflicted. And it can take many forms.

Alzheimer’s affects many, but other diseases such as Parkinson’s and multiple sclerosis are also claiming numerous victims. The World Health Organization estimates that by 2030 the number of people living with dementia will be double the current figure, and more than triple by 2050. Alzheimer’s is already the third leading cause of death in Australia – and the second for women.

The developed world is still coming to grips with the medical implications of an ageing population whose bodies may outlive their brains’ ability to function normally. 

Neurodegenerative diseases take an appalling toll, both in human and economic terms. In the US, the government spent US$214 billion last year to care for patients with Alzheimer’s – the country’s most expensive disease. And the US Alzheimer’s Association predicts that figure will reach US$1.1 trillion by 2050. 

The need to beat neurodegenerative diseases is obvious. Bill Ketelbey, chief executive of Actinogen Medical, a Sydney-based biotech company, favours a multi-pronged approach where different companies tackle different aspects of the problem.

“The prize for successful biotech companies may literally be billions of dollars in royalties. But the risk of failure is equally huge.”

He says the nature and complexity of Alzheimer’s, for instance, mean that any treatment will need to act on multiple triggers. “You are going to need a broad range of start-ups, each attacking a different mechanism of action,” Ketelbey says. The more companies involved in the research, the better the chance of finding an effective treatment, he adds. 

Despite the staggering and growing number of people with neurodegenerative diseases, estimated at more than 50 million worldwide, we know little about why they occur. As the medical research is still at an early stage, there will be a high failure rate among potential treatments for these diseases, Ketelbey says. However as we find out more about the diseases and how to research them, success rates should improve.

The rise and rise of biotech 

Funding for research is a constant battle. It can be years before research efforts have a breakthrough, if at all. But when they do, the rewards can be huge. reports that the valuation of US start-up Biogen surged US$29 billion in March after research released in December 2014 proved its experimental drug could slow the onset of Alzheimer’s disease.

“The market is massive and substantially unsatisfied,” says Ketelbey. “There are four treatments on the market for Alzheimer’s. None of them work particularly well and there’s no plan B or second-line therapy available.”

Deborah Rathjen, chief executive of Bionomics, an Adelaide-based biotech company, says investor interest had previously focused on cancer drugs, but has now switched to neuroscience. While potential Alzheimer’s drugs are attracting most of the headlines, biotechs are working on treatments for a range of “brain conditions” such as anxiety, depression and central nervous system disorders. 

Bionomics – 15 years old and with 95 staff – is one of Australia’s biotech veterans. It has two alliances with global pharmaceutical company Merck. One of those tackles cognition and memory impairment, common symptoms of Alzheimer’s and Parkinson’s. The research could also help people with schizophrenia and attention deficit disorders.

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Bionomics, which last year made a A$3.2 million profit on A$27.5 million revenue, has received US$20 million from Merck and stands to make up to US$678 million in payments if the drugs are successful, says Rathjen.

At the other end of the scale are tiny research teams that coordinate contracted scientists to trial drugs licensed from pharmaceutical companies. 

Actinogen Medical acquired a compound called Xanamem from Edinburgh University and is testing it for use in treating Alzheimer’s. Xanamem inhibits the production of cortisol, a naturally occurring hormone linked to stress. Elevated amounts of cortisol appear in people who have developed signs or symptoms of Alzheimer’s. 

The eight-year-old, publicly listed Actinogen employs three staff to manage the project. All research, regulatory work and manufacturing are outsourced. The company has finished preliminary studies on animals and plans to test Xanamem on Alzheimer’s patients at the end of next year, with results coming through by the end of 2017. If successful, commercialisation would take several years more.

“As more and more is understood about the disease and how to research it, the success rate should improve.” Bill Ketelbey, Actinogen Medical

Antisense Therapeutics, a Melbourne-based pharmaceutical company, is more than 14 years old and has a staff of five full-time employees who operate as a “virtual company”. All clinical trials and R&D are outsourced. It licenses its drugs from US biotech company Isis Pharmaceuticals, removing the need for Antisense to operate its own drug discovery group in house.

Antisense is working on a drug to combat multiple sclerosis (MS) and is further down the path to commercialisation than Actinogen. It has completed studies on human patients (phase two of three, in industry speak) and shown its drug can reduce the brain lesions (areas of scar tissue) that occur in response to the nerve damage caused by MS.

But in the seesawing world of biotech, even good results aren’t enough to ensure a windfall. When the results were published in 2008 in the Journal of Neurology, Antisense’s share price spiked at nearly 50 cents. But its research partner, a pharmaceutical company called Teva, quit development three years later because it didn’t fit with Teva’s broader product line, and Antisense’s share price crashed to seven cents. (At the time of writing Antisense was trading at 11 cents after a 10 to one consolidation.) 

Antisense had to start again by raising more capital, retesting the drug on animals and building support for a second phase-two study with more human patients and longer treatments.

Commercialisation is at least three to five years away, says CEO Mark Diamond. However, the company could start collecting money next year through an early access program in Europe. “We anticipate we could have that program in place and drugs sold before the end of the year,” Diamond says.

Trimming testing costs

One company with ringside seats to the biotech boom is Cogstate. The software and consulting company sells online tests that measure how well people think. By asking a series of yes/no questions Cogstate can determine a person’s mental performance. 

Cogstate’s customers are eight of the world’s 10 largest pharmaceutical companies, which use the service to speed up their clinical trials.

Computerised assessments are much cheaper than the conventional psychiatric assessment, which is a time-consuming process that involves a neuropsychologist interviewing patients individually. Cogstate’s tests can be administered over the internet, providing instant data on each patient, and the tests are repeatable across trials and continents.

“Repeatability is important where you’re measuring people pre and post treatment, and when assessing different populations in different geographies,” says Brad O’Connor, its chief executive. 

The 90-person company is based in Melbourne and its largest office is in New Haven, Connecticut. It sells its services on a per-study basis, charging from US$100,000 for a phase-one trial to more than US$2 million for a phase-three. In May the publicly listed company announced a phase-three study worth US$5.3 million examining a major depressive disorder.

The role of not-for-profits

O’Connor says Australian biotech researchers, although vastly underfunded compared with those in the US, perform very highly. “We seem to undertake new research somewhat quicker than our international counterparts, particularly in neuroscience.” 

Bryce Vissel, head of the neurodegenerative disease research laboratory at the not-for-profit Garvan Institute medical research centre, agrees about the quality of Australian research – for now. 

“The question is whether it’s going to be sustainable. I get frustrated by this statement that we’re punching above our weight. Imagine if the federal government actually gave scientists the resources? We would be world leaders. There’s no question of our capacity.”

Not-for-profit organisations play a key role in developing pre-clinical treatments that can lead to commercial spin-offs, Vissel says, and he also warns that biotech start-ups need to resist the temptation to raise money too early.

“Imagine if the federal government actually gave scientists the resources? We would be world leaders. There’s no question of our capacity.” Bryce Vissel, THE Garvan Institute

“If they go to market too quickly it gets harder and harder to raise money,” Vissel says. Some Australian biotechs would have been better off staying as not-for-profits so they could spend longer in an exploratory phase, he explains. “A few problem cases pull down the reputation of the industry. This is unfortunate because there are also fantastic companies with enormous promise here. They need a more sophisticated investor who understands what they are investing in.”

The prize for successful biotech companies may be literally billions of dollars in royalties. But the risk of failure is equally huge. Is biotech too volatile for investors? 

“It’s certainly at the speculative end of the market, there’s no denying that,” says Antisense’s Diamond. “You have to be judicious, do your homework, and pick the right companies doing the right thing. Investing in early phase R&D can be a very successful investment strategy. You have investors who have made a lot of money – and you have the other side of it, too.”

The non-drug approach

Brain disease in all its forms – from mental health to neurological problems – carries a huge cost. “The size of the problem is humungous,” says Perry Bartlett, professor of molecular neuroscience at the Queensland Brain Institute. Between about 25 per cent and 40 per cent of the burden of disease in our community – defined as days lost to premature death or inability to work – is due to brain disease, Bartlett says. 

In Australia, one in three people over age 85 have dementia, and one in 11 over age 65. By 2050, it is estimated that one million people will suffer from the brain disease, the effects of which will consume 3 per cent of GDP. 

“We’re not going to sustain it unless we do something quickly,” he adds.

The Queensland Brain Institute includes the Clem Jones Centre for Ageing Dementia Research, which has 70 researchers looking at ways to prevent dementia.

The centre made global headlines earlier this year when its director, Jürgen Götz, announced they had used a non-drug treatment, combining injected microscopic bubbles with ultrasound, to stimulate cells to destroy amyloid plaques in Alzheimer’s mice. These brain plaque deposits are one of the causes of the memory loss and cognitive decline associated with Alzheimer’s. 

“It made a big stir,” Bartlett says. “Götz is using a biophysical, non-invasive way of clearing the brain of this material.” The finding was featured on the cover of science journal Science Translational Medicine.

A version to test on humans is several years away, but Bartlett believes the treatment might one day resemble kidney dialysis. “You could go in once a month and have ultrasound to clear the material out of the brain.” 

Another project led by Bartlett explores how to encourage the brain to grow new brain cells. Exercise was shown to restore this ability in laboratory rats and mice. “In these animals we can reverse their cognitive decline,” he says.

Up to 40% of days lost to premature death or inability to work are due to brain disease.

IDEAS, a US$100 million study in the US, will examine if PET brain scans such as these, used to detect amyloid plaque in Alzheimer’s patients, can guide better treatments.

This article is from the August issue of INTHEBLACK 

August 2015
August 2015

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