The combined world market for an Alzheimer’s disease (“AD”) and Parkinson’s disease (“PD”) drug is estimated to be 21 billion by 2026 and has a compound annual growth rate of 10%. The fortune from investing early in a blockbuster AD and PD drug lures many wishful prospectors. However, trials for dementia treatments have a dismal record and many investors are reluctant to invest in this sector. To leverage the bet, I present strong evidence that A2-73 could improve or maintain cognitive ability in PD and AD patients, signaling that imminent trial results could be favorable.

Anavex Life Sciences Corp. (NASDAQ:AVXL) is running clinical trials to treat Rett’s syndrome (RTT), early AD, PD, and frontotemporal dementia (“FTD”). Results from the double-blind placebo controlled 14-week phase 2 trial treating PD patients with ANAVEX2-73 (A2-73) are imminent. A2-73 has been administered to AD patients for several years, so safety is unlikely to be an issue. Rather, the efficacy and future promise of A2-73 for treating dementia will be uncovered. Most drugs fail to pass through the blood brain barrier efficiently. However, A2-73 has a molecular weight of 317.9 g/m and forms only three hydrogen bonds with water (moderate lipid solubility). These properties, plus the ability of A2-73 to displace the sig1R radiotracer [18F]FTC-146 in mouse brain, as visualized by PET, indicate that A2-73 will pass through the blood brain barrier.

Anavex describes A2-73 as a moderate sigma-1 receptor (sig1R) and M1-muscarinic receptor agonist but ascribes most of the therapeutic value to sig1R activation. A2-73 was shown to have only moderate affinity for the sig1R receptor using the vas deferens bioassay. However, this assay was reported to be unreliable for sig1R affinity determination.

Sig1R is involved in a plethora of important cellular functions, including protection from stress, such as hypoxia, excitotoxicity, reactive oxygen species, as well as the regulation of oligodendrocyte differentiation, cholesterol transport, myelin generation, gene transcription, and tau phosphorylation resulting in axon extension and dendrite spine formation.

The diverse roles for sig1R are defined by its numerous protein interactions, which are modified by ligands, both synthetic and natural. Synthetic sig1R agonists bind different sites on sig1R with different affinities. Since A2-73’s binding site and affinity are unknown, extrapolating other synthetic sig1R agonists effects to A2-73 could be misleading. Thankfully, several researchers have tested A2-73 and found promising effects on neuroprotection and autophagy.

Lisak et. al. recently reported that A2-73 significantly inhibited oligodendrocyte (OL), oligodendrocyte precursor cell (OPC), and neuron cell death after exposure to cytotoxic agents (quinolinic acid, glutamate, H2O2, and staurosporine–for apoptosis induction). OPC are depleted in AD brain compared to healthy controls, and A2-73 treatment increased OPC proliferation by 3-fold. The authors did not address whether reduced OPC cell death is related to increased OPC proliferation (cell death reported as percent trypan blue). Lisak reported no increase in oligodendrocyte differentiation with A2-73 treatment. However, this is contrary to Hayashi’s work establishing that sig1R activation increases OL differentiation. OL generates axon-insulating myelin, and AD, but not PD, is associated with reduced myelin in the brain. Apparently, Dr. Lisak started receiving funding from Anavex shortly after submission (reported here, search for Anavex). Hold on, it gets better…

Christ et. al. reported that A2-73 stimulates autophagy in cultured human cells and C. elegans. Autophagy is the way cells remove garbage and recycle. AD and PD are both associated with impaired autophagy, so stimulating autophagy flux is desirable. A2-73 activates autophagy by somehow increasing phosphorylation of the protein ULK1 at a serine amino acid located at position 555 (pS555). This is exciting because S555 phosphorylation of ULK1 can block age-related enhanced mTORC1-mediated ULK1 phosphorylation at S757 and subsequent autophagy downregulation. (Remember AD and PD are age-related). However, autophagy impairment in both AD and PD appears to be downstream from ULK1, with increased accumulation of autophagosomes and defective lysosomal fusion and digestion. Interestingly, mTORC1 is hyperactive in AD an PD, and hyperactive mTORC1 decreases transcription factor TEFB activity to downregulate autophagy and lysosomal gene expression. And here is the clincher… Cocaine, a sig1R agonist, decreases mTORC1 activity and increases autophagy.

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I think it is safe to extrapolate that A2-73 will have the same effect as cocaine since it explains how ULK1 was phosphorylated by A2-73 treatment. In absence of sig1R, autophagosome clearance is impaired, which is exactly what happens in AD and PD. Thus, A2-73 should increase autophagy in AD and PD and this is huge! I am not too worried about the sig1R-agonist inducing cell death for two reasons. First, cocaine certainly has a much higher affinity for sig1R than A2-73. Second, cell death was mediated by continuous incubation in 1 mM cocaine in cells that did not have hyper-mTORC1 activation.

Hypoxia may contribute to AD and PD neurodegeneration. Hypoxia is caused by constricted and degenerating capillaries, and sleep apnea. Treatment of stroke patients with the sig1R agonist cutamesine in a phase 2 trial improved motor scores. In AD, amyloid-β in blood vessels (cerebral amyloid angiopathy) activates the enzyme NOX2 to release reactive oxygen species (“ROS”), which damage cells. ROS induces capillary constriction (via pericytes), reducing blood flow. Increased hypoxia further increases amyloid-β disposition to occlude blood flow; thus, creating a vicious cycle ending in capillary collapse. Unfortunately, sigR1 agonists are known to increase reactive oxidative species. However, Goguadze et. al. 2019 reported that A2-73, and other sig1R agonists, reduced amyloid-β induced increase in ROS. A2-73 also increased mitochondrial complex I activity, which is dysfunctional in PD neurons.

Anavex reports that A2-73 treatment normalizes brain derived neurotrophic factor (BDNF) protein expression in the hippocampus of the Fmr1 knock-out mouse (fragile-X mouse model). However, Louhivuori and colleagues report that BDNF protein expression in the Fmr1 knock-out mouse is increased in the hippocampus but decreased in the cortex compared to wild-type. Thus, it is not clear whether A2-73 really increases BDNF in the mouse Fmr1 knock-out hippocampus. Anavex contracted with PsychoGenics to test A2-73 on Rett mouse models.

A2-73 CHOLINE

What can be inferred if we assume that A2-73 has similar effects as other sig1R agonists?

Choline is Sig1R’s natural ligand. Treating AD and PD patients with choline improves cognitive and motor performance, respectively. Choline is deficient in AD brains and PD brains (male), and supplementation could translate into increased acetylcholine and phosphatidylcholine production, lipid transport, methyl donation, and sig1R activation. A2-73 treatment will mitigate one aspect of choline deficiency by activating sig1R.

Activation of sig1R upregulates IL-10 cytokine expression. Increased IL-10 blocks innate immunity, increases amyloid-B accumulation, and reduces synaptic integrity. However, IL-10 levels and signaling are already significantly upregulated in AD and PD. It is unknown whether further IL-10 upregulation will increase AD-like pathology.

A2-73 could improve cognition by acting as a muscarinic agonist. Early trials of the M1/M4-selective muscarinic agonist (xanomeline) produced a modest effect in AD patients, but intolerable gastrointestinal side effects. Xanomeline efficacy could have failed because it actually reduced acetylcholine release by activating presynaptic muscarinic receptors to enhance feedback inhibition. A more recent trial of the selective M1 muscarinic allosteric agonist (MK-7622) failed to improve cognitive function in AD patients.

Unfortunately, muscarinic receptor G-protein signal transduction (coupling) is defective in AD (I’m first author). However, PD patients have normal M1 to G-protein coupling. Interestingly, muscarinic G-protein coupling is sensitive to magnesium deficiency in the aged rat hippocampus tissue (I’m second author); and serum magnesium levels are lower in AD patients. However, allosteric sig1R agonists increase acetylcholine release in rat frontal cortex and thus, A2-73 may increase acetylcholine release independently of muscarinic receptors.

Regardless of the mechanism, A2-73-mediated muscarinic receptor activation may not benefit PD patients. Agonists of the central muscarinic receptors activate acetylcholine release from the vagal nerve innervating the mucosal wall of the intestines. Acetylcholine binds and downregulates immune cells, in what is called the cholinergic anti-inflammatory pathway (CAP). Patients with vagal nerve transections have significantly reduced PD risk.

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PD is characterized by abnormal dopamine signaling due to the loss of dopamine producing neurons. Dopamine receptors 1 and 2 (D1R and D2R) form a heteroreceptor complex with Sig1R. When cocaine, a Sig1R agonist, binds Sig1R it reduces D2R internalization, increasing dopamine binding capacity (Bmax) and signaling. Similarly, cocaine and another Sig1R agonist PRE084, altered the configuration of the Sig1R-D1R-D1R heteroreceptor complex resulting in enhanced D1R signal transduction. This enhancement could result from cocaine acting on Sig1R to bias D2R signaling to G-protein (Gαi/o) signaling rather than the arrestin pathway with subsequent receptor internalization and D2R desensitization. Thus, cocaine, and perhaps A2-73 too, enhance D1R and D2R signaling.

Cocaine can also increase dopamine in the extracellular space by binding and blocking the dopamine transporter (DAT) in the outward conformation. PD patients have sworn that cocaine relieves their dyskinesia during “off” episodes. Too much dopamine can be harmful though; toxic dopamine levels increase α-synuclein expression in chronic cocaine users and this increases PD risk.

Sig1R agonists increase Sig1R monomer binding to DAT, stabilizing DAT, and increasing extracellular dopamine. In several different mouse models of PD, treatment with the SigR1 agonist PRE084 significantly attenuated motor impairment. Increased dopamine signaling relieves PD motor symptoms, but there is also evidence that patients with higher Levodopa dosages (dopamine) maintain their cognitive ability.

Interestingly, a sig1R sequence polymorphism (G241T/-C240T) is associated with AD risk in Japanese and Hungarian cohorts. However, the protective allele reduced Sig1R expression in a gene reporter assay. This result however, could be cell-type specific, since sig1R expression is significantly decreased in only some brain regions with age and in AD.

Anavex is currently running three phase 2 trials for treating RTT; two are treating adult RTT (NCT03758924 and NCT03941444), and one trial is treating pediatric patients (NCT04304482). RTT is a rare X-linked neurodevelopmental disordered characterized by abnormal cognitive and motor development. Most RTT patients carry a mutation in the gene MECP2. MECP2 is involved in regulating gene expression in the brain. There is currently no treatment beyond managing symptoms for Rett syndrome. In a preliminary open-label pharmacokinetics study, treating 6 RTT patients for 7 weeks with A2-73, all measured endpoints significantly improved. For instance, treatment significantly reduced glutamate, which is increased in the cerebrospinal fluid of RTT patients. Interestingly, a sigR1 agonist can also reduce glutamate release in rat cerebral nerve endings. After reviewing the promising preliminary data, the FDA granted Anavex fast track designation to facilitate A2-73 development and review. On June 16, 2020, Anavex reported that enrollment in the US trail exceeded the target by 50%.

Rett syndrome shares some biochemical and pathological features with AD and PD disease. For instance, common clinical features include autonomic dysfunction, immune dysfunction, chronic hypoxia, oxidative stress, mitochondrial abnormality, synapse pathology, abnormal excitability, and white matter damage, disturbed sleep, and adult parkinsonian movement disorder. However, Rett is a developmental disease driven by faulty cell differentiation, while AD and PD are complex diseases involving genetic susceptibility, multiple environmental risk factors, and unknown drivers.

Reports of AD patient’s effects in the A2-73 trial are encouraging. The high dose cohort had a significantly lower MMSE decline (-1.1) compared to a matched control cohort (-4.4) at week 104 (p < 0.01).

Of course, positive results in a few people is not conclusive. In summary, I have found evidence that A2-73 is likely to reduce cognitive decline by stimulating autophagy, and increasing complex 1 activity, oligodendrocyte proliferation, and neuroprotection. The added bonus of increased dopamine and acetylcholine release is also likely.

Background, IP Diligence, and Financials

Anavex began as a reverse merger from “Thrifty Printing Inc.”. Wu Yang and Wu Pei Ru filed for Thrifty Printing’s IPO in 2005. In Thrifty’s SEC filing the company describes itself as an “online photofinishing company”. Wu Yang is listed as president and director in the SEC filing but Athanasios Skarpelos, appearing for the first time in a beneficial ownership of securities filing, got the lion shares, with 1.5 million. Next, Yu and Ru resign from Thrifty Printing, which then merged with Anavex Life Sciences in 2007. Anavex business license dates from 1/23/2004, which is the exact date that Thrifty Printing declares it was incorporated in their SEC filing. It is apparent from their 2007 merger filing that the same person is president of both companies. Anavex reverse merger origin could have been planned to avoid scrutiny in the IPO filing. Although, Thrifty Printing’s compliance review raised 69 points for clarification or revision by the office of emerging growth companies. Athanasios Skarpelos is still an Anavex Director. This unusual start to a developing drug company has no doubt raised many eyebrows, but perhaps Skarpelos is just an opportunistic business man.

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Anavex has strong IP diligence with 7 direct assignee patents and 11 applications in prosecution. Five patents are related to A2-73, one patent is for melanoma treatment, and one patent is for neuropathic pain treatment. Anavex®3-71 is licensed from the Israel Institute for Biological Research. Two A2-73 patents were purchased from Dr. Alexandre Vamvakides on January 31, 2007. The earliest filing date of Vamvakides patent is from 1996 and discloses A2-73 (tetrahydro-N,N-dimethyl-2,2-diphenyl-3-furanomethanamine) and its use as a nootropic. Claims:

Yet, Anavex recently obtained two patents for A2-73, but with a twist. In one, A2-73 is in a crystalline form (10,413,519), and the other is for treating AD with the crystalline form (10,426,754). Both patents extend A2-73 exclusivity until 2035. Claim 1 describes the same composition but in a crystalline form with variable x-ray powder diffraction. This composition claim should have failed the inventive step (see case law Inherent Anticipation in the Pharmaceutical and Biotechnology Industries) since the same composition hydrochloride salt is disclosed in GR1004208B1, which applicant (Anavex) did not disclose, nor argue that the crystalline form improves on prior art. It appears as if Anavex contracted with CrystecPharma, an enterprise that reformulates drugs to crystalline form, to produce a A2-73 as a crystalline hydrochloride salt and applied for a patent to extend exclusivity.

In my professional opinion the new A2-73 patents would lose a validity challenge because of their prior art. However, challenging a patent is costly. Companies would rather infringe knowing full well that Anavex could not win an infringement case. This may not matter though, since Anavex has a few more tricks. For instance, one pending application is for the more active isolated (-) enantiomer of the same compound. Although, the current status is a non-final rejection based on claims obvious over Anavex’s prior patents, WO 97/30983 and WO 2013008044.

There are five drugs in the Anavex pipeline (2-73, 3-71, 1-41, 1066 and 1037). Anavex®3-71 is being tested in a phase 1 trial for frontotemporal dementia patients. The other three have been in preclinical research for over seven years. Anavex®3-71 functions as a M1-muscarinic agonist and a weak Sig1R agonist.

Anavex has cash reserves of $26.6 million and a monthly burn rate of ~1.8 million. At this rate, Anavex has 14.5 months of runway. If the forthcoming PD trial results are positive, it could attract more grants and investors required to fund phase 3 trials. One last promising tidbit- historically, Anavex insiders do not sell their shares.

ANAVEX

Cost per Share, 4.65 on 7/6/2020

Disclosure: I am/we are long AVXL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.



Via SeekingAlpha.com