PharmAust’s ALS treatment monepantel is drawing interest from biotech analysts. Pic: Getty Images
Health & Biotech
Special Report: PharmAust’s breakthrough drug monepantel is generating buzz with its promising results in treating MND/ALS, potentially transforming the future for patients and offering investors a lucrative opportunity.
Research firm Morgans has slapped a Speculative Buy on PharmAust (ASX:PAA), with a 12 month price target of 42c (versus current price of 18c).
Morgans believes that if the company’s drug succeeds, the stock could jump to as high as $3.21 per share, boosting its market value to $1.5 billion.
PharmAust is an Australian biotech with a primary focus on developing novel treatments for neurodegenerative diseases, particularly Amyotrophic Lateral Sclerosis (ALS), also known as motor neurone disease (MND).
The company is advancing its lead asset, monepantel, a repurposed drug originally developed as a veterinary de-wormer, towards human clinical applications.
This drug is currently in a clinical development phase, and PharmAust is preparing to enter an adaptive Phase 2/3 clinical trial in the United States which is expected to commence in late 2024.
This trial will be carried out as part of the HEALEY ALS Platform, a prestigious US program aimed at speeding up the assessment of new ALS treatments by evaluating several experimental drugs at once.
The HEALEY ALS Platform trial is a critical component of PharmAust’s strategy.
This platform is known for its effectiveness in accelerating drug development timelines, potentially reducing both the duration and costs associated with bringing new therapies to market.
By participating in this platform, PharmAust believes it will benefit from a streamlined process that could enhance the likelihood of monepantel reaching market approval.
Morgans says the market potential for MND/ALS treatments is substantial, given the limited options currently available.
With a market size exceeding US$2 billion annually and high pricing for new therapies, there is a significant opportunity for monepantel if it proves effective.
MND/ALS is the most prevalent type among a group of rare neurodegenerative diseases.
Despite its rarity it progresses quickly, leading to severe disability and a high likelihood of death. There is currently no cure.
The condition affects the cells and nerves in the brain and spinal cord which control the muscles.
This results in rapid weakness and wasting of the muscles, often progressing to paralysis in swallowing and breathing resulting in respiratory failure.
The exact cause of MND/ALS is currently not fully understood, with only 10% of cases being inherited (familial), while the remaining 90% have no clear genetic or environmental cause (idiopathic).
In the US, the ALS patient population includes over 20,000 individuals, with around 5,000 new diagnoses each year.
Current treatments offer modest benefits, meaning that there’s a clear, critical need for more effective options.
To give an idea of the market potential, Morgans says we can compare it to Amylyx’s Relyvrio, a competitor drug for MND/ALS.
Relyvrio was priced at $158,000 in the US, and with around 38,000 MND patients, this suggests a market value of about $6 billion.
Relyvrio was expected to reach peak sales of US$2.6 billion with 50% market penetration before it was withdrawn. In its first year after being conditionally approved, Amylyx’s drug earned $381 million.
PharmAust’s monepantel, meanwhile, works by inhibiting a key cellular pathway known as mTOR.
This pathway is crucial for regulating cell growth, proliferation, and a process called autophagy, which is how cells recycle and dispose of damaged or abnormal components.
In MND/ALS, misfolded proteins — abnormal proteins that accumulate due to mutant genes — build up in motor neurons. These misfolded proteins disrupt normal cell function and contribute to the progressive degeneration of nerve cells.
Monepantel tackles this issue by targeting the mTOR pathway, which is thought to help clear these misfolded proteins from the neurons. This mechanism could potentially slow or halt the disease progression.
Recent research into monepantel has shown promising results.
A Phase 1 study, known as the MEND study, tested monepantel in 12 ALS patients. The study involved a 24-hour single-dose pharmacokinetic analysis, followed by a 4-week study with escalating doses.
The results indicated that monepantel was safe and well-tolerated.
Moreover, it showed a 39% reduction in the rate of decline in ALS symptoms, compared to historical data from the PRO-ACT database, with no severe side effects noted.
Following this, an additional open-label extension (OLE) study was initiated for patients who had completed the Phase 1 MEND study. Of the 12 patients from the Phase 1 MEND study, 10 rollover onto the OLE study, and 9 remain on treatment.
PharmAust has just released promising interim results from the OLE study, showing that monepantel slows disease progression, improves survival, and is well-tolerated at a daily dose of 10mg/kg.
Compared to untreated ALS patients, those on monepantel lived significantly longer, with an 80.3% lower risk of death and a 43.2% slower decline in function. Notably, 56% of patients on monepantel showed no decline in function.
Read more about that here: PharmAust reports positive interim results of OLE study on monepantel to treat ALS
Several key milestones are expected to shape PharmAust’s near-term future.
The Phase 2/3 trial is scheduled to begin in late 2024. The results from this trial, along with the interim data from the ongoing OLE study, and potential funding from organisations such as FightMND, will be crucial.
FightMND, an Australian charity dedicated to MND research, has previously supported PharmAust and is expected to decide on further grant funding by the end of calendar year 2024.
PharmAust has also secured manufacturing agreements with global leaders Syngene International and Catalent Pharma Solutions.
This will ensure that monepantel can be produced to Good Manufacturing Practice (GMP) standards and scaled up for commercial use if the trials are successful.
Intellectual property is another strength for PharmAust, says Morgans.
The company holds key patents in the US, covering the use of monepantel for diseases related to the mTOR pathway, including neurodegenerative conditions.
“We view PAA as a significant opportunity in the rare disease space,” said Morgans.
“And unlike many in the drug development space, PAA offers a highly condensed clinical program which if successful may warrant an accelerated pathway to approval within the next 12 to 24 months.”
Morgans says that should monepantel succeed, the company’s potential value could rise significantly, with a projected price of $3.21 per share, translating to a market capitalisation of $1.5 billion.
“Compared to other rare disease players in the space with on-market assets, we view this as fair,” concluded Morgans.
Like any investment, however, risks in investing in the stock obviously exist.
Clinical trials are inherently uncertain, and there are potential challenges related to regulatory approvals, funding, and competition from other drug developers.
This article was developed in collaboration with PharmAust, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
Health & Biotech
Health & Biotech
Health & Biotech
