Breaking the Alzheimer's Curse

Editor's note: Every 66 seconds, someone in the U.S. develops Alzheimer's disease.

It's the sixth-leading cause of death in the U.S. and affects more than 5 million Americans.

But there is no treatment that slows the progression of Alzheimer's yet... or is there?

In today's Masters Series – adapted from the October 2016 issue of Stansberry's Investment Advisory – Porter and senior research analyst Dave Lashmet explain how one company is leading the fight against Alzheimer's... and why a potential cure may not be as far off as you might think...


Breaking the Alzheimer's Curse
By Dave Lashmet and Porter Stansberry

Chet Mathis was sleepy and nervous as he waited for the late-night call from Sweden.

He had either invented the key to solving Alzheimer's disease... or he'd wasted the last 10 years of his career.

For the previous decade, Mathis – a chemist from California – and Dr. William Klunk of Vienna had been designing a "contrast agent" that, once injected, would cross harmlessly into your brain, then light up during an X-ray. Specifically, their goal was to reveal the brain plaques widely known to cause Alzheimer's disease.

That plaque is what Dr. Alois Alzheimer first noticed in 1906, when the disease was initially discovered. The trouble was, this plaque was only visible during an autopsy. To find it, you had to cut into a brain to sample it. For scientists, that made developing treatments for Alzheimer's a guessing game... In people, you only had external tests like memory games as a metric for success.

Chet Mathis was trying to measure brain plaque in a living person... as a first step toward stopping the disease. The big idea was that if you could reverse the growth of plaque in a patient's brain, you might be able to slow or stop the disease.

Two weeks before Mathis' late-night vigil, the Swedish team testing his contrast agent had called Chet to tell him that the brains of Alzheimer's patients who had received it were lighting up on a brain scan after they got his contrast agent.

For Chet Mathis, that was promising... but not good enough. What if it also lights up in younger people, decades before they would show any signs of Alzheimer's?

So the Swedish doctors recruited two 21-year-old students to see what their brains looked like after receiving the contrast agent.

Chet's phone finally rang. It was Dr. Engel from Sweden.

"The young men's brains are clean," Engel said. The compound worked. And after 10 years of chemistry work, Chet had invented a visible metric for Alzheimer's.

Mathis and Klunk first presented these data to the public in 2003. The 5,000 brain doctors attending the conference gave them a standing ovation.

The two went on to redesign their agent for broad-scale use and sold it to GE Health. After a full decade of clinical trials, GE Health won U.S. Food and Drug Administration (FDA) approval for the improved contrast agent in October 2012. Today, Chet's invention is called "Vizamyl." Big Pharma giants Bayer and Eli Lilly have also developed rival products.

If you've never heard of these drugs, you can thank the government...

Medicare saw no interest in measuring the progress of Alzheimer's, since there's nothing yet that we can do about it. Here's the latest review of all FDA-approved Alzheimer's drugs: "They do not treat the underlying cause of Alzheimer's disease and do not slow the rate of decline."

Despite the fact that none of the existing Alzheimer's treatments actually work, 60% of U.S. Alzheimer's patients still take them... costing our health care system billions of dollars and wasting resources. Brain scans would only add to the annual $100 billion cost we pay now to not treat the underlying disease.

Today, using one of these contrast agents will cost you $1,600, plus the cost of the brain scan, a nurse to give you the drug, and a radiologist to read the brain scan – about $5,000 total out of pocket.

That's why nobody does this. Currently, these scans are only covered (including by Medicare) to rule out Alzheimer's – in case you have a brain infection or brain tumor instead. Those are treatable.

Yet we should note one other exception to using contrast agents for detecting Alzheimer's. This procedure is covered if you are part of an FDA-approved clinical trial to develop new treatments.

So despite the trivial financial returns for Vizamyl so far, these contrast agents have been used more than 10,000 times and produced a mountain of useful data. Here's what we now know about Alzheimer's...

First, plaque forms in your memory centers. The plaque then spreads to the rest of your brain. And eventually to your brain stem. Then you die.

Here's a three-step image of the process where plaque slowly takes over your brain. We first saw this at a brain conference in March, sponsored by the U.S. National Institutes of Health. Take a look:

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The red down arrow marks where the plaque attacks your "primitive" brain. It's the last stage. This stops your internal organs, including your heart and lungs. And by this time, your sense of self is gone.

The long black arrow represents time. From clinical diagnosis of Alzheimer's – severe memory loss being the main indicator – half the patients die in four years. The other half are dead in four more. It's a lethal, tragic downward slope.

Up until now, this has been the natural course for all Alzheimer's patients. But all that is about to change...

Chet Mathis' discovery helped lead to an experimental treatment that is removing brain plaque.

Death by Alzheimer's has simply been accepted as death by natural causes. But like heart disease and cancer, we are on the verge of treating this dreaded disease.

One of the world's top scientific journals, Nature, just published the first human clinical trials that show Alzheimer's plaque can be removed. And they show that this removal slows... then stops... the disease.

Wall Street yawned. Pundits in the investor world said, "We need to see more data"... and "All drugs that promise to treat Alzheimer's end up failing."

But we know what Chet Mathis' contrast agents reveal...

What a Cure for Alzheimer's Looks Like

To put it simply, this could be the potential cure for Alzheimer's.

This drug candidate removes plaque based on how large a dose you get. It also slows or even stops the progress of this disease. And it's reasonably safe. It's not perfect – around 2% of patients will find this drug intolerable. But Alzheimer's disease today is 100% fatal.

The drug (called BIIB-037) itself is a specialized antibody that grabs on to the Alzheimer's plaque. And because this antibody is active, white blood cells inside your brain help dissolve the plaque. The net effect of the specialized antibody and your white blood cells working together can be seen by using a contrast agent for a brain scan. After a year on this drug, the patient's plaques all but disappear.

Here's a collection of brain scans that Nature published on September 1. Each scan from a patient is presented as a heat map, where red (hot) is more plaque and blue (cold) is less plaque. What you will see on the left column is the starting brain scans, which are roughly the same heat intensity.

On the right, you can see the effects in a control group, and three different doses of the drug.

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The more drug you receive, the cooler the heat maps get.

After taking the high dose of this drug for a year, the heat map becomes "normal" – that means you no longer have Alzheimer's plaque.

Technically, you have crossed over the limits of detection. You might have some plaque. But it's the same kind of scan that Dr. Engel called Chet Mathis about... from 21-year old kids... with no visible plaque. It's clean.

Now as you might suspect, these are the "best case" brain scans. In the following bar graph, you can see a summary of the scans of all 130 patients in this clinical trial.

Again, these are grouped by the dose of the drug. We included the fifth group here, which only got a trace of the drug, to help establish the safety profile. Each bar represents a group of 25-30 patients each.

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At the start of the trial, each group had the same average heat map score. As you can see, for the control group that did not receive the drug, the average score doesn't change. But the more of the specialized antibody a patient received, the lower his score fell after a year. The group receiving the highest dose approached the lower limit of detection.

That's what success looks like.

This clinical trial met its primary endpoint. But for investors – and doctors, patients, and caregivers – it's the secondary endpoint that matters here.

You see, this specialized antibody trial also measured the effects of Alzheimer's disease on cognition, using a test called the Clinical Dementia Rating. Here again, how much drug you got mattered a lot.

This Clinical Dementia Rating is an 18-point scale, and a perfect score is zero points. As your cognitive ability declines, your scores get higher. At the start of this trial, the patients had an average score of three points.

No matter how much antibody people got, after six months they all progressed by about half a point. But then, the results diverged. Patients not receiving the drug continued to decline. Those getting the drug saw the erosion of their cognition stop. And again, the larger the dose, the greater the improvement. After a year, the patients on the highest dose saw the progression of the disease stop.

As with the chart above, here's a bar graph that was also published in Nature in 2016. Up on the graph is bad – that means progression. As you can see, the 30 people on the high dose did the best.

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That star above the high dose at the one-year mark matters too. It means that this group had a significant response versus the control group. This was not random chance. It worked.

In practical terms – especially for Alzheimer's disease, which has no effective drugs currently on the market – this result is a home run. At least in this 130-person, double-blind trial, everything we would hope to see came true.

Two more pivotal trials running right now – with 3,500 patients each – are trying to replicate these results. Because if these results are seen again, this is easily an approvable drug... and possibly a cure.

You don't have to take our word for it. Both the American and European regulators have already commented on these results. Last year, the FDA gave BIIB-037 fast-track status.

The European Medicines Agency (EMA) went even further, calling this a "Priority Medicine" – which earns the fastest possible review. The EMA can review the current trials while they run.

Practically, it means these pivotal trials might not have to run their full course. Once a few thousand people have been on this drug for 12-18 months, the trials can end.

BIIB-037 achieved similar positive results as doctors slowly increased the dosage over a year, rather than just starting with a full dose. Slowly increasing the dosage helped to minimize side effects.

Moreover, some patients in this study have now been on the drug for three years. The results indicate that the high- and mid-level doses continue to beat back Alzheimer's plaques – all while preserving a person's cognitive function.

My biotech analyst John Engel and I (Dave) have traveled across the world over the past year to see Biogen's scientists present their findings. Last week, we got an update from John, who attended a major Alzheimer's drug development conference in Boston. The data continue to confirm the drug's initial positive findings. As John explained...

The big news from today is the three-year data from Biogen's aducanumab trial.

After two years on the drug, patients on the highest 10 mg dose remained below levels of amyloid detection. The 6 mg and 3 mg doses continue to remove plaque. Patients in these cohorts haven't reached threshold levels below detection yet. But based on the three-year trendline, the removal of plaque should eventually reach below-threshold levels of detection.

Standardized tests of mental acuity also reveal a dose-dependent slowing of cognitive decline. However, even the highest 10 mg dose indicates progression, albeit a much slower progression.

What's the real impact of these results? Well, in a room full of the world's best Alzheimer's doctors, we can get a pretty accurate reading by simply watching the crowd. Usually, I like to see the number of pictures taken during sessions. That's my best indicator. Since photos were strongly discouraged today, the best indicator this time was the applause. I sat in on a total of 16 sessions today. Biogen's three-year data on aducanumab produced by far the biggest response.

Normally, the FDA takes an average of 18 months or longer to review a new drug application. This Alzheimer's drug has been fast-tracked, which might speed this process up, but it's still the FDA's ball game. It will take as long as it wants.

But now, BIIB-037 may have a new way to speed up the regulators...

The drug's owner recently received approval from the FDA for a different drug that treats hereditary spinal muscular atrophy ("SMA") – the No. 1 genetic disease that kills babies and young children. SMA is an "orphan" (or rare) neurological disorder.

That means that it afflicts less than 200,000 people nationwide. Few companies focus on discovering treatments for orphan conditions because of the small potential market.

But here's why this matters for investors: The FDA grants coupons (called priority review vouchers) to companies with drugs approved to treat rare childhood diseases like SMA. These coupons can be used to get any other drug reviewed within six months. These coupons are transferable and sell for around $150 million.

So now, if the first interim analysis for the BIIB-037 Phase III trials is as promising as the earlier trials, the current studies might stop in 2018. And if it uses its coupon, the drug's owner could have a new blockbuster Alzheimer's treatment available for sale by early 2019, if not sooner.

The best-case scenario is that the pivotal trials might finish sometime next year, leading to drug approval soon afterward. Millions of people are dying from Alzheimer's, and nothing has helped before.

The worst-case scenario is well-known to any biotech investor. For any one of a hundred reasons, this drug could fail to replicate these earlier, stellar results. Or a freak new side effect could occur. Or both.

All these risks exist. As with any investment, you need to protect yourself by using proper position sizes, keeping your entry price low, and sticking to your exit plan.

But this is the best opportunity in beating Alzheimer's we've ever seen.

Regards,

Dave Lashmet and Porter Stansberry


Editor's note: While Porter and his team are extremely bullish on the idea of finding a potential cure for Alzheimer's, they're arguably even more excited about the potential for curing cancer.

That's why next Wednesday, November 15, at 8 p.m. Eastern time, our resident medical and technology experts Dave Lashmet and Dr. David Eifrig are hosting Stansberry Research's first-ever cancer briefing.

There, you'll learn about a scientific breakthrough that could soon be a staple in every U.S. hospital and destroy any cancer you or a family member may one day face... but could also make you up to 500% on a single investment in the little-known company behind it. Reserve your seat for this free event here.