Background:

Alzinova AB (Gothenburg) is a Swedish biotechnology company engaged in the discovery and development of therapeutics for the treatment of Alzheimer’s Disease (AD).

The company was founded in 2011 by the inventors of the AβCC peptide technology (patent pending) and MIVAC Development AB, in close collaboration with GU Ventures–the holding company at the University of Gothenburg in Sweden.

Per Labiotech.eu, the company’s approach exploits the unique properties of Aβ, a protein fragment (called an “oligomer”) that accumulates in the brain as the disease progresses. The fragment is difficult to target as it is constantly in transition, moving between soluble and insoluble states. AβCC peptide technology overcomes this by holding the Aβ protein in a stable state so that it can be more easily targeted.

Alzinova is currently developing a highly specific oligomer-directed vaccine (ALZ-101). It’s also developing a diagnostic tool based on a monoclonal antibody (ALZ-201).

The development of an effective Alzheimer’s treatment has proven unsuccessful for biotechs around the world. But, this might be about to change, says Labiotech. With Alzinova able to pin down a target, biotechs are no longer aiming at a shifting object. I

t will be interesting to see whether Alzinova is approached by companies in the field like AC Immune SA (Lausanne CHE), which targets both Aβ and Tau, and Probiodrug AG (Halle DEU), which is ready for a Phase 2b.

Hopefully, this is the necessary step that the field needs to take to solve the puzzle that has long eluded even the pharma titans such as AstraZeneca PLC (London), Biogen Inc. (Cambridge MA) Merck & Co. (Kenilworth NJ), Roche Holding AG (Basel CHE) and Eli Lilly & Co. (Indianapolis IN).

Steve’s Take:

AD affects over 5 million Americans. It’s the sixth-highest cause of death in the U.S. There’s such an intense demand for effective treatments that research and consulting firm GlobalData projects the market for Alzheimer’s disease drugs could top $13 billion by 2023.

While there’s a lot of potential, developing AD treatments has proven to be a very risky business. Several of the experimental drugs in development have not proven to be effective in earlier studies. Historically, Alzheimer’s has one of the worst drug failure rates of any disease. Between 2002 and 2012, only one out of 244 Alzheimer’s drug candidates won approval–a dismal 99.6% failure rate.

It’s entirely possible that none of the five companies mentioned above will ever succeed. Even Lilly is still clinging to dim hopes for a BACE inhibitor candidate, and a monoclonal antibody candidate doesn’t necessarily give the drugmaker an upper hand.

That’s why, tucked into the cold, damp and dark climes of Gothenburg, tiny Alzinova works tirelessly on its core mission to unlock the secret for an effective Alzheimer’s treatment which, so far, has hidden behind an impenetrable wall.

With less than 10 full-time staff, the 7-year-old company is testimony that a billion-dollar pot of research funding isn’t always guaranteed to produce real-world scientific advancement in defiant disease treatment. Alzinova appears well on its way to doing just that. (Also see my piece on Scotland/Singapore’s tiny TauRx Therapeutics Ltd.)

Bottom Line:

To recap, Alzheimer’s disease is a therapeutic area in dire need of effective treatments. The disease, which primarily afflicts the elderly (65+), irreversibly destroys brain cells and, by so doing, affects the patient’s cognitive ability.

Early symptoms typically include memory lapses, mood swings, and difficulty in finding words for everyday things. As the disease progresses, symptoms become worse and the patient is likely to eventually require round-the-clock monitoring in a nursing home.

Steve's Take: I believe it’s a rational bet, and not a pure gamble, to buy a small piece of #Alzinova
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AD slowly kills the patient in a process that, on average, takes about 7 years.

According to the World Alzheimer Report 2015, the total annual cost for all dementia is currently $818 billion, and is projected to become a “trillion-dollar disease” by 2018.

AD constitutes approximately 60-80% of all dementia, and therefore accounts for most of this cost. Due to a growing and ageing global population, 52 million Alzheimer’s cases are estimated by the year 2030 and 92 million by 2050.

Alzinova claims that its AβCC peptide technology is a “great tool” for improving the productivity in the field of AD therapeutics.

In its own words, such technology, “effectively solves the problem associated with developing therapeutics against the metastable soluble amyloid-β (Aβ) toxins (oligomers/protofibrils) that play a central role in the disease process.”

The company trades on the Swedish Stock Exchange in Stockholm. The company has a market cap of 81.08 million krona ($9.73 million). It’s 52-week range is 10.80–18.70 krona. And its 1-year return is -11.4%.

There’s a lot of risk betting on a company this small, working exclusively in a disease field of such unmatched, abject failure. But it smacks of exactly the type of takeover target that the 5 big-pharma’s I mentioned above are no doubt watching very closely.

Alzinova’s unique, Proprietary Peptide Technology could be worth billions to any one of the big players. I believe it’s a rational bet, and not a pure gamble, to buy a small piece of this name. But definitely not the ranch.

Steve Walker has no position in any stocks mentioned. MedContent Inc. has no position in any stocks mentioned. MondayMorning.com has a disclosure policy.