BTIG analyst Thomas Shrader, in a June 22 research note, reported that although Athira Pharma Inc.'s (ATHA:NASDAQ) drug fosgonimeton, combined with the standard of care treatment, did not meet the primary endpoint in patients with mild to moderate Alzheimer's disease in the ACT-AD Phase 2 trial, it showed efficacy as a monotherapy.
Fosgonimeton (ATH-1017) is designed to enhance the activity of hepatocyte growth factor (HGF) and its receptor, MET, expressed in the central nervous system to promote brain health and function.
Because none of the active drugs in the Alzheimer's space halts or reverses disease progression, "fosgonimeton is in a unique place as HGF-c-MET stimulation could improve the function of nerve synapses (stronger connections) as well as increase the number of synapses between neurons," Shrader wrote.
Shrader presented the highlights of the ACT-AD Phase 2 trial results. The primary endpoint was change in biomarker ERP P300 latency. Whereas improvements were observed in this electroencephalogram measurement with combination fosgonimeton plus the standard of care acetyl-cholinesterase inhibitor (AchEI) therapy, they were not statistically significant for the entire study population. In fact, with combination therapy, the effect of fosgonimeton seemed decreased.
Shrader pointed out this outcome could have resulted from any of the 17 evaluated patients not being entirely treatment-naive going into the study.
On the other hand, a subgroup of patients in ACT-AD who received fosgonimeton as a monotherapy (versus placebo) experienced results. That group, at week 26, showed improvements in P300 latency and, the secondary endpoint, score on the Alzheimer's Disease Assessment Scale—Cognitive.
Also positive, fosgonimeton was tolerated well and demonstrated a favorable safety profile overall.
The bottom line, Shrader explained, is if fosgonimeton, one, provides effects similar to those of AChEls and, two, its effects can occur after AChEIs are administered, "it's a compelling story." This holds true even if the positive impact of fosgonimeton is short term, over six or 12 months.
Further, the drug could be transformational, added Shrader, if it works as well as AChEIs in the short term and if it leads to some neural growth and repair. The current Phase 2 results likely cannot shed light on the latter, though, he noted.
Additional data are to come in H1/23 with results of the LIFT-AD clinical trial, evaluating fosgonimeton as a monotherapy in about 200 people with Alzheimer's disease.
BTIG has a Buy rating and a $33 per share price target on Athira, the current share price of which, in comparison, is around $2.81.
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Disclosures for BTIG LLC., Athira Pharma, June 22, 2022
Analyst Certification: I, Thomas Shrader, hereby certify that the views about the companies and securities discussed in this report are accurately expressed and that I have not received and will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this report. I, Sung Jun Hong, hereby certify that the views about the companies and securities discussed in this report are accurately expressed and that I have not received and will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this report.
General Disclosures: BTIG LLC expects to receive or intends to seek compensation for investment banking services in the next 3 months from: Athira
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