Initiating coverage on drug developer that offers a whopping return

Leede Jones Gable analysts Douglas Loe and Siew Ching Yeo are initiating coverage of antibody-based drug developer ProMIS Neurosciences Inc. (TSX—PMN) with a “speculative buy” recommendation. Their initial price target of $0.50 a share corresponded to a significant one-year return of 355 per cent (as of May 11). Following its 60-for-1 share consolidation, they move their target price to $28.50 per share – a 245 per cent return (as of July 6).


Drug developer that offers a whopping return

ProMIS is a preclinical-stage monoclonal antibody (mAb) developer targeting conformational peptide epitopes (affecting Parkinson’s disease, ALS and Alzheimer’s disease).

The firm’s lead preclinical asset is PMN310, a humanized mAb drug that selectively targets conformational epitopes within misfolded toxic amyloid-beta oligomers. These are an intermediate form of brain-derived amyloid protein that available biochemical evidence is showing to be tightly associated with pathophysiology of Alzheimer’s disease.

They’re also relevant to Parkinson’s disease and related motor neuron disorders, and the disorder amyotrophic lateral sclerosis (ALS, or Lou Gehrig’s disease; named after the 1920-30s New York Yankees first baseman who famously succumbed to the disease in 1941).

In North America, the current prevalence rate is estimated to be 572 per 100,000 in those aged greater than 45 years, with a current estimate of 680,000 individuals with the disease in the U.S. (within that stated age group). It has been projected that this proportion of patients could increase to 1.2 million by 2030.

Causes of the disease remain poorly established, with genetic factors only contributing to 10 per cent to 15 per cent of all Parkinson’s disease cases. Age remains the largest risk factor for developing the disease, with PD commonly diagnosed in people over the age of 60.

AbbVie vying for a similar Alzheimer’s treatment

Global pharma giant AbbVie Inc. owns some relevant U.S. patents on the utility of oligomer-targeted mAbs in Alzheimer’s disease, though the analysts do not believe that formal clinical trials exploiting this intellectual property is currently ongoing. Indeed, there is evidence from the United States Patent & Trademark Office database that American multinational Abbott Laboratories was working to develop beta amyloid oligomer-specific mAbs earlier this century, with an early patent issued in 2011 that described methods for generating stable oligomers for use in vaccines or as antigens for mAb generation.

Follow-on patents have since been issued to drug development such as the Abbott Laboratories spin-out AbbVie’s trial in 2015 and 2019, suggesting that AbbVie could become focused on toxic beta-amyloid oligomers in future drug development initiatives. The survey of AbbVie’s pipeline indicates that it has one clinical-stage mAb targeting Alzheimer’s disease in ABBV-916, which is targeting an N-terminal truncated pyroglutamate-modified beta-amyloid-derived peptide, but the description of the mAb’s characteristics does not allude to any beta-amyloid oligomers in its design.

“Since our initiation in the second fiscal quarter, ProMIS has documented supplemental preclinical data that further supports PMN310’s impact on oligomer formation and toxicity, and on the cognitive impairment that this toxicity confers. We were encouraged to see in ProMIS’
June 2022 investor presentation that it has made solid positive progress on PMN310 preclinical testing just in the intervening weeks since we launched coverage.

“We will watch with interest to see how AbbVie’s pipeline priorities overlap with ProMIS in coming quarters…On the milestone watch, we expect ProMIS to conclude PMN310 preclinical testing in the next quarter or two, and then submit an investigational new drug (IND) application to the FDA that if favorably reviewed should allow the firm to commence formal Phase 1 clinical activities in the first quarter of 2023.” the analysts conclude.

Douglas Loe and Siew Ching Yeo are equity analysts for Leede Jones Gable with a focus on the healthcare and biotech industry.

This is an edited version of an article that was originally published for subscribers in the June 3, 2022, issue of Investor’s Digest of Canada. You can profit from the award-winning advice subscribers receive regularly in Investor’s Digest of Canada.

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