084 - Navigating the Neurodegenerative Disease Subsector | $CRTX $AVXL $ALEC $CYCN $SAVA
Lincoln the description below so excited to be back. And i've got a great show for everybody today. We're gonna be talking about companies that are involved in the neuro generation space. And the reason why i wanted to do this is that some companies saw a huge increase in their stock price. After cassava scientists released their updated data on their alzheimer's asset. And i thought it would be useful for us to look at other companies in the space to get more broad brush on the landscape of neuro degenerative diseases and see whether or not some company stand out as better or worse investments. So today we're gonna talk about cortex sign annex. Scientists elector cycling on. And we're gonna touch a little bit on cassava scientists. And before i get into the show i did want to mention that. I'm going to be doing an ask me anything on the sub reddit. Biotek plays so. Check out that sub. Reddit there's actually really nice community there. People who are interested in the biotech sector and they've just reached ten thousand subscribers. So check that out and input your questions on a spreadsheet. That's over there. And i'll do my best to answer them. I think it starts at one pm at pacific standard time and with. Let's just get right into the show. And before i get into the actual companies involved in the space. I did want to talk about the potential total addressable market. And it's important that we start off with this and i'm not going to belabor the slide too much 'cause i did touch on it last time but we want to know is the potential revenue company could garner if their asset went all the way through the clinical process and finally got approved and marketed. So that patients could actually reach the drug. The best way for us to do this in my opinion is to look at a previously approved drug. That looked similar indication and one. That's great for the alzheimer's market is one called. The generic name is dan episode and this drug was a wild success. It treats the symptoms associated with alzheimer's disease but it doesn't actually change the course of disease progression and what we can do is look at the pricing air set. Multiply that by the total number of alzheimer's disease patients in the usa. And then we come up with a total potential addressable market. That drug. Going through the pipeline. Right now could potentially garner if it was approved and in this way it sort of a best case scenario if a company could get their drugs successfully through the pipeline and i did this math with air set from pricing based off of two thousand and twelve and we come up with twenty four billion dollars a year and obviously that's a huge increase from what a lot of these companies are valued at today and the reason for this is particularly difficult to get these drugs all the way through the clinical process and then fda approval the other thing we can do is compare previous sales figures so for air sept in particular the peak sales reach around three point. Five billion dollars. In two thousand nine and two thousand ten now obviously. This is a long way from twenty four billion dollars year but you have to keep in mind that previous sales figures are a snapshot from that time and not to mention that a drug that potentially can change the course of the disease rather than just treat. The symptoms could probably garner significantly higher price tag than what air sep did in two thousand and nine ninety thousand ten so i think for us kind of an optimistic target for cns companies are able to get all the way through the approval. Process could be somewhere in the range of ten to twenty billion dollars and that's a useful metric for us when we go to evaluate the risk reward taking investment in one of these companies. And my last point here is just to mention that we have to discount that potential price tag by quite a bit given that. Cns companies fail very very often even higher than your average company in the biotech sector. And with that. Let's talk about our first company which is coretec sign and they traded on friday the nineteenth at thirty two dollars and fifty cents a share giving them a market cap of around nine hundred and sixty million dollars their net loss in q three of two thousand twenty twenty two million and they have current assets of q. Three twenty twenty of one hundred forty three million with current liabilities at sixteen million dollars and this company is targeting a bacterial brain infiltrate that occurs from the mouth and this bacteria that's causing this is called p. ginger vallis and what it does apparently is it can go through the mouth into the brain and secrete. This protein called ginger pain proteges. And this pros as has been known to cause inflammation and then eventually correlate highly with neurodegenerative disease. What the company is hoping to do is commercialized. An asset that is able to inhibit this protease called lysine. Ginger pain with their inhibitor. At zagan stat or core three eighty eight. And in this way. They're hoping to change the course of alzheimer's disease since the association with this bacteria and this is correlate really high with mild cognitive impairment and alzheimer's disease so their main asset is core radiate and. They're looking at alzheimer's disease. Pero donald disease as well as parkinson's disease. They have a number of different assets but because courts radiate is the furthest along. It's the one that i think contributes the most to the current market cap. So i'm gonna focus on that and to give a bit of background on the asset. It's orally available. It penetrates the blood brain barrier which is very important for a cns drug and they have pan protection until the year. Twenty thirty seven now. We're the company's at is they finished phase one b and. They looked at older volunteers. That were healthy and then older patients that had actual alzheimer's disease. They did a number of different cohorts courts. One two three are the volunteers treated for ten days and then cohort four patients with actual alzheimer's disease and they treated them for twenty eight days.