NeuroSense: A Hold Ahead Of Phase 2b ALS Data (NASDAQ:NRSN)

Thesis

NeuroSense (NASDAQ:NRSN) is a microcap focused on the treatment of neurodegenerative diseases.

It is running a Phase 2b trial in 69 patients diagnosed with ALS, a fast-progressing neurodegenerative disease which is historically difficult to treat, with drug candidate PrimeC. Topline data of this trial are expected in Q4 2023.

NeuroSense is also targeting Alzheimer’s disease and Parkinson’s disease with the same drug under different names, CogniC and StabiliC respectively, though trials in both indications have yet to commence.

PrimeC for ALS is a combination of two existing drugs, an existing anti-inflammatory celecoxib and an existing fluoroquinolone antibiotic ciprofloxacin. An earlier open label Phase 2a trial in 15 patients patient population over the course of 12 months had reported a minor reduction of disease progression in ALS, without statistical significance. NeuroSense has recently reported increased survival rate of cultured motor neurons in induced pluripotent stem cells derived from the blood of people with ALS. The combined effect was all-in-all moderate in my opinion.

Combination therapy may be useful in ALS, and I wanted to share my view on PrimeC’s results so far and some of the existing data on both celecoxib and ciprofloxacin ahead of the data.

At an $8 million market cap, NeuroSense does come particularly cheap and any good news may allow the stock to move up, also taking into account the historical rate of decline and unmet medical need in ALS. On the other hand, results which the market may perceive as a failure generally lead these biotech stocks to sell off. After recent funding, and though NeuroSense claims its cash is now enough to last until Q2 2024, I believe it would require much more cash if it were to commence further trials.

At this point, I rate the company as a hold.

Company

Introduction

NeuroSense is an Israël- and US-based biotechnology company pursuing treatments for neurodegenerative diseases, that IPO’d on the Nasdaq at the end of 2021.

Its pipeline mentions ALS, Alzheimer’s disease and Parkinson’s disease, though only trials ALS have already started. A Phase 2 placebo-controlled trial in Alzheimer’s should start in the course of this year, and for Parkinson’s Prime C is still at a preclinical stage.

NeuroSense’s drug candidate, tagged PrimeC for ALS, is a novel combination of existing drugs celecoxib and ciprofloxacin. Given the early stages of NeuroSense’s drug candidate both in Alzheimer’s disease and Parkinson’s disease, the primary focus of this article will be on ALS. Given the tiny market cap of NeuroSense, the analysis will also be shorter than what readers of my other articles are used to.

PrimeC for ALS

Introduction to ALS and approved treatments

ALS is a neurodegenerative disease affecting motor neurons which leads to death in 2-5 years on average after diagnosis. The disease is multifactorial and may present differently in each patient. Some causes often quoted, apart from genetic factors, are inflammation, oxidative stress, endoplasmic reticulum stress and mitochondrial stress.

There are about 5,000 new cases each year in the US alone. NeuroSense targets a total patient population of about 80,000 patients worldwide. The 2022 ALS market size was worth $613 million, though NeuroSense estimates its market opportunity to be worth about $3 billion [slide 6].

Seven therapies for ALS have been FDA-Approved Drugs for Treating ALS by the FDA to treat functional decline and symptoms, though efficacy of some of them is still debated. I am quoting those that are most in the picture below.

Radicava [ederavone] has been approved in 2017 after having shown a 33% slowing of functional decline in a phase 3 trial. Another trial reported in 2023 showed a 41% slowing of functional decline in patients with poor lung function. A meta-study published in 2023 however reported more debated efficacy.

Amylyx’s (AMLX) Relyvrio [AMX0035], a combination of sodium phenylbutyrate and taurursodiol thought to work on endoplasmic reticulum and mitochondrial stress, was approved in 2022 based on slowing of functional decline over a 24-week period, i.e. -1.24 points per month on the ALSFRS-R scale with Relyvrio versus -1.66 points per month with placebo. Interestingly, here, this approval followed a first negative FDA Advisory Committee, followed by an approval in Canada. Also, the average rate of decline of ALS patients on the 48-point ALSFRS-R scale is 1 point per month, which could imply patients in the Amylyx trial progressed more rapidly on average.

Biogen’s (BIIB) Qalsody [tofersen] has most recently been approved on an accelerated basis for a small genetically predisposed subset of patients after having shown a rather massive reduction of values of the biomarker NfL.

PrimeC for ALS

As a combination therapy for ALS, Prime C has received orphan drug designation both from the FDA and the EMA. PrimeC is a novel extended-release oral formulation of the nonsteroidal anti-inflammatory drug [NSAID] celecoxib and ciprofloxacin, approved for a variety of bacterial infections. PrimeC is supposed to address neuroinflammation mostly by celecoxib and to regulate and iron accumulation primarily by ciprofloxacin.

Celecoxib is a selective COX-2 inhibitor, a non-steroidal anti-inflammatory drug or NSAID. This is consistent with findings that prolonged uptake of NSAIDs such as ibuprofen, naproxen or rofecoxib appear to lead to reduced risk of developing neurodegenerative diseases, though these drugs have not been able to significantly slow decline in any of these diseases. Though a selective COX-2 inhibitor such as celecoxib may lack the adverse effect of other NSAIDs as it inhibits primarily the pro-inflammatory stimuli and cytokines, I think that chances are low that NSAIDs are sufficiently specific to bring performant results in AD and perhaps any other neurodegenerative disease characterized by inflammation.

Ciprofloxacin is an anti-inflammatory antibiotic, which apparently works through TLR4 and NF-kB, both interesting drug targets in neurodegenerative diseases as they also come into play into, e.g., BioVie’s (BIVI) or Cassava’s (SAVA) story. Ciprofloxacin is a fluoroquinolone type antibiotic, which is considered by the FDA to have serious side effects such as dangerous drops in blood sugar and neurological side effects that can include delirium and memory problems. Aortic aneurysms, tendonitis, tendon ruptures, retinal detachment, peripheral neuropathy, and neuropsychological impairment including psychosis have also been reported as side effects of this type of drug.

However, in the case of the combination of both celecoxib and ciprofloxacin into PrimeC, so far no serious adverse events have been reported, and most adverse events were transient and unrelated to PrimeC.

The combination therapy is protected by patent which should be valid through 2038 and have been granted in the most crucial territories, such as the US, Canada, Europe, Japan and Israel.

The prior data and ongoing Phase 2b trial

Prior to its IPO at the end of 2021, NeuroSense had already finalized an open label Phase 2a trial in ALS in 15 patients.

PrimeC slowing functional and respiratory decline compared to the Pro-ACT database, a publicly available database of merged ALS clinical trials data, by respectively 18% and 30%.

Patients treated with PrimeC had an average ALSFRS-R total decline of -0.84 points per month, whereas patients in the reference Pro-ACT databased had an average -1.02 decline. That makes a difference of 18% on the ALSFRS-R scale.

On a biomarker level, NeuroSense had reported a statistically significant decline of TDP-43 and prostagladin2 compared to patients with ALS. These are the full biomarker results, which also show no major difference in NfL values, as the scientific publication on the Phase 2a trial confirmed that levels of serum NfL remained stable over the trial. As NfL is a primary biomarker of neurodegeneration, which is thought to coincide with efficacy, I believe this is important. Even more so, comments made during the BrainStorm Cell Therapeutics (BCLI) Advisory Committee meeting, where the +-10% reduction of NfL by BrainStorm’s patients in ALS was discussed, seemed to imply that the threshold for NfL reduction may need to be more than 10% to imply efficacy.

No reporting has been made on more known biomarkers such as AB, AB42/40 ratio, P-tau181, P-tau271, sTREM2 or Neurogranin.

Recently, NeuroSense also reported results from an in vitro study with induced motor neurons generated from people living with ALS, showing a significantly increased survival rate.

Though I noted differences here, it is hard to see whether there is truly a synergistic effect. It appears to me that these results show some promise, but no more than that. I would in any case not call them astounding, as did NeuroSense.

In an earlier study, PrimeC had performed ‘among the best in improving motor neuron survival when compared to several other ALS drugs in development and two ALS FDA approved drugs’.

These data are surely interesting from the standpoint of the remarkably small market cap of NeuroSense, but they are not compelling for me for the treatment of ALS. There are, I believe, other competitors / drug candidates out there that perform equally well or better.

French AB Science (OTC:ABSCF) had reported that its drug Rilutek in combination with riluzole had significantly slowed disease progression by 27% compared to standard of care alone in a Phase 2/3 study, and AB Science is seeking approval from the EMA on that basis, while it is also pursuing a Phase 3 trial.

High dose vitamin B12 has been reported to slow decline by 43%.

In March of this year, Coya Therapeutics (COYA) which I have covered before had reported stabilization of disease over 48 weeks, albeit in an even smaller patient population.

These three treatment candidates in development, Rilutek, high-dose vitamin B12 or Coya 302, are not mentioned in the above graph. There may not yet be data for any of them, but these are in any case also in development, and may at a given point turn into competitive threats for NeuroSense, if not already. However, the comparison to AMX0035 and Radicava is interesting.

The ongoing placebo-controlled Phase 2b trial will enroll 69 patients 2:1 PrimeC to placebo for a 6-month period, following by a 12-month open label extension.

This trial should report data in the current quarter. Its primary efficacy biomarkers are TDP-43 and Prostagladin2. NeuroSense is collaborating with Biogen on reporting results of the biomarker neurofilament light NfL. That is interesting and important, not only because that data had given rise to accelerated approval for Biogen’s Tofersen, but also because Biogen has obtained a right of first refusal for any potential licensing agreement to co-develop and commercialize PrimeC.

Most importantly for investors, however, will be to find out whether PrimeC can bring similar or better results compared to the open label Phase 2a study on the ALSFRS-R functional rating scale, which is the most important measure that is important to patients and caregivers.

CogniC for AD

As stated above, NeuroSense plans to initiate a placebo-controlled Phase 2 trial in Alzheimer’s Disease as well in the course of this year. That trial has a limited set of patients and will take 12 months. The secondary efficacy clinical outcomes have not yet been specified, insofar as I know. This is the planned trial design.

NeuroSense has shared biomarker data comparing healthy versus Alzheimer’s patients, which may show a potential target for CogniC/PrimeC, as several measures that may be influenced by CogniC could be reduced and are elevated in AD.

NeuroSense particularly focuses on biomarker TDP-43, a protein involved in regulating RNA expression which appears elevated and seems to spread similar to other aberrant proteins in several neurodegenerative diseases. The protein, which appears in 57% of AD cases, appears to colocalize with senile plaques and tau tangles, two historical hallmarks of Alzheimer’s disease. TDP-43 had been shown to be reduced in its earlier Phase 2a study in ALS, and which appears to be elevated in AD. The hope would then be that the same happens in Alzheimer’s disease. This biomarker is rather novel to me, and I have not seen it appear of major importance in other trials.

Interesting is also that celecoxib has already been tested in Alzheimer’s disease as a standalone therapy, where it did not appear to slow progression of AD at a 200 mg dose. On the other hand, celecoxib did show some results in animal models. In different neurodegenerative models, celecoxib has been found to promote survival, gene expression of neuroprotective marker genes, and reduce microglial activation. In neonatal rats exposed to systemic lipopolysaccharide, it reduced brain dopaminergic neuronal dysfunction.

Financials

NeuroSense had $7.1 million in cash at the end of June 2023. Around that time, it had priced an offering of common shares at $1.50, to raise $4.5 million. Some days ago, NeuroSense announced that it had terminated its at-the-market offering as it now sufficiently capitalized into Q2 2024.

Given NeuroSense’s annual cash burn of about $5 million, this statement appears correct at first sight.

However, much will depend on the company’s future strategy, which I assume will in turn depend on the upcoming results. If trials are to be started in Alzheimer’s, and additionally either FDA approval sought or further trials started in ALS, that cash burn may rise considerably in the coming year or years.

Risks

As a biotech company, NeuroSense’s stock holds particular risks related to regulatory authorities’ supervision of trials. Trials can be halted, or planned trials may not be started in light of decisions of regulatory authorities. The company may also at all times decide to suspend or terminate programs, whether or not in light of cash needs or insufficiencies.

NeuroSense’s stock has furthermore shown particular volatility at several time points since its IPO. For example, NRSN stock climbs on promising biomarker data for ALS candidate (NRSN) on an ALS biomarker had NeuroSense’s stock climb 56%, and novel biomarker TD-42 results for Alzheimer’s had the stock rise 92% in the beginning of this year even though a trial has not even begun in this indication.

Finally, readers of earlier articles of mine may know that I consider that success in these indications may not only be related to the ‘right’ selective drug which allows homeostasis, but also to study design, and drug-matching patient biology.

Conclusion

NeuroSense is about to report topline data from its Phase 2b trial in ALS. Its drug candidate PrimeC is a combination therapy in a unique formulation of NSAID celecoxib and antibiotic ciprofloxacin. So far, that drug combination has shown no serious adverse events. Though each of both parts of that drug combination appears interesting of its own, I am not particularly impressed by the biomarkers reported by the company to date, particularly NfL values from the Phase 2a trial.

That trial did report a 18% slowing of cognitive decline. As it was open label, it is hard to assess whether those results may be able to be repeated in a placebo-controlled trial. If so, I expect volatility to the upside for investors given the extremely low market value of NeuroSense’s stock. There is certainly the potential for upside. In comparison, Amylyx’s market cap is $1.2 billion and Coya Therapeutics’ market cap is $33 million.

An 18% slowing of cognitive decline is certainly meaningful, also as PrimeC could perhaps one day be used in combination with other therapies, approved or to be approved. But it is not the strongest result that has recently been reported in studies for treatment candidates of ALS.

Failure to reach statistical significance, or lack of meaningful efficacy, may cause the stock to go down, even if NeuroSense’s current funding is probably higher than its current market cap.

NeuroSense is a microcap stock with historical price volatility on news. Further risks have been identified in the above article, including in its Risks section.

Editor’s Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.