Neurochem's Risky Bet

Let's go back to the phase II study that Neurochem ran to justify advancing Alzhemed into its pivotal phase III program. Results from that study were published in November in the medical journal Neurology.

Phase II studies are typically small in size; in fact they're rarely big enough, but in this case, Neurochem enrolled just 58 Alzheimer's patients, randomized to doses of 100, 200 and 300 milligrams of Alzhemed and a placebo arm.

After three months of treatment, there was no difference in cognitive function, memory performance or any other efficacy measure between the Alzhemed and placebo patients. On the other hand, the drug's safety profile was clean, and tests showed that the drug was getting into the central nervous system of patients and was reducing the levels of a biomarker for the beta-amyloid protein.

To be fair, three months of treatment doesn't allow much time for any Alzheimer's drug to show a clinical benefit. So Neurochem extended the study. All patients, including those previously on placebo, were invited to participate in an open-label, single-arm extension study using the 300 mg dose.

Efficacy, defined as a change in cognitive function, was assessed again at various time intervals. Because all patients in this extension study were on Alzhemed, there was no real control arm for comparison. Therefore, Neurochem decided to make comparisons using previously published data from other Alzheimer's disease trials in 1994. Efficacy was measured using the ADAS-cog test, a 0-to-70 scale of cognitive function.

The chart below summarizes some of the data from the phase II trial. In this case, smaller changes in the ADAS-cog score compared to baseline represents better outcomes for patients.

Alzhemed Phase II Open Label Extension Study Change in ADAS-cog Score from baseline
	3 mos.	6 mos.	9 mos.	12 mos.	16 mos.	20 mos.
Sample Size (mild/moderate AD patients)	42	41	34	30	26	24
Mean change in ADAS-cog score	1.5	2.2	3.5	4.5	5.5	7.5
Historical control (1994 data)	n/a	n/a	5.0	7.2	9.6	11.9
Source: Company reports

At first glance, it looks good for Alzhemed. All the patients are losing cognitive function over time, but patients on Alzhemed are progressing at a slower rate. At 20 months, for example, Alzhemed patients had a 7.5-point worsening of their cognitive ability based on the change in their ADAS-cog score, compared with an 11.9-point increase in the historical control group. (Remember, the higher the number, the worse for the patients.)

But there are problems with this data.