From: Brett Paatsch (paatschb@optusnet.com.au)
Date: Wed Jun 11 2003 - 13:29:40 MDT
MessageI recently found this article.
New aspects of AGEing Chemistry - Recent Developments
Concerning the Maillard Reaction
(Recent being circa April 2002).
I was able to access the pdf free of charge by entering
http://www.publish.csiro.au/journals/abstractHTML.cfm?j=CH&V=55&I=5&F=CH02076abs.XML
and clicking on the free sample button.
This following in " quotes is from the end of the paper.
"Future Directions
"As the chemistry of ageing, and the biochemistry of repair, become
increasingly well understood, the potential for reversing the chemistry
of AGEing increases, raising the tantalizing possibility of anti-ageing
therapeutics. Amadoriases have already been patented due to their
possible role in anti-ageing gene therapies. additionally, several new
compounds have been described in the literature which are
purported to prevent or reverse in vivo Maillard chemistry, and
thence alleviate the symptoms of aging. Some of these compounds
are in clinical trials and undoubtedly reduce pathological effects in
animal models, (153) although their mechanisms of action remains
hotly debated.
In both food science and medicine, the bottleneck in controlling
the Millard reaction and its many consequences remains an
understanding of the underlying chemistry behind these many
and varied processes."
Brett Paatsch
PS: It was something of a surprise to find that the article was
edited by one of my tennis buddies so if there's anything
wrong with it let me know. I may be able to leverage it so
she buys the drinks.
----- Original Message -----
From: Ramez Naam
To: extropians@extropy.org
Sent: Thursday, June 12, 2003 2:24 AM
Subject: extropian investment: Alteon (long)
As long as we're talking about investments, I thought I'd point out one of my favorite stocks at the moment.
Many extropians will remember Alteon. Their drug ALT-711 is an AGE-breaker. AGEs (Advanced Glycation End products) are a kind of extracellular garbage that build up in many tissues of the body as partially burned sugars bond with proteins and make a non-functional glue.
AGEs are implicated in the loss of elasticity in many tissues as we age. In small human and animal studies, ALT-711 has been shown to restore some of this lost flexibility. In particular its been shown to restore lost arterial flexibility and thus reduce blood pressure.
Alteon is currently seeking FDA approval for ALT-711 as a blood pressure drug. They're just wrapping up Phase IIb studies. Phase I studies determined basic safety with a small number of patients. Phase II studies determine effectiveness at various doses with a few hundred patients, and of course also determine safety with this wider population. Phase III studies, the last needed before a drug is approved, are even larger safety studies involving thousands of patients.
Historically Phase II is the hardest phase to get through. Only about 30% of drugs that enter Phase II trials come out of them successfully. On the other hand, drugs that make it to Phase III trials have a 70% chance of succeeding in them.
Alteon is set to release data from the Phase II trials in July or August of this year. The indications are that they'll clear this hurdle. Here's the evidence I base that on:
1) In smaller studies on both dogs and humans the drug has already been shown to reduce blood pressure significantly more than the minimum needed for approval.
2) The drug reduces blood pressure in an entirely new way, so it doesn't have to outperform any existing drug on the market to get approval.
3) Between Phase I and Phase II studies, Alteon doubled the maximum dosage of the drug, indicating that they feel pretty good about safety.
4) Patients in the Phase II trials have the option to stay on the drug after the trial ends. Alteon is reporting that a large number of patients are opting to stay on, which also says good things about safety and side-effects.
5) Alteon's external safety board has not brought any safety issues to their attention.
So all told, I believe that in July or August, Alteon will announce positive results from their Phase II trials. At that time I think the stock will rise substantially.
As a company, Alteon has enough money to complete Phase II trials and operate for a while after that, but not enough to complete expensive Phase III trials. Alteon is currently in talks with major pharmaceutical companies to partner on the Phase III trials and marketing of the drug. If they make it through Phase II trials it's highly likely that they'll get such a deal.
The potential market for ALT-711 is multiple billions of dollars per year. Alteon's current market cap is around $180 million. If we assume a price / sales ratio of 4 (low for the pharmaceutical / biotech industry), and assume that Alteon could be keeping $1 billion / year in sales of ALT-711 after partnership agreements, we get a potential $4 billion dollar market cap for the stock 3 years from now, IFF the drug clears both Phase II and Phase III trials.
$4 billion is about 22 times $180 million, suggesting that the stock has a lot of potential for positive movement.
Let's try to calculate the fair market cap of the stock right after an announcement of success in Phase II trials (which of course hasn't happened yet, but which I believe is likely in the next 60 days).
To figure this out we'll discount the eventual market cap of $4 billion by the likelihood of clearing Phase III trials (70%) and by 20% per year between now and the drug being on the market (estimate 3 years). That gives us $4 billion x 0.7 x 0.8 x 08 x 0.8 = $1.4 billion, or more than 7 times current market cap. Even if we discount by another 50% to reflect uncertainty over a pharma company partnership, potential market for the drug, and so on, we end up with a fair market cap 3 or 4 times over the current price of the company.
Now, I don't actually think the stock will go up by a factor of 7 upon successful completion. I do think it will take a healthy jump, though. And I expect that later in the summer or fall Alteon will announce a partnership with a major pharmaceutical company, which would assure Alteon's survival and will give the stock another jump.
So, that's my long winded way of saying that there's a good short to medium term investment opportunity in this stock for those that are tolerant of risk.
To be clear, there *is* a very real risk with the Phase II studies. They are not complete. When the data is unblinded in July or August, it could be surprisingly bad. The larger studies could fail to find a statistically significant effect on blood pressure. There could be unexpected safety issues. The company leadership could all be thrown in jail for insider trading or accounting scandals.
At the same time, just about every indication it's possible to get in advance of the completion of Phase II studies is positive. They all point to success in Phase II. And success in Phase II will almost certainly result in a substantial rise in stock price.
cheers,
mez
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