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From Lab Bench to Bedside: David Lowe Brings Common Sense to Neuroscience Investing

Billions of dollars have been spent chasing molecular targets in neurological diseases that now appear to be worthless. Effective therapies remain rare. But the market is enormous—and low
The Life Sciences Report: Featuring investment ideas in biotechnology, pharmaceuticals, medical devices, tools and diagnostics in interviews with industry-sector experts–analysts, money managers and newsletter writers–backed by the latest research summaries, news and company profiles. It's a combination of information and insight investors can't get anywhere else.
The Life Sciences Report: Featuring investment ideas in biotechnology, pharmaceuticals, medical devices, tools and diagnostics in interviews with industry-sector experts–analysts, money managers and newsletter writers–backed by the latest research summaries, news and company profiles. It's a combination of information and insight investors can't get anywhere else.

Billions of dollars have been spent chasing molecular targets in neurological diseases that now appear to be worthless. Effective therapies remain rare. But the market is enormous—and low risk—if a company can get a truly workable solution to patients. Consultant and neuroscientist David Lowe, president and CEO of NeuroAssets, helps biotech firms identify targets and find innovative ways to rapidly move drugs into the clinic. In this interview with The Life Sciences Report, Lowe describes one company with exciting preclinical and clinical-stage assets, and advances two more names worthy of investor attention.

The Life Sciences Report: David, you provide numerous services to your clientele. Could you please give an overview of NeuroAssets?

David Lowe: Sure. We're a transatlantic advisory company. We offer advice and sometimes hands-on operational management of research and development (R&D) programs in the neuroscience space. We are entirely focused on neuroscience, and work with a mix of private and public biotechs in Europe and the U.S. We've had some interactions with Japanese companies as well.

I also have some experience with a publicly traded company, where I was the chief scientific officer and a board member. I am currently an independent director at Amarantus BioScience Holdings Inc. ($AMBS), a publicly traded company that my firm is working with now.

TLSR: Generally speaking, what kind of advice might you give a client company?

DL: We offer high-level strategic advice, such as which areas to focus on with the technology or the compound/compounds that a company has. Our advice also can involve curing a management issue. We might be asked to step in as an interim chief scientific officer, or even as chief executive officer.

TLSR: You consult with clients ranging from small, private startups to micro caps to mid-cap companies. That's a wide range, isn't it?

DL: Yes. But let me add that we also have frequent and intensive interactions with large pharmaceutical companies working in the neuroscience area. That actually complements what we do on the private, micro-, small- and mid-cap fronts. We don't work directly for large pharmas like Novartis AG ($NVS), Roche Holding AG ($RHHBY), Sanofi SA ($SNY) or Eli Lilly and Co. (LLY), but we definitely know what's going on, and we know the right people to contact in those organizations about any particular R&D or business development opportunity.

We also know what's going on in the in-licensing arena, which has been useful in the case of Amarantus BioScience. We helped to find the eltoprazine molecule that the company licensed; the molecule is now in Phase 2b for Parkinson's disease levodopa-induced dyskinesia (PD-LID), as well as attention-deficit hyperactivity disorder (ADHD). Amarantus CEO Gerald Commissiong led the charge on the negotiation front and did a brilliant job.

TLSR: In some ways you extend your influence very much like a venture capitalist or investment banker. You're performing some of those functions, it appears.

DL: We don't put together funds to invest in companies, but we can help companies find finance sources, and we can work with CEOs doing road shows, going around Wall Street and to San Francisco and other parts of the U.S. We've also built some networks on the Swiss financial scene since setting up here in the Geneva area. We're trying to get more knowledge and experience working with European networks because we think that in countries like Switzerland, and to some extent the Netherlands and the United Kingdom, there are a lot of untapped investors. European investors are not presented with opportunities as intensely as investors in the U.S.

TLSR: Suppose a small company has a good idea or maybe a small portfolio of molecules that could potentially target an unmet need. How might you help that entrepreneur or company develop that technology from the discovery or preclinical stage? What's the first thing you might do?

DL: The first thing I'd do is analyze the intellectual property (IP), because we don't want to get too far out of the station unless we have a bulletproof IP situation. Let's say you have an idea in an academic lab. Depending on how much money is available, you might persuade the university technology transfer people to file for meaningful provisional IP. If you're further down the line, you have to find an investor who believes in the technology and its usefulness, and is confident about the IP situation.

Once I have a strong sense that the IP analysis is going to be positive, I start putting project plans together, to figure out what's missing and how we are going to get to the next step, which is basically getting into the clinic as soon as possible. That means determining which disease indication you're going for and what the route of administration is going to be. The investigational new drug (IND) pathway is pretty standard, such that if we're going for an eye or ear indication, there are standard regulatory pathways to follow.

I'm looking constantly at the "doability," which has to be analyzed. Where you see hurdles or challenges, you have to find innovative and intelligent solutions to them.

TLSR: David, a researcher obviously needs to get toxicity screens done in preclinical models. But beyond that, how much preclinical proof of concept does a researcher need before he or she can begin raising capital for a startup?

DL: That's a good question. It varies with the project, and it certainly varies with the investors. I would say that a good investor is probably satisfied with, let's say, two models. There are some cases where there aren't any models, perhaps because the therapeutic agent is specific to a human protein and is not demonstrable in animal models. If that is the case, it's going to be about belief in the project and the people involved, and getting the therapeutic through the IND process.

In an exotic case, the pre-IND meetings are absolutely essential to get regulatory guidance. One of the great things about the U.S. and Europe is that the regulatory authorities are willing to give pre-IND guidance to startups and small companies. I think that's recognized now as part of the U.S. environment, and the authorities have responded accordingly. It's also true in Europe.

TLSR: Do you find it difficult to get a company to drop an idea? Maybe the approach is not right. Maybe the idea is workable, but perhaps the market is not there. Maybe there are too many competitors. Do you find that entrepreneurs are often married to an idea and can't give it up?

DL: Absolutely. It's a huge point. There is a huge difference between something being scientifically meaningful and that something becoming a marketed product. That's what entrepreneurs often fail to see, particularly the academic-minded ones. A lot of my job is to bring in the practical side. I understand and get a big thrill from the science part, but it has to be translated. Without the translation from bench to bedside, the initial discovery is more or less meaningless. It will go into the journals, but it won't become anything that helps real people.

TLSR: It seems to me that neurodegenerative disease, especially Alzheimer's disease and Parkinson's, could be huge opportunities for investors. If you throw in the cognitive issues that accompany normal aging, you have a market approaching that of oncology and cardiovascular disease. Do you see neurodegenerative disease as an untapped market?

DL: The answer is that it is definitely huge, huge, huge. The market risk is not the problem in neuroscience R&D. Numbers of patients are increasing because most neurodegenerative conditions are age-related, and we are, thankfully, living longer. De facto, the incidence and prevalence of neurodegenerative conditions will continue.

In addition, new indications are being realized within the neurodegenerative space. For instance, one of the things that Gerald Commissiong and I have been working on is traumatic brain injury and, as a subset of traumatic brain injury, concussion. There is a lot of interest in sports injury-related concussion, and we're looking into that in a very big way. If you look at the World Health Organization's statistics, you will see that there is a huge and growing global problem with head injuries and that concussions may increase the likelihood of neurodegenerative diseases later in life.

TLSR: Given that the neurodegenerative disease market is so large, what have been the stumbling blocks in developing solutions?

DL: The reason we haven't progressed in the field is the complexity and diversity of these conditions. We are still not quite clear on the underlying etiology of these diseases, and if we're not clear on the cause, we can't target meaningful therapeutics or even diagnostics, which should be easier to tackle. That is the main stumbling block. I would mention, however, that there has been a massive scientific effort globally, led by the U.S. and Europe. Japan is close behind, and its progress is pretty impressive.

TLSR: What about preclinical disease models? In oncology you can measure tumor regression in animal models, but cognitive disorders are more difficult in the preclinical setting. It's hard to test a mouse to see if it remembers. Aren't preclinical models inadequate in these cognitive diseases?

DL: To some extent, yes. My mantra in the realm of investigating cognition and cognitive therapeutics is to do animal work that addresses a few domains of cognition—working memory, attention, executive function (planning and organizing a task based on prior experiences), spatial memory and so on. Don't overdo it. Then take the therapeutic molecule into humans as quickly as possible and run proof-of-concept trials, even in Phase 1b. You can do ascending multiple-dose studies in Phase 1 human trials, with actual patients. Young, healthy male and female volunteers are not the right test subjects, particularly when dealing with age-related diseases. Regulatory authorities are recognizing the value of this now.

TLSR: Do you see any surrogate endpoints that might translate from preclinical models to clinical usefulness? For example, Amarantus' lymphocyte proliferation test, LymPro, a diagnostic blood test, is currently in a Phase 2 validation study for Alzheimer's disease. Could that be a surrogate endpoint potentially?

DL: Absolutely. The cell cycle hypothesis of Alzheimer's disease is an exciting, breaking story. Some key investigators—one being David Holtzman at Washington University School of Medicine in St. Louis—are digging into this. It's slow to be accepted because it breaks the dogma that neurons are essentially postmitotic (no longer capable of producing two new nuclei in cell division). But we think something is going on in this respect. The phenomenon is reflected in the peripheral blood lymphocyte population, which may be a surrogate for neuronal activity. The LymPro test is based on this.

This line of research also suggests that other biomarkers or surrogate markers for drug activity in the peripheral blood could potentially be useful endpoint measurements in clinical trials. A lot of effort is being put into looking at this. We know that biomarkers can be used in cerebrospinal fluid, which makes perfect sense because of the fluid's proximity to brain and spinal cord neurons expressing certain factors.

The other aspect is imaging. There has been a lot of progress in amyloid imaging in Alzheimer's, and major progress with tau imaging in the Parkinson's field. I was on the phone in early March with the Michael J. Fox Foundation for Parkinson's Research (MJFF), which has an alpha-synuclein imaging drive going on. Many key players, as we're learning in neurodegenerative pathways, have the possibility of being imaged directly in the brain.

What you have is a compound that's marked, perhaps with fluorine or carbon radioisotopes, and you can see an image of the compound in the brain using various machines. Together with plasma biomarkers, such as those LymPro is measuring, we could get a composite picture and pattern of the individual patient's status. That's a huge breakthrough in terms of getting control of the disease earlier. The earlier you treat, the more likely a better prognosis.

TLSR: It appears that these beta-amyloid, tau and alpha-synuclein imaging studies are going to be more diagnostic, and less capable of being biomarkers in disease regression. We're not going to see protein concentrations or plaques in the brain shrink in response to drug therapy any time soon, are we?

DL: Well, maybe. As progress continues with the antibodies, vaccines and other therapies now being studied in the preclinical phase, things could change. In fact, a study of the first tau vaccine recently started in Finland. We're waiting to see what happens there. Tau imaging is going to be on the scene soon. If you have a tau imaging system, and a tau vaccine, tau antibody or other compound against tau, you're definitely going for that mechanism.

TLSR: It strikes me that it's very difficult to get investors interested in neurological disease. They think of it as hopeless, and therefore a bad bet. Their capital might be useful elsewhere, such as in a cancer or cardiovascular trial, where they might get definitive results in a year or so. How do you feel about that? Is it frustrating?

DL: The phenomenon that you've described is definitely real, and I understand it. I mean, we all have different things we can do with our investment portfolios. We think in terms of big pharma being able to handle the big expenses, the risk and that 12-year product-development life cycle. That is, indeed, a very important part of the whole biotech/pharma community. From the investor point of view, that's the reason for the shift to orphan diseases. While orphan therapies target smaller markets, the pricing is pretty good and, perhaps most important, three or four years of development time can be shaved off. Regulators in all jurisdictions are open to this.

I've seen some IND filings for orphan diseases in the neuro space in the last two years, and while the regulatory authorities have remained scientifically focused, they move things forward and are not demanding packages that they might otherwise want to see in broader indications. Compassionate use—or expanded access, as it is now called—is another point. All of that can decrease the time to market.

Just to continue with that thought, this is one reason Amarantus has been focusing on some orphan indications, such as retinitis pigmentosa (RP). Some pharmas, like Shire Plc ($SHPGY) (SHP:LSE), have led the pack in getting into orphans, and actually have orphan diseases as part of their internal portfolios. Because there are so many orphan diseases, the door is open for more partnering possibilities with small biotechs, and big pharmas hunger to in-license candidates for orphan diseases because of their shorter development cycles and favorable pricing. The large drug companies are well aware that if you get a drug onto market quickly for an orphan indication, you can then develop that drug in further applications for bigger disease markets, such as Parkinson's or Alzheimer's. In the case of Amarantus, it is in preclinical development with mesencephalic astrocyte-derived neurotrophic factor (MANF) in not only RP, an orphan indication, but also in Parkinson's, with some grant funding from the MJFF.

Circling back to your question, hopefully there are ways we can get investors more interested in the neuroscience space. I think the orphan disease route is a great strategy, one that's becoming more common. If investors begin to understand some of the drug development strategies, it could change perceptions about neurodegenerative disease.

TLSR: Please address the MANF program.

DL: We believe this molecule, MANF, is one of the jewels in the field. We're working hard to develop it in a commercially meaningful manner. We made an announcement on March 6 about exclusively in-licensing some IP from the University of Massachusetts (UMass) Amherst, for the use of both MANF and its sister molecule, conserved dopamine neurotrophic factor, to treat certain auditory indications. We discussed this idea with Dr. Lawrence Schwartz at UMass, and he was able to put some test systems together. We have one or two other indications for MANF, as well as the Amarantus' lead compound, eltoprazine, which is in the clinic. We're trying to come to a conclusion about where our money is best spent, looking at the parameters of cost, time and chance of success. There are several components to the decision matrix, but those are the essential three.

TLSR: Even though you are in Phase 2b with eltoprazine in both PD-LID and ADHD, it seems to me that you could get quicker results with MANF in RP. First, there's no learning curve for the ophthalmologist, and second and most important, visual acuity would be a very measurable endpoint.

DL: That's right: An RP study wouldn't be about some airy question, such as how do you feel today? It would be a definite ophthalmological readout. You couldn't argue with it.

TLSR: My understanding is that Amarantus is going to complete its Phase 2 validation study supporting a Clinical Laboratory Improvement Amendments launch of LymPro. It will submit that package of data sometime in H2/14. Is the company still on track for a launch of LymPro by the end of this year?

DL: Absolutely. I don't see any reason why not.

TLSR: Could LymPro revenues then fund development of the therapeutics in the pipeline?

DL: It could, yes. That's overall the plan, and is being presented to the board of directors. My role with Amarantus is to acid test the proposals being made, and I'm quite confident the launch timeline is realistic. Of course, when you're doing science, things happen to slow you down. But we've been very careful in selecting providers that we believe will deliver on time.

TLSR: Amarantus is volatile because it is a micro cap, but it's interesting to note that over the past 12 weeks, this stock is up nearly 80%. Do you know why the stock has performed so well recently?

DL: There are three elements. One is LymPro and its potential progress to the next level, which will make it more attractive as a partnering opportunity for big pharma. There are various discussions going on now, but one of the breakthroughs was getting into the Johnson & Johnson ($JNJ) incubator in San Francisco, where we are now headquartered.

The second issue is the progress we've made with MANF. We basically came up with this orphan strategy in RP and implemented that in some key collaborative efforts with top-flight universities. The eye work is being done at the University of Miami's Bascom Palmer Eye Institute, which is probably the world's No. 1 institute in ophthalmology.

The third reason for this kind of interest in the stock is the progress and stability of the eltoprazine project. Those are the three main drivers.

TLSR: Were there some other companies with interesting technologies in the neuro space that you wanted to mention?

DL: Yes. Acorda Therapeutics Inc. ($ACOR) is an example of the point I made about corporate culture. Ron Cohen, the CEO at Acorda, has done a fantastic job of taking compounds and getting them developed, repurposed and reinvented using a new clinical scale through negotiations with U.S. Food and Drug Administration (FDA). It's all been based on solid science and corporate execution. The company has done a brilliant job of changing the landscape in multiple sclerosis and spinal trauma.

Another favorite is Acadia Pharmaceuticals Inc. ($ACAD), which is an interesting, almost-went-down-the-tubes name. Again, due to CEO Uli Hacksell's tenacity, not throwing in the towel, the clinical aspects of Acadia's compound pimavanserin got sorted out, and then the company executed trials in a very crisp manner and delivered positive data. The rest is history. You saw the results in the stock price as well.

TLSR: Acadia has to be the turnaround story of 2013, wouldn't you agree?

DL: I think so, yes. As a neuroscientist with investment experience, in the end I'm looking for that stock price, which happens to be a boiled-down reflection of tens if not hundreds of components of corporate culture. All of these executed events have meshed in a machinelike manner, but it can't be a machine because these are human beings. The corporate culture at Acadia has kept the machine running.

TLSR: Acadia has its pimavanserin product in a Phase 3 study for Parkinson's disease psychosis. It's a multicenter study with 500 patients, and is open-label and single-arm. Can an open-label, single-arm trial actually be pivotal?

DL: Yes, I think it can.

TLSR: David, Acadia has an ongoing Phase 2 trial using pimavanserin in Alzheimer's psychosis, and years ago it completed a trial with that same drug as a cotherapy in schizophrenia. This product could be useful in psychosis arising from both Alzheimer's and Parkinson's.

DL: These illnesses often involve, and result in, what we have classically called psychiatric conditions—psychosis, depression and so on. We're now recognizing them as a very important part of the disease phenotype in Alzheimer's and Parkinson's. In Parkinson's disease, the first things people start reporting are sleep and slight memory problems, not necessarily motor impairment. The famous Alzheimer's trialist Jeffrey Cummings gave a really good overview of this topic at a recent Alzheimer's clinical trial meeting in San Diego, where he went through the psychiatric sequelae of Alzheimer's disease. It has opened up another subset of conditions that can be tackled by compounds, as we are now seeing with Acadia. I think the pharmas have bought into this idea as well.

TLSR: David, based on all that you've seen in your 35 years in and around industry, can you identify the single best characteristic of a company that will become a successful life sciences business?

DL: That's very easy to answer. It's the scientific content. If you have excellent scientific content and you don't mess it up with some kind of goofy management behavior, then I think you can be successful. You want disciplined science, not maverick science. A lot of biotechs end up doing maverick science that just won't translate. The other important piece is to bring on board some development experience and expertise. I'm a great believer in corporate culture being a real important driver; it's probably the most important driver.

TLSR: David, thank you.

DL: Thank you very much for the discussion.

Dr. David A. Lowe is president and CEO of NeuroAssets Sarl, a Swiss-based neuroscience-focused consulting firm providing advisory services to pharmaceutical, venture capital and biotechnology companies throughout the world. Lowe previously served as the chief scientific officer of PsychoGenics Inc., and before that as director and chief scientific officer of Memory Pharmaceuticals Corp., a biotechnology company pursuing innovative treatments for Alzheimer's disease and schizophrenia. Prior to Memory Pharmaceuticals, Lowe served as the executive vice president and chief scientific officer at Fidelity Biosciences Group, Fidelity Investments, in Boston, an investment firm focused on the healthcare industry. He also served as president, CEO and director of EnVivo Pharmaceuticals, a Fidelity-funded pharmaceutical company pursuing new treatments for Alzheimer's disease. Lowe has also served as vice president and therapeutic area head, central nervous system (CNS), at Roche Pharmaceuticals, vice president and global therapeutic area head (CNS), at Bayer AG, and head of CNS biology, as well as deputy head of CNS research at Sandoz (now Novartis). He received his PhD in neurobiology from the University of Leeds, UK.

Source: George S. Mack of The Life Sciences Report (3/26/14)Want to read more Life Sciences Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Streetwise Interviews page.

1) George S. Mack conducted this interview for The Life Sciences Report and provides services to The Life Sciences Report as an independent contractor. He or his family own shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of The Life Sciences Report:Amarantus BioScience Holdings Inc. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.
3) David Lowe: I or my family own shares of the following companies mentioned in this interview: None. I personally am or my family is paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: Amarantus BioScience Holdings Inc. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
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