AC Immune announced a $80M ATM with Jeffries yesterday. With $280M in cash, good to last for at least 24 months, we do not think ACIU will actually tap the ATM. Instead, the likelier scenario is that the company is preparing potential financing options with their big Phase 2 catalyst imminent.
Semorinemab, an anti-Tau antibody partnered with Genentech, will report Phase 2 in prodromal/mild Alzheimer’s Disease. This will be the first Phase 2 readout of an anti-Tau antibody in AD. The Phase 2 trial, called TAURIEL, enrolled 457 patients who received one of three active doses or placebo for 72 weeks.
Primary endpoints will include safety and the change from baseline in functional and cognitive performance. Importantly, the study will also track change from baseline in tau. Remember, tau is a protein that accumulates inside the brain, and is thought to be a sign of Alzheimer’s disease. Clearing tau from the brain is the basis behind the tau approach to Alzheimer’s and ACIU’s objective for this study.
The trial was completed in Q2 2020 and top line data is expected to be announced by Genentech in 2H 2020.
The trial is large and long enough (1.5 years+) to generate signals of efficacy. The more difficult measure will be whether the study was sufficiently powered to hit statistical significance. We will be focusing on tau reduction in the brain, and whether there is a statistical significance between the active and placebo arms.
Keep in mind that all AD treatments to date, including Biogen’s aducanumab, have failed to show any clear cut efficacy. This makes ACIU’s upcoming results risky. However, positive signs of efficacy can be a game changer for AD, ACIU and the tau thesis.
In addition to the semorinemab Phase 2 data, ACIU will also be reporting 3 other early data readouts by the end of 2020:
- ACI-24, anti-Amyloid beta vaccine, reporting Phase 1b in AD-Down syndrome.
- ACI-3024, a small molecule Tau inhibitor partnered with Eli Lilly, will report Phase 1 results. Data will be disclosed at discretion of Eli Lilly.
- ACI-24 will report interim 12-month Phase 2 data in AD
ACIU is trading at a market cap of $600M, with $280M in cash. With a $320M EV and a catalyst filled couple of months, we think downside is cash at approx.. $3.80/share (53%). If Phase 2 data with Genentech hits, ACIU can easily justify a $1.5B valuation, or approximately $20/share (150%).
PropThink contributors are LONG ACIU
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