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Alzheimer's Disease

An Alzheimer’s IPO, Because Why Not

Now here’s someone with optimism to burn, compost, and scatter to the winds. According to FierceBiotech, Vivek Ramaswamy has started a company called Axovant Pharmaceuticals, and their asset is a 5-HT6 antagonist from GSK. It goes back to the SmithKline days, when it was known as SB742457. It was in development for Alzheimer’s, apparently going through at least five clinical trials of one sort or another (Phase I and II), before being shelved in 2012.
Ramaswamy picked it up for $5 million up front, with various payments back to GSK for milestones if it can get approved. But those are picayune – $35 million for US approval, for example. If Axovant can actually get a compound on the market for Alzheimer’s, they’ll make $35 million in the first twenty minutes. But as the Ephors of Sparta said to Phillip II. . .”If”. Phase III is where Alzheimer’s compounds have traditionally gone to die, and it’s an expensive death indeed, given the size and length of the trial.
Axovant, for its part, has already filed for an IPO, valued at about $172 million. Optimism indeed, and a comment on the current state of the IPO market. It will be a matter of interest to see how this flies when the time comes. . .

31 comments on “An Alzheimer’s IPO, Because Why Not”

  1. nitrosonium says:

    oh great! flush with all that cash (milestones, of course), GSK should re-populate RTP……right?

  2. Anonymous says:

    SB742457 was shelved for mediocre efficacy, no better than donepezil. This is very likely just an attempt to separate foolish VCs from their money, and then run with said money. If Vivek Ramaswamy actually believes he will get this drug to market, I have some Phase I assets to sell him.

  3. annon 2 says:

    Well, since GSK closed their Neruscence group in the UK a few years ago in favor of China, and we know how well that went, this might be as good as it can get for them.

  4. hypnos says:

    Well, that may be a long shot, but at least it’s a decent-looking compound that has already shown (at least) *something* in a clinical setting. I’ve seen worse. If its a cognition enhancer (instead of disease-modifying), it might even be amenable to a relatively short-running phase III study.

  5. biotechtoreador says:

    No brainer of a bargain!
    Why, even a 10% chance at annual sales of 10% of a $20B market potential for 5 years at a disc rate of 15% gives this an nPV of close to $400 million.
    How hard could it be to make an AD drug?

  6. Anonymous says:

    Such incremental improvements are the riskiest programs of all, because if you’re gonna fail, you’re gonna fail very late after spending a lot more cash.
    Why is it basic math skills and common sense go out the window as the numbers get bigger?

  7. Magrinho says:

    Why the cynicism?
    The CEO is a 29-year old lawyer – this is going to work! Enough of the old, failed approaches. Where can I send my check?

  8. GreyMouser says:

    Great comments, but my hat (or Classical Spartan Helm, in this case) is tipped Derek-ward for the Ephors quote. Good show!

  9. NoDrugsNoJobs says:

    It would be meaningful if it had added enhancement together on top of donezapil

  10. Drug Developer says:

    They may be a little late to the “5-HT6 in Alzheimer’s” party:
    Looks like symptomatic benefit, not disease modification.

  11. enzgrrl says:

    Once again I came for chemistry and found the liberal arts as well. Thank you, thank you, for enriching my day!

  12. Anonymous says:

    If you could buy a load of crap for $5 million and flog it the next day to naive “investors” (who, by the way are just as keen to make a quick easy buck) for $172 million, then wouldn’t you? A fool and his money are soon parted…

  13. petros says:

    What will a single phase III AD trial cost. 1000 patients 2 year study?

  14. biotechtoreador says:

    “What will a single phase III AD trial cost. 1000 patients 2 year study?”
    It cost MDVN ~$100 mill for its 2 (combined 1200) studies of its antihistamine to tread AD. Mind you, post 2008 PFE paid 1/2 after giving MDVN a $225 mill upfront for the “drug”.
    Really win/win: MDVN and PFE execs got their bonuses for signing the deal, and swift-trading MDVN shareholders did pretty well.
    I’m actually surprised no one has tried to revive this. I mean, even at a 5% POS it has an NPV of $200 million easily…..

  15. Anonymous says:

    5% PoS? Dream on! Maybe you’re thinking about the “average” new drug. Here we’re talking about AD, with 0% success rate (beyond Donepezil) to date.

  16. biotechtoreador says:

    “5% PoS? Dream on!”
    To be fair, in this case I think PoS is closer to 100%, but I do not assume that S stands for ‘success’…..

  17. Anonymous says:

    Probability of Scam

  18. watcher says:

    Is GSK really this desperate?

  19. Anonymous says:


  20. Anonymous says:

    I don’t understand how this makes GSK look desperate. Didn’t they just get good money for something they thought was worthless?

  21. johnnyboy says:

    Now if they only could do the same with their SIRT-1 compound, they might recoup of few hundredths of what they wasted on Sirtris…

  22. watcher says:

    What Sirt-1 compound? There isn’t a selective Sirt-1 compound at GSK to sell.

  23. PUI Prof says:

    Like @8 and @11, I got a dopamine rush from the Ephors reference. I read a lot, but this blog makes me realize how much ground I don’t cover.
    Great comments too on the cost and size of a good trial, etc.

  24. Anonymous BMS Researcher says:

    I visualize investors falling down a bottomless well as a voice above them shouts “THIS is Alzheimer’s Research!”

  25. RTP Lab Rat says:

    If GSK re-populates RTP it won’t be with scientists, because they plan to gut the lab buildings and construct “smart” (open) office spaces in their place. In essence “burning their ships” in order to show commitment to “we’d rather license in drugs than discover them”.

  26. Hap says:

    …”burning their ships” in order to show commitment to “we’d rather license in drugs than discover them”.

    I think you meant “burning our ships to show commitment to paying upper management and VC investors with our shareholders’ money instead of trying to find and develop drugs.”
    If GSK can get money from this, good for them, though. I’m not sure why anyone’s going to give up $200M to develop it further, but I don’t have that kind of money and can’t understand the decision process involved with it.

  27. Anonymous says:

    “we’d rather license in drugs than discover them”
    I wish pharma execs would understand that their problem is not a lack of new drugs, as they can always buy or license these in at fair value (or more, when supply is limited as it is).
    No, Pharma’s problem is the lack of a viable business model that creates value with innovation.

  28. Mfernflower says:

    Always a bit skeptical of naphthalene/quinoline cores in drugs that need to be taken for a long time. *But maybe that’s just me. I’m not really a professional by any means, I just read this blog because I find organic chemistry really fascinating!

  29. biotechtoreador says:

    Looks like this will be one heck of an IPO. Per latest S1-A (6/1/15):
    “Entities affiliated with Visium Asset Management, LP and RA Capital Management, LLC have indicated an interest in purchasing up to an aggregate of approximately $150.0 million of our common shares in this offering at the initial public offering price.”

  30. biotechtoreador says:

    And with 4 major and 1 bulge IB about to get paid millions for this, expect 5 BUY ratings 25 days after the IPO…..
    Not bad for $5 million.

  31. biotechtoreador says:

    fromS-1: “amily Relationships
    Geetha Ramaswamy, an employee of Axovant Sciences, Inc. and a former consultant to Roivant Sciences, Inc., is the mother of Vivek Ramaswamy, our principal executive officer, a member of our board of directors, the Chief Executive Officer of Axovant Sciences, Inc. and the President and Chief Executive Officer of Roivant Sciences, Inc. Shankar Ramaswamy, an employee of Axovant Sciences, Inc. and a former employee of Roivant Sciences, Inc., is the brother of Vivek Ramaswamy.
    In March 2015, Geetha Ramaswamy was granted a stock option for 262,500 common shares and Shankar Ramaswamy was granted a stock option for 750,000 common shares, in each case, with an exercise price of $0.90 per share. Each option vests over a period of four years, with 25% of the common shares underlying the option vesting on the first anniversary of the option grant date and the remainder vesting in twelve equal quarterly installments thereafter. Each option allows for early exercise, subject to our repurchase option with respect to any unvested common shares in accordance with the terms our standard form of early exercise stock purchase agreement. All common shares underlying each option will become fully vested upon a change in control, as defined in our 2015 Equity Incentive Plan.”

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