Alterity (ATH) - Phase 2 in MSA reporting in Jan/Feb 2025

ATH will report a 77 patient, Phase 2, double blinded, clinical study (ATH434-201) in the relatively unknown Multiple System Atrophy ("MSA") in late January or early February 2025.  This is a massive inflection point for investors, with a sub 10% probability of success being priced into the share price in my opinion.  While I don't believe there is a 50% chance of success, any success could be very rewarding for investors, as clinical progress in MSA opens up Parkinsons which is a big end market.  

MSA is a Parkinsons like disease with life expectancy of 7.5 years from the date symptoms are first noticed and like many neurological diseases can sometimes take years to diagnose.   

This 12-month study has 3 arms: 75 mg ATH434, 50 mg ATH434 and Placebo, with both the 75 mg and 50 mg dose expected to be efficacious.  ATH should have around 50 patients on drug to compare against 25 patients on placebo, so a reasonable amount of data on whether this drug is having an effect or not.  

The primary endpoints include iron deposition in the centre of the brain, a fluid biomarker ("NfL"), as well as movement analysis and an MSA rating scale (UMSARS: Unified MSA Rating Scale).   There are 12 symptoms measured in UMSARS could ultimately individually become endpoints so not achieving primary end point but showing benefit in some of symptoms may ultimately allow the company to continue in the clinic to Phase 3.  The Phase 3 clinical study could cost circa $30 to $40M USD, so manageable if the company generates promising data in January 2025..   

In layman terms ATH-434 inhibits and distributes iron from the centre of the brain.  Its believed excess iron deposition and its oxidation plays a pivotal role in Parkinsons and MSA disease progression, so the inhibition and redistribution of iron may help stop/reduce or rescue brain function.  The company are targeting the earlier stage of MSA as the cascade of damage in latter stage disease means little can be achieved is permanently damaged brain regions/cells.

ATH has a small but quality US focussed management team, whom have been very thoughtful around clinical design.  The earlier stage MSA focus of study ATH434-201 looks smart as does the natural history study of MSA being run over the last 4 years, given the limited understanding of the disease.

Investors are valuing the company at a miserable $25M AUD so any hit on the primary end points or secondary end points could be very positive for shareholders.    

MSA is a rare disease, with circa 50K US suffers, where there are no effective treatments.  ATH-434 is a twice a day oral treatment, with the company estimating has peak US sales of $1.1B USD.  

The supporting evidence to date includes improvements in monkey behaviour and function from 3 monkeys implanted with an experimental Parkinsons disease plus ATH434, while the 2 monkeys with-out ATH434 went sideway/backwards.  The 3 monkeys brain iron levels encouraging all declined, while the important brain volume measure was stable.   For what its worth mouse data was also supportive in function and iron deposit stability.  

The 6 month interim results from study ATH434-202 in 10 patients with advanced MSA earlier in 2024, showed 3 patients with stable or improved neurological symptoms.  The 3 responders showed stable iron and brain volumes.  The study showed 2.7% increase in neuronal injury (biomarker = NfL) compared to an expected 18% in untreated patients seen in the companies natural history study of 21 patients.  This study in latter stage MSA is expected to report in the first half 2025, but the main game is the earlier stage clinical study reporting in Jan 2025.

The company has done a natural history Study of 21 MSA patients because the disease is relatively unresearched.  The study demonstrated a significant increase of iron in the brain area of 'Substantia nigra' (centre of brain) over 12 months.  The study also showed a significant decrease in brain volume over 12 months. The combination of any therapy that can at least stabilize iron volume and brain volume, in combination with some functional benefit vs control could be a game changer.