Ann: Phase II Alzheimer's Disease Trial - results, page-87

Outlined below is a bit of a break down of what has happened, and what could happen in the future - both good and bad. I encourage all to add points or correct points.

I'll start with the bad.
- We have just pushed our progress back by 2-3 years
- Confidence may be lost in the cortisol hypothesis for many investors, for this reason, we may have a lot of trouble getting past 4c.
- If 20-30mg is unsafe in June, we are completely done.
- Cash could possibly be an issue, especially if we need to do longer trials, which I really hope that we do.

I am disappointed in the fact that the company didn't expand the data set when 30mg twice daily was declined by the FDA. There was a lot of concern surrounding the 10mg dose, as it was 50mg/day difference. The board insisted that 10mg was enough, which I naively believed, but it clearly wasn't when combined with the short time frame. playing it smart would have been spending the extra time and money back then, rather than scrambling to find funds for a failed trial.


I estimate, based on cash burn of previous quarters, keeping in mind that this quarter won't include Xanadu trial sites, that we may have `~9/8 million in the bank left at the end of June. at which point most of our trials will be completed, and we will be 2 months away from a rebate which could exceed 3 million, but I really am just estimating that based on last years rebate. The figure that we may be left with will be around $12 million. The cost of another phase 2 trial may be anywhere up to $15 million, which again, is an estimation based on Xanadu figures. I have over estimated. We will most likely need to secure an additional $5 mill or so from somewhere. (March options would have sorted that but anyway).

The possible redeeming outcomes

-Xanahes could show cognitive improvement and safety. keeping in mind the population which Xanahes targets are healthy elderly with chronically raised cortisol. This, in addition to the target occupancy studies, may be enough to be confident that xanamem will work at a higher dose.
- With an improved data set, they may find a pharma in the mood disorder market that is willing to run a phase 2 trial in parallel with either an AD phase 2 trial or a xanahes phase 2 trial. This doesn't seem likely and is determinant on what they find out about Xanadu.

I'm happy to hold for now, and wait to see what the plans are moving forward. I still believe the cortisol hypothesis to be accurate, and from what I have seen, Xanamem did what it was supposed to do in regards to lowering cortisol. The data from Xanadu is crucial. If they can prove that cortisol decreased, just not enough, then I believe that with the help of the target occupancy studies, we will know exactly what we will need to be successful.

Absolutely gutted that it has to be this way. Can't dwell though.