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The biotech winning the age fight
Matthew Smith



Investors looking to play the anti-ageing theme might want to consider a look at duel ASX and NASDAQ-listed Prana Biotechnology.

The shareprice of the clinical-stage company jumped more than 50 per cent in a day at the end of October on the back of a peer reviewed article in the medical journal, Aging Cell, that showed the positive effect its compound has on neurogenesis and in reversing the memory and learning losses associated with the aeging process on mice.

During a visit to Australia for the AusBiotech conference in Melbourne recently, biotech analyst for boutique investment and brokerage firm MLV & Co, George Zavoico, who covers Prana in the United States, points to the Prana’s Phase II trial results early in the new-year as the next catalyst that could unlock value in the company.

Prana’s test drug, called PBT2, is currently the subject of the Phase II trial for Alzheimer’s and Huntington’s diseases, which both trials expected to report results in Q1 2014.

“The positive review now puts the trial results in the spotlight,” says Zavoico, who is employed by the research arm of a company which is also retained by Prana in an advisory capacity.

Like most small biotech companies listed on the ASX, Prana’s shareprice can swing significantly on news even remotely related to its drug trials. Prana’s shares sank more than 10 per cent in September when it informed the market that the statistical analysis results of its Huntington disease study – previously planned to be published this year – would be delayed until early next year.

The positive peer review bodes well for the potential for Prana to report solid Phase II trial results early next year, Zavoico says.

Australian clinical trials are often used as a pathway to commercialisation of drugs in Europe and the United States, and many biotech companies listed in Australia are at the early clinical stage.

According to industry group AusBiotech, there are currently 93 biotech companies listed on the ASX with a combined market capitalisation of around $52.3 billion.

New biotech listings have been slow this year. Regenerative medicine company Regeneus raised $10.5 million in an IPO in September, the first local biotech listing since US firm Osprey Medical listed on the ASX in May 2012.

The tightly held share register of Prana includes a greater than 5 per cent holding by Melbourne-based Jagen Investments, the fund that manages money on behalf of the Liberman Family Trust. The group will likely be anticipating the Phase II trial results early next year, having had their appetite whetted by the positive market reaction to the peer reviewed article.

Prana previously reported the positive effects of its trial compound on increasing neuronal number, synaptic density and up regulation of critical markers of synaptic function and plasticity in a transgenic animal model of Alzheimer’s disease, as well as significantly improved cognition in its Phase I results.

The recent paper, entitled “A Novel Approach To Rapidly Prevent Age-Related Cognitive Decline”, describes how the Prana trial compound reversed both memory and cognitive loss in normal old mice that have not been genetically modified.