Actinogen Medical — XanaCIDD study in MDD now underway

Actinogen Medical (ASX: ACW)

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Research: Healthcare

Actinogen Medical — XanaCIDD study in MDD now underway

Actinogen announced that the first patient was randomised and treated in its XanaCIDD Phase II study in major depressive disorder (MDD) assessing the effects of lead candidate Xanamem on cognitive performance and depression. The study aims to enrol about 160 patients who have persistent depressive symptoms and cognitive impairment (CI) despite taking standard-of-care (SoC) anti-depression therapy. Having demonstrated the ability to improve cognition in two trials (XanaHES and the Phase Ib portion of XanaMIA) in healthy adults, Actinogen is confident that Xanamem can exert similar cognitive improvement effects in MDD patients; this study will also explore whether the drug can have effects on depression as well. Results are expected in late 2023 or early 2024.

Written by

Pooya Hemami

Analyst - Healthcare

Healthcare

Actinogen Medical

XanaCIDD study in MDD now underway

Clinical study update

Pharma and biotech

9 December 2022

Price

A$0.112

Market cap

A$207m

Net cash (A$m) at 30 September 2022 (excluding A$4.2m tax rebate received in October 2022)

13.0

Shares in issue

1,797m

Free float

90%

Code

ACW

Primary exchange

ASX

Secondary exchange

N/A

Share price performance

Business description

Actinogen Medical is an ASX-listed Australian biotech developing its lead asset Xanamem, a specific and selective 11β-HSD1 inhibitor designed to treat cognitive impairment (CI) that occurs in chronic neurodegenerative and neuropsychiatric diseases. Currently, Actinogen is targeting CI in two indications: the early stages of Alzheimer’s disease and major depressive disorder.

Analysts

Pooya Hemami OD MBA CFA

+44 (0)20 3077 5700

Soo Romanoff

+44 (0)20 3077 5700

Actinogen Medical is a research client of Edison Investment Research Limited

Actinogen announced that the first patient was randomised and treated in its XanaCIDD Phase II study in major depressive disorder (MDD) assessing the effects of lead candidate Xanamem on cognitive performance and depression. The study aims to enrol about 160 patients who have persistent depressive symptoms and cognitive impairment (CI) despite taking standard-of-care (SoC) anti-depression therapy. Having demonstrated the ability to improve cognition in two trials (XanaHES and the Phase Ib portion of XanaMIA) in healthy adults, Actinogen is confident that Xanamem can exert similar cognitive improvement effects in MDD patients; this study will also explore whether the drug can have effects on depression as well. Results are expected in late 2023 or early 2024.

Year end

Revenue (A$m)

PBT**

(A$m)

EPS**
(A$)

DPS
(A$)

P/E
(x)

Yield
(%)

06/21

2.0

(3.3)

(0.002)

0.0

N/A

N/A

06/22

3.6

(7.9)

(0.005)

0.0

N/A

N/A

06/23e

3.6

(8.7)

(0.005)

0.0

N/A

N/A

06/24e

3.3

(38.7)

(0.022)

0.0

N/A

N/A

Note: *Revenues include tax rebates and financial interest (local GAAP). **PBT and EPS are normalised, excluding amortisation of acquired intangibles and exceptional items.

The XanaCIDD Phase II Depression study is a six-week proof-of-concept, placebo-controlled, parallel group design trial aiming to enrol c 160 patients with persistent MDD and CI despite taking SoC anti-depressant therapy. Xanamem 10mg daily or placebo will be added to patients’ existing anti-depressant therapy and effects on cognition (using the Cogstate Cognitive Test Battery) and depression (using the Montgomery Asberg Depression Rating Scale) will be evaluated.

MDD is a common disorder, with a c 5% prevalence globally. CI is a feature in most MDD patients and commonly persists even when depression symptoms subside. Elevated cortisol levels have been associated with depression and modification of brain cell cortisol levels has been proposed as a strategy to treat both depression and its associated CI. As Xanamem targets excess brain cortisol, and given the benefits shown in healthy adults in XanaHES and the Phase Ib portion of XanaMIA, we believe it is plausible for cognitive benefits to be shown in patients with persistent MDD. If the XanaCIDD study is successful in showing CI improvement, the company may then move to advance it into pivotal studies. Given that no US-approved antidepressant has a CI label, we believe there is a significant opportunity for Xanamem in this market if it can demonstrate an improvement in CI in this population.

Actinogen reported a gross cash position of A$13.0m at 30 September (excluding a A$4.2m R&D tax rebate received on 20 October 2022), and a Q123 operating cash burn rate of A$3.4m. We continue to model the company will raise A$20m in FY23 and A$40m in FY24. As a reminder the Phase IIb portion of the XanaMIA study is expected to start enrolment in H1 CY23 and is designed to demonstrate the safety and efficacy of Xanamem in a population of patients with mild cognitive impairment and mild Alzheimer’s disease (AD) who at baseline will have been confirmed as biomarker-positive for AD (as determined through elevated blood pTau).

General disclaimer and copyright

This report has been commissioned by Actinogen Medical and prepared and issued by Edison, in consideration of a fee payable by Actinogen Medical. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

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London, WC1V 7EE

United Kingdom

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United States of America

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Actinogen Medical and prepared and issued by Edison, in consideration of a fee payable by Actinogen Medical. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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