Good morning, Armchair Army,
Welcome to today's edition of The Armchair Analyst, a 5-minute daily update on the ASX life-sciences sector.
Ever seen these beanies before?
They are FightMND's Big Freeze beanies.
Every dollar goes towards finding a cure for Motor Neurone Disease (MND).
The King’s Birthday AFL match is “The Big Freeze”, a charity event to raise money for MND.
(and my personal favourite fixture).
I’m a Pies supporter. My brother’s Dees…
Dad’s a Saints man.
Don’t ask.
FightMND is a charity started by Neale Daniher (former AFL footballer and coach of the Melbourne Demons) who was diagnosed with MND in 2013.
Over the next 13 years, Neale set out on a mission…
Cure MND.
A disease with remarkably few treatment options.
The best frontline drug is still a generic approved in 1995.
… Which extends median survival by about two to three months.
The other drug on the market (which does US$700 million in sales and was bought for US$2.5 billion in April) has a “benefit that is small to trivial”.
That’s it.
That’s the best we’ve got.
The disease has a median life expectancy of 27 months.
After diagnosis, Neale went on to live for 13 years.
I’ll never forget him saying on AFL360, “I’m hard to kill”.
He co-founded the charity FightMND and raised over $150 million.
Every year, hundreds of thousands of beanies are sold on King’s Birthday to raise money for the charity.
A sea of light blue at the MCG.
Through sheer force of will, Neale made Australia care about MND.
He had a dream.
That one day, FightMND wouldn't be needed anymore.
That researchers would have found a way to stop MND.
In 2020, FightMND gave the next company on my Biotech 165 Challenge $880,000 to test its drug in ALS (the most common form of MND).
Neurizon (ASX: NUZ).
Six years later, that drug is facing its biggest test yet.
A 250-patient Phase II/III trial RIGHT NOW that could bring Neale's dream one step closer.
MOST ALS drugs fail.
(It's a bloody hard disease to treat.)
…and there's every chance this one will, too.
But imagine if it doesn't.
For investors, a potentially huge market opportunity.
For people living with MND and their families, something far more important.
More time.
All because one man got dealt a terrible hand… and kept fighting on.
But first…
The Pulse Check
Proteomics International Laboratories (ASX: PIQ) will commence an Australian rollout of Promarker D and Promarker Eso blood tests through the Healius network. (PIQ)
🪑 Good job getting these products to market.
Tests will initially be private-pay ($495 and $997, respectively). I expect sales to start slowly, and time will tell whether the product and sales take off.
But the infrastructure is already in place. Which is the most important thing.
Doctor Care Anywhere (ASX: DOC) announces a strategic business model update under new CEO Laura O’Riordan. (DOC)
🪑 I haven’t had a chance to read the full document this morning, but I like these updates (and they could signal that the “bottom is in” for a company, like Starpharma when it announced its strategic reset and update in 2024).
Some weekend reading for me.
New independent data presented at Kidney Week suggest Dimerix’s (ASX: DXB) DMX-200 targets the right mechanism for FSGS. (DXB)
Resonance Health (ASX: RHT) requests a trading halt ahead of announcing results from its Liver Fibrosis clinical trial and a capital placement. (RHT)
🪑 👀
INOVIQ Limited (ASX: IIQ) announces CEO Dr Leearne Hinch's will step down effective 27 October 2026. (IIQ)
🪑 I do like Leearne, but something had to give after the botched clinical validation study.
Neurizon's drug started life in a paddock.
A sheep dewormer (yep, really) that showed promise as a cancer treatment.
Specifically, pet cancers.
(Which was the Neurizon story for the better part of a decade)
But it wasn't until FightMND gave the company an $880,000 grant in 2020 that the company’s trajectory changed for good.
The idea?
Test monepantel (NUZ-001) in ALS (the most common form of Motor Neurone Disease).
(Source: Neurizon, 2020)
So, a 12-patient Phase 1 trial began.
… and the results were good. Very good.
Primary goal: safety.
Tick.
All 12 patients completed the study; there were no dose-limiting toxicities and no treatment-related deaths.
Secondary endpoints: a signal.
Tick again.
Patients on NUZ-001 declined more slowly (0.48 points slower per month) when compared to the historical database of ALS patients.
This was NOT a placebo-controlled study.
The decline benefits were based on a predictive model from the largest public database of ALS clinical trial data.
So they found a signal.
Enough to take the drug to a larger, placebo-controlled trial.
Which is where Neurizon is now.
250 patients, fully recruited, readout in Q2 next year.
How does Neurizon’s drug work?
Motor neuron disease (ALS is the most common form) occurs when the motor neurons don’t function properly.
These neurons carry signals from the brain and spinal cord to the muscles.
When they die, the muscles stop getting the message…
So walking, talking, swallowing and eventually breathing stop.
(It’s a horrible disease)
In people with ALS, there are a bunch of misfolded proteins that aggregate in the motor neurons and cause the cells to die.
Neurizon’s drug, NUZ-001, activates the cell's natural trash-collection system to clear these protein clumps and keep cells alive longer.
That’s the theory anyways… based on several preclinical experiments.
Neurizon is fully recruited for a Phase II/III Trial: HEALEY
In 2024, NUZ-001 was selected for the HEALEY ALS Trial.
A "perpetual" platform trial run by a number of large ALS organisations in the US.
One master protocol, one set of sites, multiple drugs tested.
Cheaper trials, easier recruitment and all drugs sharing the same placebo group.
Several drugs in the trial have already completed testing.
ALL have failed.
Neurizon is the last one standing…
Recruitment finished within 5 months (remarkably fast), and topline results are due Q2 next year.
ALSO, because no good ALS drugs are on the market, a positive result in this trial could lead to Neurizon's early registration.
The FDA confirmed this in a Type C meeting earlier this month.
There are three scenarios:
BEAR CASE - The trial doesn’t meet the primary endpoint. Fail. Neurizon goes back to a pet cancer company.
BULL CASE - The trial shows some efficacy, but there isn't enough data to get registered in one shot. This moves Neurizon into the “partnering discussions” stage, where it will look for help to fund a larger Phase 3 trial.
MEGA BULL CASE - Drug is so good that it should be registered immediately.
Readout is Q2 next year.
The size of the prize
US$5 billion a year.
That’s the market opportunity in the US alone for a good ALS drug. (Source, NUZ page 7)
(That’s a conservative estimate in my eyes)
Investors talk about targeting a disease with an “unmet need”.
There is nothing good on the market for ALS.
Thirty years of research, and the BEST frontline drug for ALS is still a generic, Riluzole, which extends median survival by about two to three months.
… that’s the best out there.
Two to three months of extended survival.
Radicava generates US$700 million in global sales, and Shionogi bought it for US$2.5 billion late last year.
(Source: FiercePharma)
This is for a drug that Australia's national MND care guidelines say has a “benefit that is small to trivial”.
… And the drug is not registered in Europe.
(because of too low an efficacy signal).
The pipeline is thin too.
Relyvrio was approved by the FDA in 2022 on a Phase 2 study alone…
BUT, it was pulled less than two years later because the Phase 3 confirmatory trial failed.
In the multi-drug HEALEY trial, SEVEN other drugs failed.
NUZ-001 is the last one standing.
The US$5 billion ALS market feels like the 2002 Winter Olympics, and the $64 million Neurizon could be Steven Bradbury…
Last. One. Standing.
Let’s talk about Elanco for a second…
One key part of the Neurizon story is Elanco.
Elanco is a US$11 billion NYSE-listed company that sells animal health products.
… they are also Neurizon’s third-largest shareholder.
Elanco manufactures and sells monepantel as a sheep dewormer.
NUZ-001 is monepantel.
(a reformulated version for human use)
IMPORTANTLY, Neurizon has an exclusive global licence to Elanco's animal safety and manufacturing data on monepantel.
This matters for drug registration and for securing the IND.
AND…
Neurizon signed a 5-year supply and manufacturing agreement with Elanco that guarantees its supply of human-grade monepantel.
One of the biggest hurdles for late-stage drug companies is manufacturing.
It's a major cash drain and offers few catalysts.
Still…
Manufacturing is a major part of the registration process and critical to bringing a drug to market.
For Neurizon, this risk is largely addressed.
Thanks Elanco.
What could go wrong?
Clinical trial risk
This is a binary event.
ALS is an incredibly tough disease to get a drug approved in.
While there is a signal, this will be the first placebo-controlled test of NUZ-001 for ALS.
Twelve patients against a historical database is a longgggg way from 250 patients in a placebo-controlled trial.
Lots of drugs have failed for ALS. This is a big risk.
Convertible Notes
In February, Neurizon drew A$5 million from a convertible note facility with US fund Obsidian Global.
Obsidian can convert at a discount to recent trading prices.
In September, Neurizon repurchased 1M notes for US$1.15 million. 750K are still out there.
$15 million of the facility remains undrawn.
Neurizon could raise capital (and not use the notes)...
But this would be dilutive as well.
The company has $12 million in the bank (as of June 30) and is burning about $5 million a quarter.
So it’s either raise or draw down on the notes.
The Armchair Take
When I first took an interest in Neurizon, it was all about the FreezeMND.
I knew the story, and it helped me understand WHY.
(The human WHY)
... but as I dug deeper, I realised EXACTLY what this investment is.
(The financial WHY)
Neurizon is a super high-risk, super high-reward bet.
If Shionogi is willing to pay US$2.5 billion for an asset with what is classified as a “small to trivial” benefit…
Imagine what something worth a REAL DIFFERENCE would be worth.
(Hint, it’s a lot).
But it’s so hard to ignore the risks.
SEVEN companies on that HEALEY trial; all seven have failed.
Even Relyvrio, registered off a Phase 2 trial, had to be recalled.
That’s how tough this disease is.
But I can imagine the fairy-tale ending.
A sheep dewormer…
That slows ALS progression substantially…
All from an idea from a charity started by an AFL Coach who got real unlucky with a terrible disease.
It seems like a long shot…
But then again, so was Neale Daniher living with MND for 13 years… and convincing an entire country to raise $150 million for a disease most had barely heard of.
All by selling blue beanies.
Big thanks to Chairman Sergio Duchini and CFO Dan O'Connell for sharing the Neurizon story with me.
See you all next week,
The Armchair Analyst
What is an armchair pick?
An Armchair Pick is an invite-only spot I reserve for my highest-conviction investment ideas.
It's a paid arrangement, but to align myself, I only take my fee in shares - half escrowed for 6 months, half for 12.
It is general commentary only, not personal financial advice or a recommendation to buy, sell, or hold. Always see the disclosure at the top of the article and do your own research.
