DUBLIN – Alzecure Pharma AB is set to become the latest biotech firm to join the ranks of listed companies in Sweden. The Huddinge-based company last week priced an IPO on the First North Premier exchange at SEK14 (US$1.54) per share. The offer, which comprises about 14.3 million shares, will raise SEK200 million and value the firm at about SEK500 million. It has already received advance commitments covering 77 percent of the base offering. Should demand for shares exceed supply, the company has also put in place an extension option, which would raise another SEK50 million.

Alzecure has already raised SEK110 million across two private funding rounds. It was established in November 2016, but the company's story has a lengthy prequel. Its five founders – Johan Sandin, Gunnar Nordvall, Pontus Forsell, Johan Lundkvist and Magnus Halldin – are all veteran drug developers who worked at Astrazeneca plc's CNS research facility in Sodertalje, southwest of Stockholm, prior to its shutdown in 2012.

"We sensed that we had some really good ideas that we wanted to pursue," Alzecure CEO Sandin told BioWorld. The group initially formed a not-for-profit, Alzecure Foundation, which received support from the Swedish Alzheimer's Foundation, with the aim of retaining the group's skills within the country. Bengt Winblad, a noted Alzheimer's scientist at the Karolinska Institute, came on board as an advisor. The foundation, Sandin said, acts as an industry-standard incubator for developing and pressure testing early product ideas before spinning them out into commercial entities.

Alzecure has two main platforms. Neurorestore is focused on symptomatic treatments for Alzheimer's and other CNS disorders in which cognitive function is compromised. Alzstatin is focused on disease-modifying therapies that interrupt the pathological cascade in Alzheimer's. Within the former strand, a lead compound, ACD-855, is due to enter phase I development before year-end, subject to final approval from the Swedish Medical Products Agency. The drug stimulates nerve growth factor (NGF) and brain-derived neurotrophic factor (BDNF) signaling through positive allosteric modulation of their respective receptors, Trk A and Trk B.

Both pathways contribute to brain plasticity – the organ's ability to repair damaged pathways – by enabling neuronal function, communication and survival. The val66met polymorphism in the gene encoding BDNF is associated with severe and accelerated cognitive decline in Alzheimer's patients, even though the phenotype in individuals without Alzheimer's does not exhibit any obvious effects. BDNF reduction is also implicated in cognitive problems arising from other conditions, including Parkinson's disease, sleep disorders and traumatic brain injury.

"This has the potential to have a broader indication profile than just Alzheimer's disease as such," Sandin said.

BDNF and NGF have both been the focus of various attempts to deliver the proteins directly as drugs or to encode them in gene therapy vectors, but there has not been much effort, Sandin said, to recapitulate their activities with small-molecule drugs.

Alzecure developed ACD-855 in-house, but it inherited its lead Alzstatin drug candidate, ACD-679, from Astrazeneca. The drug is a gamma-secretase modulator (GSM), a drug class with a subtly different mechanism from the ill-fated gamma-secretase inhibitor class, of which Eli Lilly and Co.'s semagacestat is the best known example. Semagacestat entered two pivotal phase III trials but each was halted early because patients on the drug experienced a worsening in their cognitive decline and a raised risk of developing skin cancers and infections.

Within the Alzheimer's pathology, gamma secretase, along with beta secretase, is responsible for processing amyloid precursor protein (APP) into amyloid beta, the aggregation and deposition of which is the classical hallmark of the disease. However, gamma secretase, a multiprotein complex, has multiple substrates, including the Notch receptor, and inhibiting Notch processing is thought to have given rise to the cancer risk.

GSMs such as ACD-679 are designed not to shut down APP processing completely, only to alter it so that it does not result in the production of "sticky" amyloid beta peptides. "It's not an inhibitor as such," Sandin said. The drug's action on gamma secretase gives rise to amyloid beta peptides of 37 and 38 amino acid residues, which are less prone to aggregation than the 42-amino-acid species that is generally associated with the Alzheimer's pathology. The other catalytic activities of gamma secretase complex are not affected.

Pfizer Inc., of New York, conducted several early stage trials of a similar compound, PF-06648671. Although it reported the drug to be safe and well-tolerated, it terminated development in January having decided to exit neurology. San Diego-based Neurogenetic Pharmaceuticals Inc. is in phase I trials with another GSM, NGP-555, which completed phase I trials in early 2017, with no apparent movement since then. Alzecure's program is some ways behind – it is entering formal preclinical development now, and will enter first-in-human studies at the end of 2020, Sandin said.

Trading in Alzecure shares is expected to start on Nov. 28, under the ticker ALZCUR.