ProMIS, taking aim at Alzheimer’s, could have 900% upside

ProMIS Neurosciences, with a market capitalization of about $24 million on the Nasdaq, started out as a developer of mad cow disease tests but has since shifted focus to treating Alzheimer’s and other neurodegenerative diseases. Bloomberg has said this space offers some of the most promising investment opportunities.

The story of ProMIS Neurosciences began over 20 years ago in Canada. Initially called Amorfix Life Sciences, it was founded in 2004 by two University of Toronto researchers, Neil Cashman and Dr. Marty Lehto, to commercialize technology to detect misfolded proteins in the blood.

Proteins sometimes fail to fold into their normal configuration due to infections or aging, which could lead to an array of diseases, such as Creutzfeldt-Jakob disease, Alzheimer’s, Parkinson’s, and amyotrophic lateral sclerosis (ALS).

Existing tests struggle to detect misfolded proteins, as they are vastly outnumbered by normal proteins. Amorfix claimed its technology could solve this problem by modifying normal proteins while protecting the misfolded ones, making them easier to identify.

In its early years, Amorfix lacked a clear focus and worked across multiple therapeutic areas.

Its first development was a test to detect infectious proteins called prions — not in humans, but in sheep. An “infected” prion enters the human body through contaminated meat, accumulates in the brain, and ultimately leads to cell death and the onset of the fatal Creutzfeldt-Jakob disease. However, if livestock are tested, the infected animals can be isolated. The test could also be used to screen donated blood, as the disease can be transmitted through transfusions.

At the same time, Amorfix was developing tests to diagnose Alzheimer’s and transmissible spongiform encephalopathies (a group of diseases caused by prions), both of which are characterized by the presence of misfolded proteins in patients.

The National Research Council of Canada funded the development of the Alzheimer’s test, pledging up to CAD322 million through its Industrial Research Assistance Program, according to a 2007 company report. Additionally, the Ontario Genomics Institute invested CAD100,000 for a stake in Amorfix.

At the time, Alzheimer’s could only be definitively established during postmortem examinations, by looking for amyloid plaques — misfolded proteins — in the brain. Today, patients are typically diagnosed with Alzheimer’s if plaques are detected on CT or MRI scans, but no blood test for the disease exists yet.

Amorfix also pursued therapies for ALS, a progressive motor neuron disease that leads to paralysis. In 2006, pharmaceutical giant Biogen began sponsoring this research. It invested $750 million in stages through subscriptions for 1.2 million Amorfix shares, according to Amorfix financials.

In 2008, the company expanded into treating Alzheimer’s, exploring both a therapy and a vaccine. It secured a CAD227,500 grant from the Canadian Institutes of Health Research for the program and pledged to allocate an additional CAD540,000 of its own money.

The company also started to look into the role of misfolded proteins in cancer development. Amorfix ultimately aimed to develop vaccines and drugs that could target these proteins to prevent or treat certain types of cancer.

Everything changed in 2015 when Elliot Goldstein and Eugene Williams joined the company, Clinical Leader, an online industry resource, points out. Both men had experience working in pharmaceutical giants: Goldstein at Sandoz Pharmaceuticals (a division of Novartis), GSK, and British Biotech and Williams at Genzyme and Adheris. The latter, which Williams founded, became the leader in patient adherence, according to Fierce Biotech news. It helps patients follow doctors' prescriptions and take medications as directed.

At Amorfix, Goldstein took on the mantle of CEO, while Williams took over as chair of the board. The company now lists Williams among its founders, alongside Cashman.

What did the new leadership do? They decided to concentrate 95% of the company's resources and cash on finding an effective treatment for Alzheimer's disease. To underscore this new focus, they renamed the company ProMIS Neurosciences.

“When you have a stunning new technology, you find it can easily be applied to six or eight different diseases. Many companies are tempted to go after all of them,” Goldstein told Clinical Leader. “But, if you launch six different programs for one molecule, you end up moving them forward about a half inch at a time. That is not good for the company or for patients, and it is a model that is almost guaranteed to fail. Small companies only have enough resources to focus on one program.”

He compared this to having children. What if you want to have six children but can only afford to feed one? Do you underfeed all of them? Feed only one while the others starve? Or just have one child and make sure he or she is fed well?

“We decided to have one child, and that child is Alzheimer’s. When we get that one out of the house, we will worry about the next one,” Goldstein said.

The product that Goldstein poetically described is PMN310. Out of three existing types of amyloid proteins, it targets only the misfolded and most toxic ones, without affecting amyloid plaques. In contrast, existing therapies — Leqembi from Biogen, Japan’s Eisai, and Kisunla from Eli Lilly — target these plaques. ProMIS believes its approach can avoid the side effects associated with these other treatments, such as brain bleeding and swelling.

On February 25, ProMIS began testing PMN310 on people with Alzheimer's disease in an early-phase clinical trial. The study involves about 100 patients at stages III and IV of Alzheimer's — the most severe ones. Note that the existing therapies are only intended for early-stage patients. The company plans to reveal results in 2026.

ProMIS is still working on drugs for ALS, as well as multiple system atrophy, but these are in preclinical development and have not been tested on people yet. Research on an Alzheimer's vaccine — another ProMIS project — has yet to reach even that stage.

ProMIS went public in 2005, initially trading on the Toronto Stock Exchange (TSX) Venture Exchange before graduating to the main TSX. In 2017, it was listed on the OTCQB venture market in the U.S.

Five years later, in July 2022, the company moved to the Nasdaq Capital Market. The following year, it voluntarily delisted from the TSX to reduce costs associated with keeping a dual listing and improve liquidity for investors, as stated in a press release published on July 10, 2023.

Since then, ProMIS has lost more than 75% of its value. According to MarketWatch, it currently has two “buy” ratings and no “sells” from coverage analysts, with an average target price of $7 per share, 10 times the closing price yesterday, March 6.

In November last year, Insider Monkey spotlighted ProMIS as the most undervalued Canadian stock, stressing the company’s recently announced progress in advancing its Alzheimer's program. ProMIS reported that healthy volunteers had tolerated its PMN310 drug well without serious side effects, and the molecule demonstrated the ability to penetrate the central nervous system in necessary amounts. After that, the company moved to the next stage — clinical trials on Alzheimer’s patients. Insider Monkey also noted that the company's study is funded by prominent healthcare-focused funds Great Point Partners and Armistice Capital, which may reflect investor confidence in ProMIS' innovative approach to treating Alzheimer's and other neurodegenerative diseases.

Bloomberg believes that investors are looking for new potential hits in the pharmaceutical space and will be closely watching developments around Alzheimer’s treatments in 2025. Any breakthrough in research or regulatory approval of promising drugs could significantly boost the share prices of their developers.

Still, ProMIS has yet to generate operating income. For the third quarter, it posted an operating loss of $4.4 million and net income of $9.3 million, versus a $2.4 million net loss in the same period in 2023 (which was attributed to a change in the fair value of warrant liabilities).

The company has warned that it may not have enough cash for the next 12 months unless it secures more financing. ProMIS needs to continue its research, and if its drugs are approved, it will need to commercialize them, meaning expenses could rise.

In November, Insider Monkey noted that ProMIS had raised money from investors but on the condition that most of it would be received upon achieving certain milestones.

The OnInvest database highlights other risks associated with investing in ProMIS, including high volatility, low liquidity, and critically low robustness to price shocks.

There are also the general risks involved in investing in companies specializing in Alzheimer's disease. Their clinical trials frequently fail, even in the later stages, as Freedom Finance Global analyst Boris Tolkachev has previously noted.