Amplifier Therapeutics investment analysis

October 23, 2023

This is not investment advice. We used AI and automated software tools for most of this research. We did some fact checking but cannot guarantee the accuracy of everything in the article. We do not have a position in or a relationship with the company.

Overview

Amplifier Therapeutics, a Sweden-based biopharma company, is developing AMPK (AMP-activated protein kinase) activator compounds. These compounds target a spectrum of diseases associated with aging, such as metabolic conditions, cardiovascular diseases, kidney diseases, and cancer.

The lead program, ATX-304, is a peripherally restricted pan-AMPK activator. It has demonstrated beneficial impacts on glucose and lipid metabolism, energy expenditure in various animal models of metabolic disorders, cardiovascular functionality, and exercise endurance. ATX-304 is being studied in a Phase 1b clinical trial.

AMP-activated protein kinase (AMPK) is primarily recognized as a cellular energy sensor. It activates in response to declining energy reserves. AMPK is tied to many body functions and has a crucial role in aging. As we grow older, AMPK's efficiency drops, which might influence how our body functions in old age.

Despite its potential, creating drugs that safely target AMPK has been tough due to its complexity. Currently, there are no approved drugs that directly activate AMPK.

The company recently completed a Series A financing round, led by Cambrian, that accumulated $33.25 million. RA Capital and Future Ventures joined the round.

Amplifier Therapeutics Pipeline Overview

Product name	Modality	Target	Indication	Discovery	Preclinical	Phase 1	Phase 2	Phase 3	FDA submission	Commercial
ATX-304	Small molecule	AMPK activator	Cardiometabolic diseases

Highlights and risks

Valuation

Based on the round size of $33M and the fact that Series A rounds often take 15-60% of total equity, we estimate the round was priced at $55-200M. RA Capital Management, a leading crossover investor, participated in the Series A round. Assuming the company generates positive Phase 1b data with the Series A proceeds, and initiates a well-designed Phase 2 study in a tractable indication with significant unmet need, the company could be an IPO candidate after a Series B raise.

Recent comparable IPOs have garnered post-money valuations ranging from $600M to over $1B, and if the company is able to go public after a Series B round, Series A investors would likely receive a significant mark-up on their investment. Positive Phase 2, or, more likely, Phase 3 data could catalyze an acquisition, depending on the study design, indication and study results. A safe and effective AMPK activator could address many large indications that would be attractive for potential big pharma acquirors.

However, at the time of this writing, the IPO window is largely closed. Based on IPO market volume and the number of companies seeking IPO, the probability of an IPO after Series B ranges from low single-digit percentage to low double-digits.

Because the company has not specified a clinical development pathway, we did not conduct a DCF analysis.

Pipeline analysis

Scientific thesis

AMPK plays central role in regulating cellular energy homeostasis. The therapeutic potential of AMPK activation spans a variety of conditions, including metabolic diseases, cardiovascular diseases, and aging-related disorders.

AMPK is often referred to as a "metabolic master switch". It is activated in response to an increase in the AMP/ATP ratio, which occurs when cellular energy levels are low. Once activated, AMPK promotes catabolic pathways that generate ATP, such as glucose uptake and fatty acid oxidation, while inhibiting anabolic pathways that consume ATP, like lipid and protein synthesis.

AMPK promotes glucose uptake in muscles, ensuring cells have an adequate energy supply, especially during exercise. It enhances the breakdown of fats in the liver and skeletal muscle. It does this by inhibiting fatty acid synthesis and promoting fatty acid oxidation. AMPK can also downregulates protein synthesis, which is an energy-consuming process, during energy-depleted states, and stimulate the production of new mitochondria, the cell's energy factories, ensuring that cells can efficiently produce ATP.

AMPK plays an important role in many prevalent, chronic diseases:

• Type 2 Diabetes: AMPK improves insulin sensitivity, making it easier for cells to take in glucose in response to insulin. It does this by promoting glucose uptake into cells and enhancing insulin signaling. Reduced AMPK activity is associated with insulin resistance, a hallmark of type 2 diabetes.
• Obesity: AMPK can help regulate appetite at the central level and has a role in fatty acid metabolism, which can influence body weight.
• Cardiovascular Disease: AMPK has anti-inflammatory and antioxidative effects, which can help in the prevention of atherosclerosis. It also stimulates endothelial nitric oxide synthase, which leads to production of nitric oxide in endothelial cells. Nitric oxide dilates blood vessels and improves blood flow.
• Non-alcoholic Fatty Liver Disease (NAFLD): By inhibiting lipid synthesis and promoting lipid breakdown, AMPK can help reduce fat accumulation in the liver, a major issue in NAFLD.
• Polycystic Ovary Syndrome (PCOS): PCOS, a common endocrine disorder in women, is often associated with insulin resistance. AMPK activation can help improve insulin sensitivity and has been shown to have beneficial effects in women with PCOS.

Perhaps the most well-known AMPK activator is metformin, a first-line treatment for type 2 diabetes. Metformin is thought to work, at least in part, by indirectly activating AMPK. Its precise mechanism remains a topic of investigation, but its effect on improving insulin sensitivity has been linked to AMPK activation.

AMPK is linked to health and longevity, activated by factors like caloric restriction, exercise, certain hormones, and traditional herbal medicines.

Drug development targeting AMPK has faced challenges due to the enzyme's complexity. With multiple subunits and isoforms, achieving selective and safe activation has been difficult. Additionally, while AMPK activation has beneficial effects, overactivation might be detrimental. Striking the right balance is crucial. Advances in understanding AMPK's structure and function, as well as the development of more selective activators, have renewed interest in AMPK as a therapeutic target.

In addition to the challenge of targeting the variety of AMPK isoforms involved in many indications, there are safety considerations for drugs targeting AMPK:

• Hypoglycemia: AMPK activation can increase glucose uptake and fatty acid oxidation, potentially leading to low blood sugar levels, especially if used in conjunction with other glucose-lowering medications.
• Muscle Atrophy:: Chronic activation of AMPK might inhibit the mTOR pathway, a central regulator of cell growth and proliferation. In muscle, this could potentially lead to muscle wasting or atrophy over time.
• Reduced Protein Synthesis: Given its inhibitory effect on the mTOR pathway, AMPK activation might decrease protein synthesis, which could impact cell growth and recovery from injuries.
• Impact on Cell Growth and Proliferation: AMPK activation can inhibit cell growth and proliferation, which might be beneficial for treating conditions like cancer but could be detrimental in situations where cell growth is desirable.
• Potential Interaction with Other Medications: Given its wide range of actions, AMPK activators could interact with other medications, especially those affecting metabolism, potentially leading to unforeseen side effects.
• Concerns in Cancer: While AMPK activation might inhibit the growth of certain cancer cells, there is also evidence suggesting it could promote the survival of other cancer cells under metabolic stress. This dual role in cancer makes its therapeutic targeting in oncology complex.
• Cardiac Concerns: There are concerns about the prolonged activation of AMPK in the heart, as it could potentially alter cardiac metabolism, affecting the organ's function.
• Fertility Issues: AMPK plays a role in regulating the activity of certain enzymes involved in steroid biosynthesis, so there are potential implications for reproductive health and fertility.

ATX-304 is a peripherally restricted pan-AMPK activator. The advantages of a pan-AMPK activator that activates all AMPK isoforms, compared to more selective AMPK activators, include 1) potential to address multiple conditions simultaneously, given that AMPK plays a role in various cellular processes, 2) bypass isoform specificity in conditions where multiple AMPK isoforms are involved, and 3) have synergistic effects by activating multiple isoforms across different tissues or cellular processes.

There are also challenges associated with pan-AMPK activation.

• Increased Side Effect Profile: A pan-AMPK activator could potentially lead to side effects in multiple organs or systems, as it lacks specificity.
• Muscle Atrophy and Reduced Protein Synthesis: s previously mentioned, AMPK can inhibit the mTOR pathway. A pan-AMPK activator might present a higher risk for these effects due to its broad activity.
• Cardiac Concerns: A pan-AMPK activator might exert stronger effects on the heart's metabolism than a more targeted one, potentially leading to more pronounced cardiac side effects.
• Potential for Overactivation: Activating all AMPK isoforms simultaneously might over-stimulate certain pathways, leading to unforeseen consequences.
• Drug Interactions: Given its broader action, a pan-AMPK activator could potentially have more interactions with other drugs.

These challenges could potentially be mitigated through dosing and titration, combinatorial therapies to counteract side effects, targeted delivery to specific tissues or cells, regular monitoring of biomarkers related to AMPK activation, and targeted patient selection.

ATX-304

ATX-304 (formerly known as O304) has been studied in several animal models, as well as a Phase 2a proof-of-concept study. Key findings include:

• Study on O304's Impact on Hyperglycemia in Mice
• Stimulates insulin-independent glucose uptake in skeletal muscle and heart.
• Increases glucose utilization in vivo while preventing glycogen accumulation.
• Acts as a mitochondrial uncoupler, generating metabolic demand.
• Reverses gene expression changes related to metabolic inflexibility in skeletal muscle and heart of diabetic mice.
• Counteracts diabetic cardiomyopathy.
• Preserves β-cell function in Type 2 diabetes mice by preventing decline in insulin secretion, β-cell mass, and pancreatic insulin content.
• Study on O304's Effect on Aged Mice
• Counteracts age-related hyperinsulinemia and insulin resistance.
• Improves cardiac function and exercise capacity in older mice.
• Provides evidence that O304 has the potential to mimic the beneficial effects of exercise.
• Study on O304's Impact on Glucose Homeostasis and Microvascular Perfusion
• Increases glucose uptake in skeletal muscle of diet-induced obese mice.
• Reduces β-cell stress and promotes β-cell rest.
• Lowers fasting plasma glucose levels and HOMA-IR in a phase IIa clinical trial with type 2 diabetes patients on Metformin.
• Enhances peripheral microvascular perfusion and reduces blood pressure in animals and T2D patients.
• Activates AMPK in the heart, leading to increased cardiac glucose uptake, reduced cardiac glycogen levels, and improved left ventricular stroke volume in mice without increasing heart weight.

We discuss the clinical data in more detail below. Regarding the preclinical data, it is important to note several limitations:

• Hybrid Strains and Genetic Consistency: The studies often used F1 offspring obtained from breeding different mouse strains. While this can offer certain advantages in capturing some genetic diversity, F1 hybrids can sometimes produce unpredictable phenotypes due to genetic interactions. Thus, the effects observed in these hybrids may not be directly translatable to humans or even to other mouse strains.
• Induced Conditions: In the studies, certain conditions like diabetes were artificially induced using agents such as streptozotocin. While this method is a common way to model diabetes in mice, it's an acute injury to the beta cells, which might not entirely replicate the chronic and multifactorial pathogenesis of human diabetes.
• Leptin Receptor-Deficient Models (db/db): The db/db mice are a widely used model for Type 2 diabetes and obesity, but they have a monogenic defect, which is a mutation in the leptin receptor. While this model can provide insights into the disease, Type 2 diabetes in humans is polygenic, and many patients do not have issues with leptin signaling.
• hIAPPtg Mice: These transgenic mice overexpress human Islet Amyloid Polypeptide (IAPP) and can be used to study islet amyloidosis. However, it's worth noting that not all human diabetics exhibit islet amyloidosis, and not all cases of islet amyloidosis result in diabetes.
• Age and Gender: Most experimental procedures were performed on male mice. There could be significant gender differences in disease manifestation and drug response, which might not be captured if only one gender is studied.
• Dietary Interventions: High-fat diets (HFD) were used to model obesity and metabolic syndrome. However, the specific composition of these diets and their effects on mice might not entirely reflect the diverse diets and lifestyle factors that contribute to these conditions in humans.
• Short Duration: Some interventions, like diet changes or drug treatments, were conducted over a few weeks. Chronic conditions like diabetes or cardiovascular diseases develop over many years in humans, so short-term mouse studies may miss long-term effects or complications.
• Environmental Control: The animals were housed in very controlled environments (22°C/50% humidity) that do not capture the variability of human environments.
• Drug Dosages and Administration: The concentrations of O304 used in the diets or treatments might not directly translate to human dosing. Furthermore, the metabolic rates and drug metabolism pathways can vary between mice and humans.
• Rat Models: While mice and rats are both rodents, they have distinct physiological and metabolic differences. Thus, findings from rat models might not always align with those from mouse models or humans.
• Sample Size and Randomization: It was noted that for certain experiments, no sample size estimation was performed before the study. Proper sample size calculations are vital for ensuring the statistical power of the results. The mention that "The experiments were not randomized unless otherwise stated" and that investigators were not blinded during some measurements can introduce bias and affect the validity of the results.

Clinical data

O304 was studied in the TELLUS Phase 2a clinical trial. The TELLUS study is a 28-day Phase IIa clinical trial investigating the effects of a first-in-class AMPK activator, O304 (1000 mg/day), in patients with Type 2 Diabetes (T2D) who have been on Metformin for at least 3 months. This was a randomized, double-blinded, placebo-controlled trial.

Included patients were males and females, aged 18-80, with uncomplicated T2D, on a stable regimen of Metformin for 3 or more months, and had an HbA1c level between 6.5% and 9.0%. Key exclusion criteria comprised a history of severe cardiovascular events and clinically significant abnormalities in certain medical tests.

Key findings

Blood Glucose Levels: Patients in the O304 group experienced a statistically significant reduction in fasting plasma glucose (FPG) levels by day 28 compared to day 1. The observed significant reduction started between day 21 and day 28. This is consistent with the timeframe seen in DIO mice, suggesting the effect takes at least 2 weeks to manifest.

Microvascular Perfusion: O304 led to an increased peripheral microvascular perfusion in the calf muscle of T2D patients, as observed using MRI. Specifically, those with relatively lower perfusion rates at baseline benefitted more from O304, showing enhanced hyperemic microvascular perfusion.

Blood Pressure: O304 administration resulted in a statistically significant reduction in both systolic and diastolic blood pressure by day 28 compared to the placebo group. The average reduction in systolic blood pressure was 5.8 mmHg, and for diastolic blood pressure, it was 3.8 mmHg in the O304 group.

Heart Rate: There was no significant change in heart rate in either the O304 or the placebo group by day 28.

Advantages of the study included the randomized, double-blind, placebo-controlled design; statistically significant findings; alignment with preclinical data; and absense of significant safety and tolerability concerns.

Limitations of the design include short duration (a 28-day duration may be considered relatively short, especially for a chronic condition like T2D), limited patient diversity, and single dosage. Further, comparison with other second-line treatments like GLP-1 agonists, SGLT2 inhibitors, or DPP-4 inhibitors wasn't made. Given the recent positive data of GLP-1 agonists in diabetes, it will be important to identify a specific clinical role for O304. Further, more specific limitations include:

• Variability in Dose and Time of Exposure: The preclinical studies showed that O304's beneficial effects require different doses and exposure times. Given the variability, a single-dose, short-term study might not fully capture O304's potential benefits in humans, potentially underestimating its efficacy.
• Imbalance in Weight/BMI: The placebo group weighed significantly more than the O304 group (8 kg difference). This disparity could influence the outcomes, especially in a disease like T2D where weight and BMI play crucial roles. A higher weight/BMI in the placebo group could lead to worse outcomes, making the O304 group appear relatively better, even if the drug itself had minimal effect.
• Inclusion Criteria Based on HbA1c and Variability in FPG: Using HbA1c as an inclusion criterion and observing a wide range of FPG values at baseline introduces a level of inconsistency. Especially concerning is the noted imbalance in FPG and HOMA-IR at day 1 between the groups. If one group starts at a different baseline, it could impact the apparent effectiveness of the treatment.
• Study Duration and Steady-State Concentration: The fact that the full effect of O304 might take longer than 28 days to manifest, combined with the drug's long plasma half-life (t1/2), suggests that the study's duration might have been too short to observe its full potential benefits. This is a significant limitation and suggests a longer trial is necessary.

The TELLUS study provides valuable preliminary insights into O304's potential benefits for T2D patients. However, there are significant design limitations that could impact the interpretation of its results. The most concerning aspects are the imbalances in baseline characteristics and the study's short duration given O304's pharmacokinetics.

Chemical structure

The chemical structure of ATX-304 / O304 showcases a molecule with several structural features that may be pharmacologically relevant, especially in the context of AMPK activation:

• Halogen Substitutions:
• The two chlorine (Cl) substituents can influence the molecule's reactivity, metabolism, and binding affinity. Halogens are frequently used in drug design because they can modulate a drug’s lipophilicity, and they can form halogen bonds with protein residues, potentially enhancing binding to specific targets.
• Heterocycles:
• The molecule contains a thiazole ring (with sulfur and nitrogen) and an imidazole ring (with two nitrogens). Heterocyclic rings like these are prevalent in many bioactive compounds due to their ability to engage in various non-covalent interactions with biological targets.
• Amide Functional Group:
• The amide linkage (C=O and N-H) can be involved in hydrogen bonding, influencing its interaction with biological targets. Amides are also metabolically stable, potentially leading to a longer half-life in vivo.
• Steric Considerations:
• The relatively linear nature of the molecule with the chlorine substitutions at both ends might allow it to fit into specific grooves or pockets of proteins/enzymes, making it selective for its target.

In the context of AMPK activation, the presence of heterocycles could allow the molecule to engage in π-π stacking or other non-covalent interactions with aromatic amino acid residues of the protein. The chlorine substituents could enhance binding to hydrophobic pockets of AMPK or other proteins involved in its activation pathway. The amide group might be crucial for positioning the molecule correctly within the binding site or for forming critical interactions.

It's also worth noting that many successful drugs contain similar structural features, so the presence of these functionalities in O304 makes it plausible as a pharmacologically active molecule. However, the real relevance of these features, especially in the context of AMPK activation, would be determined by the specific interactions O304 has with AMPK or associated proteins, which would typically be elucidated through detailed biochemical and biophysical studies.

Based on the structure of the molecule, there are several areas of potential concern or further investigation:

• Metabolic Stability and Metabolites:: The chlorobenzene rings could be susceptible to metabolic dehalogenation, leading to the formation of potentially reactive metabolites. These metabolites might have different pharmacological effects or could lead to toxicity. Studying the metabolic profile of O304 in liver microsomes or in vivo can provide insights into its metabolic stability and the nature of its metabolites.
• Toxicological Concerns: Chlorinated aromatic compounds can sometimes be associated with toxicological concerns, including potential carcinogenicity. It would be essential to conduct thorough toxicological studies to understand any potential adverse effects and their thresholds.
• Potential for Drug-Drug Interactions: The structure suggests possible interactions with cytochrome P450 enzymes, either as a substrate or an inhibitor. Understanding these interactions is crucial, especially if the drug is intended for populations who might be on multiple medications.
• Formulation Challenges: Given the molecule's structure, there might be challenges in formulating O304 for optimal delivery, especially if oral bioavailability is desired. The potential for salt formation, as mentioned earlier, can influence its formulation.
• Tautomerism and pH Dependence: The potential for tautomerism in the imidazole ring and the molecule's behavior at different pH levels might influence its stability, solubility, and binding affinity.

Market opportunity

AMPK has garnered significant attention as a potential drug target due to its central role in regulating cellular energy balance. A pan-AMPK agonist could have profound implications in several disease areas, including metabolic disorders, cardiovascular diseases, and cancer. While this is more speculative, there's evidence that AMPK activation can extend lifespan in certain organisms.

As the company has not yet identified specific indications it is pursuing, it is not possible to create a revenue build or market model. At a high-level, Metabolic disorders like diabetes represent a massive market. The global diabetes drugs market alone is worth several tens of billions of USD. Cardiovascular drugs also represent a huge market, given the high prevalence of cardiovascular diseases globally. The markets for cancer disorders are also substantial, given the high cost of treatments and the increasing incidence with aging populations.

Selection of the appropriate development plan will be critical, given the high cost of drug development in prevalent, chronic conditions.