The miracle worker

Has this man's company discovered a drug that could end the misery of Alzheimer's Disease? If so, it would help millions ­ and deliver huge profits for ReGen Therapeutics. So what's the secret? The answer lies in sheep's milk...

Alzheimer's, as anyone who has cared for an elderly sufferer knows, is a cruel disease that robs its victims of their memory, their language and their personality. It strikes without warning and apparently without reason, and those affected become confused, agitated and eventually incapable of caring for themselves as their brain cells deteriorate.

It is also a disturbingly random condition, more common among older people but affecting men and women in roughly equal proportion. There is no obvious genetic predisposition to senile dementia and no compelling evidence that it is encouraged by lifestyle choices such as smoking or drinking. In any given year, a study shows, around 1 per cent of the population will develop a disease for which scientists have searched in vain for a possible cure.

But last month an AIM-quoted company called ReGen Therapeutics quietly confirmed that initial clinical trials of a product called Colostrinin have proved that it might be possible to arrest, and even reverse, the symptoms of Alzheimer's disease without significant side-effects. The treatment, produced from colostrum or the first milk produced by mammals after giving birth, is thought to stimulate the immune system and protect human brain cells by dissolving the abnormal proteins that build, in the central nervous systems of Alzheimer's patients.

"The data is very encouraging," says ReGen's chief executive, Mike Harvey, who joined the company shortly after the trials of Colostrinin against a placebo began in November 1999. "We know there are no safety issues and there are clear differences between the two groups of patients. We are looking at the relative rates of deterioration and we are seeing a trend where those receiving Colostrinin are deteriorating significantly less than those who are not. In some cases the progress of the disease appears to have stopped." One person taking Colostrinin, administered as a pill, is understood to have improved so markedly he is back at work.

The trials, which involve testing patients on their ability to recognise and remember colours, shapes and everyday objects, also indicate Colostrinin could deliver bigger and more sustainable improvements than other drugs. Pfizer's Aricept, the market leader with annual sales of £750m, produces comparatively modest improvements. Tacrine, made by Warner-Lambert, has been linked with potentially toxic side-effects on the liver. Colostrinin, essentially a natural substance derived from sheep's colostrum, appears to be effective and safe. "In some of our earlier trials there were some indications that some patients suffered from insomnia but the symptoms didn't persist," Mr Harvey says.

ReGen's results will not be conclusive until the end of the year, but since the trial's interim results were released last month the company's share price has climbed about 50 per cent to 21p as investors eye the potential market for an effective Alzheimer's treatment. An estimated 10 million people in Europe, the United States and Japan suffer from it and by the middle of the century the worldwide figure might be closer to 100 million, some projections show. At present, Colostrinin could generate global sales of up to $5bn (£3.5bn) a year, which could grow substantially as the population ages. This week ReGen is valued at about £15m on the stock market, but some analysts believe that could rise to £150m if Colostrinin's final trials prove successful.

ReGen has already made significant progress since the company was launched four years ago by Jerzy Georgiades, a Polish immunologist, with a lawyer and investor Malcolm Beveridge and adviser Martin Small, all of whom are still with the business. The same year, ReGen acquired the intellectual property rights to Colostrinin from the Ludwik Hirszfeld Institute of Immunology, a research centre that had been investigating the properties of Colostrin for nearly 25 years. The company has raised more than £6.3m through share placings and brought in a handful of experienced directors including Mr Harvey, a former new development director with the pharmaceuticals group Medeva, and Percy Lomax, the executive chairman, who worked for Glaxo and Fisons before becoming a City analyst and corporate adviser. Rentschler, a German pharmaceutical company, owns nearly 20 per cent of the company and Jupiter Asset Management holds an 8 per cent stake. What swayed Rentschler, Jupiter and the others is that ReGen's treatment acts in a way that is very different to rival drugs engineered in a laboratory. "We think the product has multiple actions, and the designer molecules that drug companies produce are by their nature targeted at a single point of intervention in the disease," says Mr Harvey. "Our product is a naturally occurring mixture of peptides with different properties. We know some intervene in the immune response, and we know some have anti-oxidant properties." Some of the symptoms of Alzheimer's are thought to be caused by abnormal proteins deposited in the brain, which prevent its receptors working properly. "When you do a post- mortem on a sufferer the brain is absolutely clogged with beta-amyloid protein," Mr Harvey says. "We believe some of Colostinin's peptides will combine with it to inhibit its growth."

When ReGen bought the rights to Colostrinin it also applied to patent the drug's various actions, which could, in theory, have applications in other areas of medicine. Colostrum's anti-oxidant properties, in particular, might be beneficial elsewhere, although both Mr Harvey and Mr Lomax insist that their priority is the project in hand. "There could well be other applications but clearly those would have to be properly researched," Mr Harvey says. "We don't have any specific projects but we have ideas and we know what we could do. We are focusing our resources on our present project and we are not going to run down a blind alley."

The company signed an agreement last August with the Oxford-based AEA Technology to begin work on manufacturing more substantial quantities of Colostrinin, which will enable larger-scale tests to begin once the immediate clinical trails are completed. Ewes provide up to two litres of colostrum per day, half of which would be sufficient to treat eight patients for one year. Mr Harvey says: "By the end of the year we will have statistically meaningful evidence that the product does something; we will have the means to make enough Colostrinin to support bigger trials; then we will begin organising and running the tests necessary to take this product to the marketplace."

At that point the directors of ReGen must decide whether they are willing to take Colostrinin forward themselves, or whether, as is likely with long careers already behind them, they would prefer to license the product to one of the big pharmaceutical companies and pocket the proceeds at a much earlier stage.

"There is a spectrum of possibilities from 'ReGen funds and does everything itself', to 'ReGen hands everything over, lock, stock and barrel, as a package as a licensing partner'," Mr Harvey says. "Whether we do it on our own or with a licensing partner depends on all sorts of factors, not least whether we can raise more funding between now and the end of the year." Most analysts are convinced Pfizer or Warner-Lambert will jump at buying ReGen to protect their market positions.

ReGen's cash pile will last until next March when the company will have completed an initial manufacturing run as well as the clinical trials. The directors are conscious of the need to preserve funds and ReGen's overheads are relatively low. The trials, monitored by Rentschler, are taking place in Poland, a much less expensive country than Britain, although the directors say later tests could be done here. The tests also involve just 90 patients instead of the several thousand volunteers usually required to test therapies for non-fatal conditions.

"We are dealing with a disease which is ultimately a death sentence," Mr Lomax says. "If you are dealing with patients who are dying, your ability to show efficacy is a lot easier than if you are dealing with arthritis patients, for example, whose disease can be very distressing but where improvements are much less momentous than life or death. That makes the economics quite different."

With no hold-ups or hiccups, Colostrinin could be commercially available in Europe by the middle of 2004, although the directors say wide availability could take much longer. "We may have a drug that may be able to stabilise patients," Mr Lomax says. Anyone with experience of Alzheimer's will surely hope he is right.

THE REGEN THERAPEUTICS STORY

1995: The results of a trial in Poland on patients with symptoms of Alzheimer's show Colostrinin is therapeutically effective

1997: Jerzy Georgaides, Martin Small and Malcolm Beveridge join forces to acquire the intellectual property rights to Colostrinin through a vehicle they call ReGen

June 1998: Percy Lomax, formerly an analyst, corporate adviser and company director in the drugs sector, joins ReGen as executive chairman

November 1998: ReGen's shares begin trading on Ofex, raising £1.45m to fund the further development of Colostrinin. The following year a further £596,000m is raised by two placings of additional shares.

November 1999: Colostrinin begins clinical trials involving 90 patients in Poland

February 2000: Mike Harvey, formerly a director at the pharmaceutical group Medeva, joins ReGen as chief executive and shortly afterwards the company raises a further £4.25m via an institutional placing

March 2000: The company floats on the Alternative Investment Market after the offer was 10 times oversubscribed

April 2001: Initial results from Colostrin's clinical trials are encouraging. The study continues