Here's Our Take On The Neurotrope Inc (NASDAQ:NTRP) Data

Neurotrope Inc (NASDAQ:NTRP) just put out its hotly anticipated phase II Alzheimer's data and as we might have predicted, the shorts are out in force. Markets are jumping on the downside bandwagon, and Neurotrope is heading into the open at a close to 50% discount to its Friday close.As regular readers will know, we often take a look at the mainstream interpretation of these sorts of releases in an attempt to ascertain its validity. We've done just that with the Neurotrope numbers, and the above linked-to analysis from Feuerstein over at The Street, and there are a few things that need clearing up.So, here goes.As a quick intro to the drug and the trial, this was a phase II study set up to pitch a drug called Bryostatin against placebo in moderate to severe Alzheimer's patients. The current standard of care treatments in Alzheimer's target the control of symptoms, and not the underlying disease. Bryostatin is an attempt to do the latter, through a novel MOA that involves the regeneration of synapses in the brain (synaptic degeneration is strongly correlated with disease severity).The trial used two doses of Bryostatin, one 20 µg and one 40 µg. Patients in both arms were dosed once every two weeks across a 13-week period, and then measured for disease severity from baseline at the 13-week threshold using what's called the Severe Impairment Battery (SIB), which is an industry standard scale used to evaluate cognition in severe dementia.The numbers look like this: patients in the 20 µg arm that completed the study period registered a mean increase on the SIB of 1.5 vs. a decrease in the placebo group of -1.1 (p-value of 0.07. That's an improvement of 2.6 in SIB.A modified intent to treat population registered a similar trend (to a lesser degree) but that's not particularly relevant here, as these patients didn’t complete doing.So, Feuerstein and the rest are jumping on two elements of the release as indicative of failure, and as justification for the resulting 50% decline in market capitalization.The first, that the improvement was not statistically significant. Sure, a p-value of 0.07 is technically non stat sig, and these thresholds are important to ensure a degree of consistency in the trial space. It's a very close miss, however, and given the sample size (and the improvement scores) we think to say it's a fail on this endpoint is misleading.The second, that the fact that the company hasn’t released the higher dose numbers suggests that they failed (which in all honesty, they probably did), and – and this is the part that’s up for dispute – that this failure of the 40 µg dose reinforces the suggestion that the 20 µg improvement was just a fluke. This is outright false. The MOA of this drug is such that it's expected to work better at a lower dose. Basically, a higher dose can overwhelm neuronal circuits and inhibit the drug's clinical activity. With this in mind, not only dose the failure of the high dose (if that indeed turns out to be what's happened) not indicate failure of the drug across the trial, it actually reinforces the hypothesized MOA.Sure, we'd have liked to have seen a higher degree of SIB improvement. Who wouldn’t? There's a chance that an expanded dosing regimen would lead to this, as the drug is supposed to help neuro-regeneration over time. Thirteen weeks is a very short period, and that the drug failed to score stat sig isn’t too much of a surprise. To say this is a failure, however, is incorrect. We'll almost certainly see a phase III advance, and there's a good chance that an expanded population, subjected to an increased doing period (say, six months instead of 13 weeks), will bring the numbers to statistical significance.Investors need to remember that this is an incredibly difficult group to treat, and the vast majority of companies won't go near it (there's a trend towards trying to get Alzheimer's drugs approved based on data from earlier and earlier progression stages). These are patients that can't recall their names, or struggle to recall the names of everyday objects. That Neurotrope managed to show any degree of improvement in the population is a win for Alzheimer's sufferers, and the FDA will recognize this.There's a dilutive risk to consider as the company expands into phase III, but it's a risk outweighed by the potential upside of a successful study, so for an investor backing the drug, it's unlikely to be prohibitive to an exposure.We will be updating our subscribers as soon as we know more. For the latest updates on NTRP, sign up below!Disclosure: We have no position in NTRP and have not been compensated for this article.