Alpine Immune Sciences Inc (ALPN) 2021 Q2 法說會逐字稿

(technical difficulty) ladies and gentlemen, and thank you for joining the Alpine Immune Sciences second-quarter 2021 financial results and corporate update conference call. Currently, all participants are in a listen-only mode. (Operator Instructions) As a reminder, this conference is being recorded Tuesday, August 10, 2021.

I would now like to introduce Alex Sharif, Director, Investor Relations and Corporate Development. Please go ahead.

Thank you, Mary. With me on today's call from Alpine Immune Sciences are Executive Chairman and CEO, Dr. Mitchell Gold; President and Head of Research and Development, Dr. Stanford Peng; Chief Financial Officer, Paul Rickey; and Chief Business Officer, Dr. Remy Durand.

This afternoon, Alpine Immune Sciences issued a press release announcing the company's second-quarter 2021 financial results and corporate update. If you have not received this news release and would like to read it or if you would simply like to be added to the company's distribution list, you can do both on the investor relations page of the company's website at www.alpineimmunesciences.com.

During the course of today's conference call, Alpine's management will make forward-looking statements, including, but not limited to, statements regarding the company's preclinical and clinical development plans, and the timing thereof; expectations regarding the sufficiency of cash to fund operations, including any cash received from potential milestone payments under Alpine's collaborations; the timing and publication of future clinical data; expectations regarding Alpine's ongoing collaborations and potential future collaborations, including the anticipated strategic and financial benefits of the option and licensing agreement between Alpine and AbbVie for the development and commercialization of ALPN-101, or acazicolcept; Alpine's ability to successfully develop its product candidates and achieve milestones under its collaboration with AbbVie and others; and the financial and business outlook for Alpine.

These forward-looking statements are based on the company's current expectations and inherently involve significant risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties.

Factors that could cause results to be different from these statements also include factors the company describes in the section entitled Risk Factors in Alpine's quarterly filing on Form 10-Q for the period ended June 30, 2021, and filed with the SEC on or about August 10, 2021.

Alpine cautions you not to place undue reliance on forward-looking statements and undertakes no duty or obligation to update any forward-looking statements as a result of new information, future events or changes in its expectations.

With that, I will now turn the call over to Alpine's Executive Chairman and CEO, Dr. Mitchell Gold.

Thanks, Alex, and welcome to our second-quarter 2021 financial results conference call. We had a highly productive second quarter with substantial progress made across our portfolio. We look to continue to build on our strong momentum and accelerate development of our pipeline of innovative therapies for patients living with cancer and autoimmune and inflammatory diseases.

Before Stanford provides a summary of the key updates for our three most advanced programs, I wanted to take a step back and highlight where the company sits today.

When we founded the company over six years ago, we had a goal of targeting CD28, the key costimulatory ligand on T cells, as a therapeutic approach both for oncology and for autoimmune diseases.

In 2015, CD28 was seen as too risky a direct target, given early experiences with TeGenero monoclonal antibody [that was seeing] near fatal cytokine storm. We believe the biology was too compelling and believed we could successfully engineer approaches that were both safe and effective.

That belief resulted in development of ALPN-101, which we will refer to going forward by the generic name, acazicolcept, or acazi, a dual inhibitor of CD28 and ICOS for autoimmune and inflammatory diseases; and ALPN-202, our conditional CD28 agonist in oncology.

Yesterday, CD28 came to the forefront in an all-day Investor Conference hosted by Bernstein, focused on how to target CD28 in cancer. Stanford, along with the scientific leaders of two other companies, and Mike Curran from MD Anderson, presented on CD28 as a therapeutic target. We believe the data from the programs at Alpine will support CD28 as being a rational and effective target, both in oncology and in autoimmune diseases.

We are proud to have lit the CD28 torch back in 2015, and we look forward to continue to carry it across the finish line to help patients in need of new therapeutic approaches.

At the same time, we are strongly encouraged by the progress of our discovery platform beyond CD28, an immunoglobulin superfamily. The ALPN-303 program, for instance, has demonstrated our ability to target the TNF superfamily as well. It has shown promising preclinical data, and we are particularly excited about this program.

Stanford will go into more detail on this and review our most recent clinical progress across all of our development programs. Stanford?

Thank you, Mitch. As Mitch mentioned, 2021 continues to be an exciting and productive time for us. Importantly, we were particularly pleased to successfully initiate Synergy, the Phase 2 study with acazicolcept in lupus. This is an international, 24-week, randomized, double-blind, placebo-controlled, parallel arm study of approximately 130 participants with active disease.

The primary objectives include safety and tolerability, but important efficacy assessments will include multiple traditional lupus disease activity endpoints, including SLEDAI and BILAG, as well as clinical biomarkers of disease activity such as anti-DNA complement levels.

Development activity for ALPN-202, our conditional CD28 costimulator and dual checkpoint inhibitor, has also been particularly eventful. We presented initial data from the ongoing dose escalation with monotherapy in advanced malignancies, the NEON-1 trial, at ASCO in June. The drug has been very well tolerated with the most remarkable adverse events -- including grade one or two immune-related adverse events, particularly cutaneous -- as of the data cutoff date.

Particularly interesting immuno-phenotypic changes were observed in circulating T cells, including markers of activation and proliferation, increases in central memory T cells and reductions in Tregs. These findings were notable since they do not appear to have been reported previously in studies with combination nivolumab/ipilimumab, suggesting a differentiated profile due to the CD28 mechanism of the drug.

In addition, we are pleased to observe that the majority of participants derive clinical benefit as judged by a best response of stable disease or better, despite the population consisting of heavily pretreated tumors that are traditionally considered not immunologically responsive. The majority of this reported experience was on a weekly dosing schedule.

Now we plan to complete dose escalation on the Q3 week schedule and choose a specific dose regimen, preferably Q3 week for expansion cohorts, hopefully by the end of this year.

For this program, we were also excited about entering a collaboration with Merck to study ALPN-202, in combination with pembrolizumab. This is the NEON-2 trial whose design is similar to NEON-1, with an abbreviated dose escalation and separate expansion part in patients with advanced malignancies that are either eligible for treatment with a PD-1 inhibitor, or otherwise have no standard therapeutic options.

Although the addition of a PD-1 inhibitor to ALPN-202 might seem redundant at first, we have observed preclinically that such a combination can provide additional, perhaps synergistic effects. We attributed this to the ability of PD-1 inhibitors to induce or upregulate PD-L1 expression on tumor and other immune cells, which in turn would potentiate the PD-L1 dependent CD28 costimulatory activity of ALPN-202.

This combination study also facilitates a study of ALPN-202 in immune response of tumors in earlier lines of therapy, helping to expedite the overall clinical development plan. We were pleased to initiate this study as well, this past June.

At the same time, as Mitch mentioned, we're particularly enthusiastic about our third development candidate, ALPN-303, a dual path BAFF/APRIL cytokine inhibitor, which we are developing for lupus and other B cell mediated diseases.

Our scientists received a basic science award for their oral presentation on ALPN-303 at the recent EULAR E-Congress, which included a presentation of ALPN-303's superior potency and effectiveness in animal models, compared to wild-type TACI-Fc fusion comparators.

Studies in non-human primates demonstrated also superior PK/PD, which may translate into superior efficacy and/or a more convenient dosing regimen in humans. We're currently completing clinic enabling activities and continue to target initiation of a Phase 1 study by the end of the year.

I'll now hand the call over to our CFO, Paul Rickey, to discuss our financial results for the quarter. Paul?

Thank you. As Stanford mentioned, in June, we initiated our Phase 2 Synergy study as part of our AbbVie collaboration, and achieved $45 million in pre-option development milestones. That deal provided an upfront payment to Alpine last year of $60 million, and will have provided $105 million cash in the 1st year of our collaboration.

There is still an additional $30 million in potential pre-option development milestones as we progress on our acazi development plan, and $730 million for option exercise and success-based milestones, plus royalties as part of the overall deal value.

Turning to our financial results for the fourth quarter, Alpine's cash, cash equivalents and marketable securities totaled $100.4 million as of June 30, 2021, which does not include the $45 million in achieved AbbVie milestones which we expect to receive in the third quarter.

This compares to our cash balance of $115.4 million on March 31, 2021. Revenue recognized under our collaboration agreements was approximately $7.2 million in the second quarter of 2021, compared to approximately $0.7 million in the second quarter of last year. The increase was attributable to our revenue recognized under our AbbVie agreement.

Research and development expenses were $14.6 million in the second quarter of 2021, compared to $7.1 million in the second quarter of last year. The increase primarily related to contract manufacturing and process development of our product candidates, ongoing clinical trial activities, direct research and personnel-related expenses.

General and administrative expenses for the second quarter of 2021 were $3.3 million, compared to $3.3 million in the second quarter of last year as well. Alpine recorded a net loss of $11 million in the second quarter of 2021, compared to $9.9 million in the second quarter of 2020.

In terms of our cash runway, we expect that our cash on hand, combined with the $45 million in achieved milestones be received in the third quarter, and the potential $30 million in additional pre-option [exercise] milestones under our collaboration with AbbVie, is sufficient to fund Alpine's planned operations through 2023.

With that, I will turn the call back over to Mitch.

Thanks, Paul. Looking forward to upcoming milestones, as Stanford mentioned, we plan to complete dose escalation for NEON-1 on the Q3 week schedule, and to the specific dose regimen for our expansion cohorts.

We anticipate the initiation of our Phase 1 first-in-human trial for ALPN-303 in the fourth quarter of this year. This will be the first clinical step towards establishing a potential best-in-class position for this program.

As a reminder, ALPN-303 targets two B cell cytokines, APRIL and BAFF. We are particularly excited about this program because these are well validated targets. Inhibition of these cytokines is associated with highly robust, reproducible PD endpoints, even in healthy volunteers. As a result, we anticipate that the findings of our Phase 1 trial early next year could be a significant inflection point for the company.

With that, we'll now open the call for questions. Operator?

(Operator Instructions) Ted Tenthoff, Piper Sandler.

Great. Thank you so much. Hi guys, thanks for the update. So want to get a sense just with respect to additional potential studies for 202. What cancer types are really coming to the top and make the most sense, both in terms of combination, but also potentially (inaudible) monotherapy opportunities that might be accelerated? Thanks so much, guys.

Thanks, Ted. Stanford, do you want to take that in terms of what we're thinking for our expansion studies?

Yes, sure. I mean, we continue to think in a couple of different ways. One is around tumor types that are historically refractory to PD-1 inhibitors or other checkpoint inhibitors since the mechanism of 202 is designed to overcome that resistance, as well as also indications that have been historically immune responsive as 202 is designed to be superior to at least checkpoint inhibitor monotherapy.

I'd say those are things that we're continuing to analyze in terms of the data from the ongoing study. And we'll be more prepared to answer that in more specifics when we finish dose escalation.

Great. Thanks, Stanford.

Boris Peaker, Cowen.

Great. I want to ask a question about 202. Can you set expectations for the NEON-1 data update later this year? What does success look like here?

Stanford, do you want to take that?

Sure. I mean, as you know, primary objectives in a dose escalation Phase 1 are mostly safety/tolerability. So a win for us is establishing a dose regimen that we'll take into expansion cohorts.

So as I alluded to, we mostly have data that we reported out with Q1 week regimen. We're also evaluating a Q3 week regimen, which for various reasons could be advantageous, both from a convenience standpoint, and perhaps, also from sparing T cell exhaustion as well. So we'll be looking at that data carefully as that data emerges from the escalation, and then make a decision.

The other thing I might add onto that, Boris, is -- and this was highlighted in detail at the conference yesterday focusing on CD28 as a therapeutic target oncology -- is that everyone is really looking at why CD28's so different than dual checkpoint blockade alone.

And I think what we're seeing from a PD perspective with ALPN-202 is very different, and we're going to obviously get some information out of NEON-1 trial in that regard. We presented some of that data at ASCO, but obviously, it is going to be a much more robust data set as we move that forward.

Got it. And I just have one question on the Synergy study in lupus. Just curious, what do you anticipate the timeline for enrollment to be?

Yes. Stanford, do you want to talk about that?

Yes, we expect that to take at least a year, although that's something we're continuing to evaluate with the changes in the pandemic situation and how that will affect our operations. So I think we're cautiously evaluating that now.

And Boris, just for clarity purposes, our plan is -- one thing is that we plan on completing dose escalation and defining our expansion cohorts by the end of the year. Obviously, we'd look to present that at a scientific conference going forward. Whether that's end of this year, or sometime next year as the conference schedule allows, that's when it will be presented.

Great. Thank you very much for taking my questions.

Mark Breidenbach, Oppenheimer.

Hey, guys. Good afternoon, and thanks for taking the questions. Just with regards to upcoming clinical presentations, can you give us a sense for when we might see initial data from NEON-2 dose escalation? And also, can we expect to see healthy volunteer data from ALPN-303 in the first half of next year?

Yes. I'll take the second question first, Mark. And then I'm sure Stanford is going to want to comment on the first part.

So in terms of ALPN-303, obviously we have a lot of enthusiasm for that. As I mentioned in my prepared remarks, these are well-validated targets. And I think the healthy volunteer trial is going to give us some very instructive endpoints, in terms of the impact that we're having in IgG and IgM.

We anticipate that we'll start that trial in Q4, and we will report data on that probably sometime in the first half of next year. So it'll come in relatively quickly.

In terms of NEON-2, Stanford, do you want to talk about that a little bit?

Sure. I mean, hopefully by the first half of next year, I would say. But again, we're just getting started with that trial. So I think we'll have to get a better estimate of the [operationalization] of recruitment and so on, more likely in a couple of months.

So assuming all goes as planned, we could potentially get through that just as quickly as we did with NEON-1, because it is an abbreviated dose escalation compared to NEON-1. But as I said, the operational aspects [are] shifting and we just want to acknowledge that.

Understood. And just with respect to the healthy volunteer study of 303, are there any particular PD markers or kind of efficacy signals in a healthy volunteer population that you really need to see before justifying moving this program forward into a Phase 2 study in lupus or other autoimmune indications?

Stanford?

Yes, it's pretty well documented -- and I guess validated, if you will -- that the APRIL and BAFF cytokine play a role in B cell population development, as well as immunoglobulin secretion or the production of circulating immunoglobulin.

And so with prior wild-type TACI-Fc fusions that have been in the clinic before, they're actually published healthy volunteer data that are consistent with each other, showing that you're getting approximately 10% to 20% reductions in IgA and IgM with a single dose.

So we're going to be targeting at least that amount to be able to know what dose levels of 303 -- or dose regimens of 303 would be predicted to be at least be able to match that, and then also hopefully exceed those type of PD outcomes.

Super-helpful. Okay. Thank you for taking the questions and congrats on the progress.

Joe Pantginis, H.C. Wainwright.

Hey, guys, good afternoon. Thanks for taking the question. I wanted to start on CD28 concept. Obviously, this is a molecule that's been around for a long time. And I guess I'll frame my question in the following manner. When you look at I/O and I/O approaches, as always, an underlying or percolating concept of being concerned about immune-related adverse events.

So Mitch, I'll use a phrase you used earlier, with regard to the rational targeting of ALPN-202, do you think that helps reduce the risk for irAEs, especially as you're getting to the point where you're looking to choose your final regimen?

Yes. I'll let Stanford talk a little bit on dosing. But what was really exciting about this conference that we participated in yesterday was everyone acknowledged that there was a lot of fear in going after [CD28]. I don't think anyone doubted that it was going to be powerful from a biologic perspective.

But your early experience with antibodies that are targeted, I think made a lot of people kind of stay away from it. We felt like whenever you see a biology that's that powerful, you want to find ways to engineer around it. And obviously us and Regeneron's, obviously, working in this space. We're pretty excited about what we're seeing and that's clearly differentiated from what you're seeing with checkpoint therapies alone.

Stanford, you want to take the second part of that question?

Yes, I make sure I -- maybe to clarify, you mean the concerns about adding 28 on top of checkpoint inhibition for adverse events? Is that the gist of your question?

Yes, but not necessarily just for 202 specifically, but in general, when you have much more immune activation versus checkpoint inhibition alone, in that the targeting aspect of the molecule has the potential to reduce any potential irAEs?

Yes. I mean, I guess in that regard for the design of 202, we've been actually quite pleased at how well the drug has been tolerated, despite the many concerns that even our own team had, in design of the molecule that we wanted to make sure that it was controlled CD28 activation in the tumor microenvironment and so on.

So from that perspective, it's been pretty reassuring to see the progress so far in the clinic. That being said, what we reported out have been primarily the lower doses. So we're quite eager to see how things go as we go to higher doses with the drug.

Another way to look at it, though, is that the checkpoints primarily seem to work through 28. So PD-1 works by inhibiting the CD28 signaling. CTLA-4 works by -- primarily by being a decoy receptor for the CD28 ligands CD80, CD86. So they're really taking the brakes off of CD28, and 202 provides an active signaling -- or the gas, so to speak -- on CD28.

So it's also possible that we're not necessarily going to amplify it exceedingly so, in terms of excess physiology, but rather potentiate the effects. But in the tumor space, potentially the desired effects on T cells in the tumor space.

Got it. No, I appreciate that. And then just quickly on 303, you obviously gave some extra color already. Was just curious what other type of PD markers you might be looking for beyond the immunoglobulins? Because I think, like you said, even though it's a healthy volunteer study, I think there could be some important read throughs.

Yes, I actually forgot to catch or mention also the circulating B cell populations. We do expect to see changes in circulating B cell populations, because that's also been suggested or demonstrated by the mechanism of action and other prior molecules. So we'll be looking at a combination of flow cytometry for B cell subpopulations, as well as circulating IgG.

Got it. Thank you very much, guys.

This concludes the Q&A portion of the call. I will now turn the call back over to Mitchell Gold, who will make a few closing remarks.

Thank you, operator. We welcome your requests for upcoming meetings with our team. Please feel free to reach out to Alex if you'd like to schedule some time with us. With that, I'd like to thank you all for participating in today's call, and have a great day.

This concludes today's conference call. Thank you all for your participation. You may now disconnect.