Alpine Immune Sciences Inc (ALPN) 2020 Q3 法說會逐字稿

Good afternoon, ladies and gentlemen. Thank you for joining the Alpine Immune Sciences' third-quarter 2020 financial results and corporate update conference call. (Operator Instructions) As a reminder, this conference is being recorded today, Thursday, November 12, 2020.

I would now like to introduce Laurence Watts, Investor Relations. Please go ahead.

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

This afternoon, Alpine Immune Sciences issued a press release announcing the company's third-quarter 2020 financial results and corporate updates. If you have not received this news release and would like to read it, or 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 anticipated impacts and timing of the COVID-19 pandemic on Alpine's business, development plans, and timelines and results of operations; 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; Alpine's ability to successfully develop its product candidates and achieve milestones under it's collaboration with AbbVie and others; Alpine's future development plans, addressable markets, regulatory success, and commercial potential of Alpine's or it's collaborators' product candidates; and the financial and business outlook for Alpine.

These forward-looking statements are based on the company's current expectations and inherently involves 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 described in the section entitled Risk Factors in Alpine's Quarterly Report on Form 10-Q for the period ended September 30, 2020, and filed with the SEC on or about November 12, 2020. 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, Laurence, and welcome to our third-quarter 2020 financial results conference call. In the third quarter, we built upon the strong momentum created through this year, which included our Option and License Agreement with AbbVie for worldwide rights to ALPN-101, advancement of ALPN-202 into the clinic, and the completion of an additional financing with top-tier biotech investors through a private placement.

As Paul will highlight, these events provide us with a strong balance sheet that allows us to execute on development of our three promising, and diverse programs. As a reminder, the AbbVie deal provided an upfront payment to Alpine of $60 million, with up to an additional $75 million in potential pre-option payments related to development of ALPN-101.

We continue to invest in our pipeline of novel (technical difficulty) particularly excited about our latest development candidate ALPN-303, the dual B cell cytokine antagonist of both, BAFF and APRIL for the treatment B cell-mediated autoimmune and inflammatory diseases. We believe that these targets have attracted increasing investor interest, and we believe the ALPN-303 has a potential best-in-class profile for fusion proteins targeting these B cell-related pathways.

One of the most exciting aspects of the company are the new Alpinists we have brought on board. I'm confident that they will be significant contributors to our goals, and I'm proud to be on this expedition with a deeply-experienced and committed team.

With that, I'll now turn the call over to our President and Head of R&D, Stanford Peng to provide a more detailed update on our research and development programs. Stanford?

Thank you, Mitch. As a reminder, ALPN-101 is our first-in-class dual inhibitor of the CD28 and ICOS co-stimulatory pathways. We originally developed it for multiple potential autoimmune and inflammatory diseases and are currently focused on systemic lupus erythematosus as part of the AbbVie collaboration.

Over the past quarter, we have reached an agreement with AbbVie regarding the design of an international safety focus Phase 2 study in adults with active lupus. We have successfully received US FDA IND clearance and expect that the study will commence in the first half of next year.

ALPN-202 is our first-in-class conditional CD28 co-stimulator and dual checkpoint inhibitor. We are pleased to report steady progress with NEON-1, its first-in-human study in advanced malignancies.

Following dosing of the first study subject this past June, enrollment and dose escalation has continued to proceed steadily. We look forward to future opportunities to provide more substantive updates at the appropriate time and setting once adequate patient experience has been obtained. We anticipate providing a [steady] update in the first half of next year.

Our third development candidate, ALPN-303 is a dual BAFF/APRIL B cell cytokine antagonist, designed for multiple B cell-mediated inflammatory diseases. We remain particularly optimistic about this agent in light of continued clinical validation of this pathway by others, especially in diseases such as lupus.

In addition, pre-clinical studies suggest superiority of ALPN-303 over other available antagonists in this pathway as we disclosed at the EULAR E-Congress earlier this year. We have initiated formal manufacturing activities and continue to target being ready to enter the clinic by the end of 2021.

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

Thank you, Stanford. Turning to our financial results for the third quarter. Alpine's cash, cash equivalents, and marketable securities totaled $141.3 million as of September 30, 2020. This compares to our balance of $90.5 million as of June 30, 2020. Revenue recognized under our collaboration agreements was approximately $1.9 million in the third quarter of 2020, which primarily relates to our recent collaboration with AbbVie, compared to approximately [$300,000] recognized in the third quarter of the prior year.

Research and Development expenses for the third quarter of 2020 were $6.2 million, compared to $9.5 million for the third quarter last year. It changed primarily relates to a higher prior year cost to cover our healthy volunteer study for ALPN-101 and the manufacturing of drug products for ALPN-202, offset in the current quarter with cost for our NEON-1 study.

General and administrative expenses for the third quarter of 2020 were $2.7 million compared to $2.5 million for the third quarter last year, staying relatively flat. Alpine recorded a net loss of $6.1 million this quarter compared to $11.5 million for the third quarter of 2019.

In terms of our cash runway, we expect that our cash on hand combined with the potential $75 million in pre-option exercise milestones under our collaboration with AbbVie are sufficient to fund Alpine's planned operations into 2024.

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

Thanks, Paul. It's been a transformative year for the company and I'm delighted with momentum we are building at Alpine. Now that we have early clinical validation of our directed evolution platform and for the meaningful partnership with AbbVie, we believe the best is ahead of us as we look to transform the treatment of debilitating diseases. We look forward to keeping you updated on our progress towards that goal.

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

Thank you. (Operator Instructions) Boris Peaker, Cowen.

Great. I'd like to start maybe with 202. Can you just comment what specific patients you're trying to enroll in the NEON-1 study?

Sure. Stanford, do you want to take the first part of that and then maybe I'll chime in at the end.

Sure, it's actually an all-comer study, but patients who have failed all available -- currently available standard therapy options. So that would include patients that have failed checkpoint inhibitors where indicated, but also hopefully indications that are resistant to checkpoint inhibitors.

Just a reminder, Boris. We're still in dose escalation portion of the study and obviously, as we see signals we'll go into expansion cohorts after that.

Got you. Is there any thought, at least at the early stages now, which indications may be more suitable for NEON-1 going forward?

I think it's still too early to say. We're moving steadily through the dose escalation cohorts and I think we're pleased with what we're seeing, but I think it's still too early for us to say which patient population could potentially benefit most from 202.

Got you. And maybe lastly on 303, just kind of maybe a high-level question, how is this molecule differentiated from other B cell targeting molecules in autoimmune diseases approved things like Benlysta and telitacicept, and maybe even 101 itself?

For sure. Stanford, do you want to take that?

Yeah, so those are three different molecules you mentioned and I'll go through each of them. So, Benlysta is a monoclonal antibody that targets BAFF, and only BAFF, whereas ALPN-303 targets both APRIL and BAFF, which are two B cell cytokines that bind to three B cell receptors.

So the major differentiation point of molecules that are derived from TACIs like 303 is that they also get this second cytokine APRIL whereas Benlysta only addresses BAFF.

Telitacicept does also hit APRIL in addition to BAFF. However, we've engineered our molecule to be more potent, we think, than telitacicept, so with some of the data that we alluded to at EULAR, which in-vitro as well as in-vivo in preclinical models, we see superiority over wild type versions of TACI-Fc.

ALPN-101 is more of a T-cell directed co-stimulatory agent. It addresses and binds to CD28 and ICOS, which are both T-cell co-stimulatory receptors. In contrast, 303 as well as telitacicept and Benlysta address B cell cytokines, so they address different parts of the immune system.

Great. Thank you for the answers to my questions.

And Boris, as you have I'll just remind you, I think, as I mentioned in my prepared comments, there's been more and more investor interest focusing on targeting both BAFF and APRIL's, one of the largest IPOs in biotech just went off this week and so as Stanford mentioned, we believe we have a best-in-class product profile going there and as we move that in the clinic next year, we expect that to provide meaningful upside to the company. Next question?

Thank you. Mark Breidenbach, Oppenheimer.

Hey. Good afternoon, guys and thanks for taking my questions. I think I heard Stanford say that the IND has been cleared for the Phase 2 study in SLE. I'm just wondering if you can tell us anything more about that, the study design, could look something like [RemeGen] -- randomized phase 2b of telitacicept in SLE in terms of trial size and endpoints and things like that?

Yeah. Hi, Mark. I'll let Stanford take that for you.

Sure.

Sure, so it is a randomized parallel arm double-blind placebo controlled trial. We'd like to wait before disclosing a lot more further details, since there are other regulatory filings that we'll need to do that we do anticipate to be a multinational study and don't yet have feedback from some of the other areas, but in general, it's a -- we can say right now what we've agreed upon with AbbVie is a safety focused study looking at standard endpoints in a lupus trial.

Got it, got it. And in terms of upcoming data from NEON-1, it might be too early to provide any guidance, but can you give us any hints as to how many patients and dose levels you hope to include in the first cut and just remind me, there's no paired biopsy analysis or tissue biomarker analysis included in the dose escalating cohorts, right?

Yeah. Stanford, do you want to take it and then I'll kind of add on?

Yeah, so we do have -- we do -- we are looking at baseline tumor biopsies for a number of different potential biomarkers of response to ALPN-202. During escalation, we've made biopsies optional on study. But that is to be discussed as we move into expansion cohorts and other further analyses.

I would say, in terms of the number of subjects we hope to see, that kind of depends on what kind of safety and/or efficacy findings we make and also in what particular disease types. Since as you know, in different tumor types you may -- we may need larger numbers of patients to better draw definitive conclusions.

So I'm afraid it's a little wishy-washy but because we're enrolling multiple types of tumors, it's kind of hard to predict right now based on what we're seeing.

One thing I can tell you, Mark, is we're moving very steadily through our dose escalation cohorts. We have not seen any DLTs to date. And we're pleased with what we're seeing our pharmacodynamic analysis had been very consistent with what we predicted pre-clinically. And even though it's a small number of patients, we are seeing some evidence of pharmacologic activity. But it's way too early to make any conclusions from that.

Okay, got it. And maybe just one last quick [sciency] one for Stanford. Stanford, can you remind us, if ALPN-303 shares the same type of Fc domain as telitacicept and/or Benlysta or is it different from those two?

Well, it's not like the Benlysta since Benlysta is a monoclonal antibody. However, for telitacicept, we don't actually know what the structure of their Fc is. Publicly -- in the public documents, we've seen it stated to be a IgG derived Fc, but whether it's an IgG1 or IgG4 et cetera we're -- we -- I don't have comm -- I don't know (multiple speakers) definitively, yeah.

Okay. I think Benlysta is an IgG1, but I could be wrong, but I was just curious. Thanks for taking the questions.

Thanks, Mark.

Thank you. Ted Tenthoff, Piper Sandler.

Great. Thanks, guys. Thanks for the update. A lots of questions answered. Mitch, I wanted to ask your kind of gets yours and Stanford's opinion, sort of, what the cash infusion in partnership with AbbVie does for the company at a higher level? Obviously, you've got a lot of extended compounds here, a lot of work to do, a lot of clinical progress. But what does this really do in terms of transforming the company and [enable] to broaden and expand the pipeline? Thanks.

Yeah. Hi, Ted, and thanks for the question. It really is very transformative for us on a number of different levels. One, it allows us to execute on our two ongoing clinical programs and then bring [ALPN-303] into the clinic around where we can get meaningful data from that. But it really, as I mentioned in my prepared comments, brought on a whole group of people into the company that are really top tier, and allows us to invest in our discovery pipeline, which we're very excited about.

We know that this platform is directed evolution platform can be very productive since it's already spun-off, re-programs (inaudible). With ALPN-101, we've seen early signs of clinical validation. I think we're pretty excited about what the future holds for the platform coming out of our discovery pipeline, where I'd guide you towards is, we have two programs already in autoimmune and inflammation, I think you should expect the next program to come out of our discovery platform will be focused on the I/O front side.

Great, Mitch. That's super helpful. Thanks so much.

Thanks, Ted.

Thank you. Robert Driscoll, Wedbush Securities.

Hi, there. This is an (inaudible) on for Rob. Just quick finance question. Was there a milestone [in] from AbbVie associated with the IND clearance or maybe what are the next couple of [curved] ones?

Well, it probably would have been a disclosable event. What we've said publicly so far is there is $75 million in pre-option milestone payments. They're divided roughly equally. As Stanford mentioned, the US IND has been cleared and we expect enrollment to begin in the first half of next year and beyond that we're not going to comment other than -- when we trigger or hit the milestone, we'll make that publicly known.

Got it. Okay. Thank you.

Thank you. Wangzhi Li, Ladenburg.

Hi. Thanks for taking my question. It's good to hear Mitch mention the NEON-1 doing well so far. And I'm just wondering, could you remind me if the trial three plus three design and can you allow to -- allowed it to enroll patients simultaneously for the same cohort? Or you needed some kind of sequential enrolment or waiting period given the history of the CD28 agonist trial?

Yeah. Stanford, do you want to take that?

Yeah, so it's an accelerated titration design in the first few cohorts and then changed to a three plus three. So the accelerated titration is to get us out of the theoretically low-dose -- theoretically non-pharmacologically active dose ranges. And then allow us to explore in a traditional three plus three design in levels that we expect to have some type of pharmacodynamic activity.

So this three plus three cohorts are you allowed to new patients simultaneously?

Well, we are doing sentinel dosing during our cohorts. But the actual strategy of the sentinel dosing varies from cohort to cohort.

Got it. Okay. That's helpful. And then my last question is for three plus three, could you remind me the timing for IND?

Yeah. We've as -- we're pretty excited about that and we're putting significant resources behind that program for a lot of our IND enabling work, but we're guiding towards an IND in Q4 of next year.

Q4 next year. Okay. That's great. Thank you for taking my questions.

Thanks, Wangzhi. Appreciate you getting on.

Thank you.

Thank you. There are no further questions at this time. I would now like to turn the call over back to Mitchell Gold.

Thank you. I would just want to thank everyone for making the time today and we look forward to meeting with many of you over the phone or over Zoom to give you updates on the company. We're very, very pleased with the progress that we've made over the last year or so. Thanks very much and have a great day.

This concludes today's conference call. You may now disconnect. Thank you.