Alpine Immune Sciences Inc (ALPN) 2019 Q4 法說會逐字稿

Good afternoon, ladies and gentlemen, and thank you for joining the Alpine Immune Sciences' fourth quarter and year end 2019 company update conference call. All participants are now in a listen only mode. Followed opening remarks Alpine's management will open the lines for question-and-answer period. Please be advised this call is being recorded at the company's request and a webcast of this call will be archived on the company's website for approximately two weeks.

I would now like to introduce Courtney Dugan, Investor Relations. Please go ahead.

Thank you, Olivia, and thank you, everyone, for joining us on today's call. This afternoon, we issued a press release announcing our corporate update and fourth quarter and year end 2019 financial results. We also filed our annual reports on Form 10-K. Both documents can be found on the investor section of our website at alpineimmunesciences.com.

Before we begin today's discussion, I'd like to note that certain matters discussed on today's conference call or answers that may be given to questions could constitute as forward-looking statements, including, but not limited to, statements regarding the anticipated impact and timing of the COVID-19 pandemic on our business development plans and results of operations, our preclinical and clinical development plans and the timing thereof, expectations regarding the sufficiency of cash to fund operations, the timing of our publication of future clinical data, and expectations regarding our ongoing collaborations and potential future collaborations.

Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described from time to time in our SEC filings. Our results may differ materially from those projected on today's call. We undertake no obligation to publicly update any forward-looking statements. With that let me now turn the call over to Alpine's Chairman and Chief Executive Officer, Dr. Mitchell Gold.

Thanks, Courtney. Good afternoon, everyone. We hope that you and your families are safe and well. With me on the call today are Stanford Peng, our President and Head of Research and Development; Paul Rickey, our Chief Financial Officer; and Remy Durand, our Senior Vice President of Business Development and Corporate Strategy. We look forward to sharing with you today our fourth quarter and year end 2019 performance as well as our clinical development plans for both ALPN-101 and ALPN-202, and the potential impact of the current COVID-19 situation.

The Alpine team has made substantial progress over the last year. Our most advanced program, ALPN-101, has successfully completed our Phase 1 dose escalation study in healthy volunteers. ALPN-101 has exhibited favorable PK characteristics and is a highly potent molecule capable of inhibiting both a T-cell and tumor response in humans as demonstrated in our pharmacodynamic assays. This is an important milestone for the company and we believe significantly enhances the developability of the program. We are planning a path forward for ALPN-101 in both acute GVHD, via our BALANCE study and potential other inflammatory diseases in need of a novel biologic approach.

Our immunooncology program, ALPN-202 is a conditional CD28 agonist designed to activate a patient's own immune system to fight cancer. We are ready to enroll ALPN-202's first in-human monotherapy trial, which we are calling NEON-1, both our BALANCE and the NEON-1 studies are now open for enrollment. However, as you might expect, it is difficult at this time to ascertain how rapidly enrollment may proceed based on the current COVID-19 situation.

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

Thank you, Mitch. Over the past several months, we have indeed made several critical achievements for our development programs. ALPN-101 completed its first in human study in adult healthy volunteers. The data from this study are still being finalized, but overall, ALPN-101 was well tolerated without evidence of cytokine storm or release. It exhibited well-behaved pharmacokinetics and pharmacodynamics, including on-target inhibition of immune functionality such as antibody responses to KLH immunization.

Antidrug antibodies were detected in this trial at a rate similar to other biologics and at generally little tighter. Based on these overall results, we anticipate therapeutic doses to be achieved with subcutaneous or intravenous doses at two-to-four-week intervals, which we plan to explore in one or more subsequent efficacy trials. Some of these data were presented as part of an oral presentation at ASH in December 2019, and we plan to report further details after completion of final analyses later this year.

BALANCE, our Phase 1b/2 study in acute steroid-refractory GVHD is currently open for enrollment. We remain excited about this study because of the magnitude of the preclinical data supporting ALPN-101's potential in this disease and are particularly pleased to have recently been granted orphan designation by FDA for this indication. The BALANCE study is an open label dose escalation and expansion study in patients who are refractory or resistant to cortical steroids and will examine endpoints, including safety, objective response rates and duration of responses as well as non-relapse mortality and overall survival. Importantly, dose escalation in this study begins at dose level expected to have pharmacodynamic activity 0.3 milligrams per kilogram.

At the same time, the rationale for exploring ALPN-101 and other inflammatory diseases continues to expand. At last year's American College of Rheumatology meeting, we presented preclinical disease model data supporting connective tissue diseases like lupus and Sjogren's syndrome, as well as inflammatory arthritis conditions such as rheumatoid and psoriatic arthritis. And earlier this year, we presented data on inflammatory bowel disease at the Crohn's & Colitis Congress.

We had been scheduled to participate in a poster presentation with our collaborator, Dr. Katherine Tuttle, Assistant Professor of Ophthalmology at the University of Washington on preclinical data. In uveitis at The Association for Research in Vision and Ophthalmology Annual Meeting, but that meeting has been temporarily postponed due to COVID-19. Nonetheless, along with our previously presented data in preclinical models of multiple sclerosis, these results suggest a potentially broad lifecycle for ALPN-101 in multiple therapeutic areas.

Turning to ALPN-202, we are pleased to have opened NEON-1, a Phase 1 first-in-human open-label dose escalation and expansion study in advanced malignancies. This study will be done in patients who have failed available standard therapies, including checkpoint inhibitors when indicated. Ahe primary endpoint of the study involves safety, but the study will also assess outcomes such as objective response rates, duration of responses, progression-free survival and overall survival.

A tissue-based biomarker for patient selection based on the mechanism of action of ALPN-202 will be explored during dose escalation and may be implemented during or before the expansion cohorts. We recently presented some data on the biomarker assay in a poster at the United States and Canadian Academy of Pathology Annual Meeting. We therefore look forward to shortly having two active clinical programs in efficacy studies.

Looking forward to our pipeline, we have recently identified a novel B-cell modulator developed via our directed evolution platform, which would be applicable to serious inflammatory conditions such as lupus or other B-cell mediated diseases. As the preclinical data on this program matures, we look forward to presenting further details at an appropriate scientific forum later this year.

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

Thank you, Stanford. As both, Mitch and Stanford mentioned, we anticipate advancing both ALPN-101 and ALPN-202 in the clinical trials throughout the current year. With our current cash on hand, we expect to have sufficient cash to support both development plans for at least the next 12 months into early 2021.

Now turning to financial results for the fourth quarter. Cash, cash equivalents and marketable securities totaled $40.9 million as of December 31, 2019, compared to $47 million as of September 30, 2019. The net loss for the quarter was $6.1 million or $0.33 per share. This was a decrease when compared to last year's fourth quarter loss of $11.1 million or $0.80 per share. Revenue recognized under our Adaptimmune collaboration agreement was approximately $884,000 in the fourth quarter 2019. We've recognized no revenue in the fourth quarter of 2018.

Research and development expenses were $5.8 million in the fourth quarter of 2019 compared to $8.9 million in the fourth quarter of 2018. This decrease was primarily due to the decrease in contract manufacturing and preclinical and research activities for our product candidates, partially offset by increased clinical trial expenses for ALPN-101.

General and administrative expenses were $2.1 million in the fourth quarter of 2019 compared to $2.5 million in the fourth quarter of 2018. The decrease was primarily due to decreased legal and patent fees to support our intellectual property.

With that, I will now turn over the call back over to Mitch before opening the call for Q&A.

Thanks, Paul. As you heard from Stanford's comments, we have made excellent progress on the company's programs, and we are continuing active discussions with potential partners. We are now in the next phase of evolution for the company as we advance these novel molecules in patients in need of better therapeutic options.

While this is a unique and unprecedented time in our country, we remain focused on executing our strategy and advancing our programs to understand their potential benefit for patients in need of better therapeutic treatment options. This crisis has galvanized us at Alpine and the industry as a whole, and we feel a sense of purpose in developing therapeutics to help patients.

With that, operator, we'll open the lines for Q&A.

Thank you. (Operator Instructions) Ted Tenthoff, Piper Jaffray.

Great. Hi, everybody. It's great to hear your voice. I'm glad to hear everyone's doing well. I wanted to get a sense with respect to timing, so [NEOP OPED], but when should we be expecting data? Is it just too early to tell at this point we may certainly appreciate that there's a lot of uncertainty out there? Thanks.

Yes, Ted, it's great to hear your voice as well. I think what we could say is previously, I think we thought we'd be up at therapeutic doses at the end of this year, early part of next year. And I think a lot of that's going to depend just on how enrollment really proceeds with the COVID-19 crisis that's ongoing. But Stanford, do you [add to that], do you have anything you want to add on?

Yes. We've not heard sites formally stopping or pausing our study. In fact, there's only been enthusiasm to move forward. But that being said, I think it will be a few more months, perhaps one more quarter to kind of see where things settle out with regard to how enrollment actually goes and how it affects the sites that are involving our studies.

Okay. Well, keep going guys and thanks for all the hard work you are doing.

You too, Ted.

Mark Breidenbach, Oppenheimer.

Hey, guys. Thanks for taking the questions. And congrats on getting both trails open for enrollment, especially given the current conditions. Mitch, maybe you could give us a little bit more color on how many sites are open for each trial and whether or not that pandemic has forced you to kind of change which clinical sites are being activated?

Yes. [Stanford], do you want to take that for both ALPN-101 and 202?

Yes. Actually, it has not changed our site strategy because the sites that were interested before continue to be interested. That being said, we have heard that there have been delays at some sites with regard to, for example, their IRB meeting timelines and so on. So I think what -- like I just mentioned, I think we'll need to -- a little bit more time to get a real handle on what impact it's had if some of these sites really can't move forward, but we're only hearing right now that they can continue. So we're kind of operating on [fae] on both sites that will kind of navigate through the current situation.

And Sanford. Maybe you can offer some qualitative observations on how COVID-19 is impacting allogeneic transplants across the country. Are they still happening or are they mostly being postponed due to lack of ICU space. I'm not sure if allogeneic transplants are kind of on hold in general, if they're still proceeding, which is obviously relevant due to the BALANCE study?

Yes, I think that we've heard different messages probably depending on the disease indication. So as you know, allogeneic transplants are often urgently required in certain settings, for example, some of the chemos. And we've not heard that those are necessarily going to be delayed. In fact, most -- a number of the investigators we've spoken to have insisted that there shouldn't be a delay because those are prioritized situations at their institution.

That being said, I would expect there to be some impact. It's hard to imagine that there won't be an impact in some way, perhaps on the order of frequency of follow-up visits or the intensity of them, the threshold for requiring those subjects to come back to the hospital for follow-up and so on, since there's a push toward -- as I'm sure you know, toward trying to facilitate telemedicine or remote sort of monitoring. I think that's more likely the effect on clinical trial enrollment. Since anytime a new patient needs to be enrolled, what needs be weighed between the subject and the investigator and of course, the protocol is whether the -- any logistical considerations about COVID may interfere with the study processes.

Got it. And maybe just [little] quick last one for Paul. I don't want to leave him out of the conversation. Just noticing that the R&D spending is kind of sharply down versus third quarter. And I'm wondering if you can maybe explain what's behind that and how we should be thinking about R&D spending in 2020?

Yes. If we really look at R&D spending for 2019 and really, in the first three quarters we were pretty much enrolling the ALPN-101 healthy volunteer study over those first three quarters and really just kind of wrapping up and continuing to following on as we look to kind of Q4 there. And so that expense went down.

If you look at ALPN-202 from a CMC production perspective, we had a lot of costs in the first three quarters as well for that as we ramped up. And then as you just heard on this call, we just now are getting the both studies opened for enrollment here at the end of this quarter. And so that's kind of really indicative of what you're seeing from a Q4 R&D expense perspective.

All right. That's pretty helpful. Thanks for taking the questions. And congrats.

Thanks, Mark.

Wangzhi Li, Ladenburg.

Hey, thanks for taking my questions. I have a question specifically about ALPN-202, I think is there's no great study open for enrollment. I look at clinical trial data and it looks like it going to be both solid tumor and the lymphoma. So the first question is, do you have a prioritization in solid tumor or lymphoma is it's no -- it's random based on the -- of the patient enrollment?

And the second question is, if you look at this dose range starting from 0.001 to 20 milligram per kilogram its quite a wide range. So any color on how many dose levels you will test for the Phase 1 trial?

Great. Wangzhi, I will let Stanford take this. Stanford. you want to take the first part of it, where it's lymphomas versus solid tumors and how enriched were the trial?

Yes. So in terms of the indications, we actually don't have a particular preference, although as I'm sure you know, most Phase 1 units tend to be weighted towards solid tumors. So we expect that majority of the patients will be solid tumors. And to be honest, I think our intent is to consider liquid tumors like lymphoma, more in the expansion phase. So we set the protocol up this way so that if we could get at least a few patients during escalation and just to get some experience with the drug that would help us feel comfortable moving into lymphoma and other heme malignancies if that's of interest in the expansion phase. But, to be clear, we expect most of the tumors to be solid just given the nature of most Phase 1 units.

And with regards to the dose regimen, it's written pretty broadly in order to allow a pretty high dose up to 20 milligrams per kilogram, but we don't really expect to need to go that high. As you know, that's a pretty large amount of drug. And our modeling -- so you may recall that about a year ago, we published a PK/PD modeling where the therapeutic dose anticipated -- it's around 0.1 to 0.3 mgs per kg.

So for the for this study, we have an accelerated titration design where we get out of that very low dose, really quite quickly using single subject cohorts. We saw -- if the modeling turns out to be correct, we'll be at pharmacodynamically active doses actually pretty soon and may not need to go that high. But the trials are written with high doses, mostly to accommodate any flexibility or optionality if we did want to keep continuing to escalate just to get better experience of safety and exposure from a drug

That is the -- we have starting with the single patient dose escalation cohort [and once they'll reach in] certain levels, then [use] that as a classic 3+3?

Yes, that's right.

Got it. Okay, great. Thanks for answering my questions.

Thanks, Wangzhi.

I'm showing no further questions at this time. I would like to turn the floor back over to Dr. Gold for closing comments.

Thank you. I would like to thank you, everyone, for joining us today. And I hope you all stay healthy and we look forward to giving you updates in the future. Thanks very much operator.

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may all disconnect.