(ELDN) 2021 Q1 法說會逐字稿

Greetings, all, and welcome to the Eledon Pharmaceuticals Reports First Quarter 2021 Financial Results. (Operator Instructions) As a reminder, this call is being recorded today, Thursday, May 13, 2021.

I'd now like to turn the call over to Jon Kuwahara, Senior VP of Finance. Please go ahead.

Good afternoon, and thank you all for joining Eledon Pharmaceuticals' First Quarter 2021 Financial Results Conference Call. Joining me today are 3 members of our leadership team: David-Alexandre Gros, Chief Executive Officer; Steve Perrin, President and Chief Scientific Officer; and Paul Little, Chief Financial Officer.

Earlier today, Eledon issued a press release announcing financial results for the first quarter ended March 31, 2021. You may access the release under the Investors tab on our company website, eledon.com.

Before we begin, I would like to remind everyone that statements made during this conference call relating to Eledon's expected future performance, future business prospects or future events or plans may include forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. All such forward-looking statements are intended to be subject to the safe harbor protection provided by the Reform Act. Actual outcomes and results could differ materially from these forecasts, due to the impact of many factors beyond the control of Eledon. Eledon expressly disclaims any duty to provide updates to its forward-looking statements, whether as a result of new information, future events or otherwise. Participants are directed to the risk factors set forth in Eledon's reports filed with the Securities and Exchange Commission.

It is now my pleasure to pass the call to our CEO, Dr. David-Alexandre Gros. D.A.?

Thank you, Jon, and good afternoon, everyone. We made good progress during the first quarter, advancing both our company and our lead molecule, AT-1501. I'm excited by the promise offered to us by AT-1501 as a potential therapeutic for organ or cellular transplantation, ALS and serious immunological diseases, where patients face limited treatment options.

Steve will go into details around AT-1501 program updates. But at a high level, in the first quarter of this year, we continued to enroll patients into and remain on track for our ongoing ALS Phase 2 study. We reopened our Canadian site for our Phase 2 islet cell transplantation study for the treatment of type 1 diabetes, and we received FDA feedback and updated our development strategy in renal transplantation. Operationally, we completed our evolution into Eledon Pharmaceuticals from Novus Therapeutics. We also bolstered our senior leadership team to help us execute on our plans and achieve our short- and long-term goals.

Regarding the team, I'm extremely pleased to introduce 4 new executives: Paul Little as Chief Financial Officer; Jeff Bornstein as Chief Medical Officer; David Hovland as Chief Regulatory Officer; and Bryan Smith as General Counsel, Corporate Secretary and Chief Compliance Officer. With them on board, I'm thrilled that we've built out a top-tier leadership team that I believe positions us to achieve success for the benefit of patients and shareholders alike.

I will now turn the call over to Steve Perrin, our President and Chief Scientific Officer, to discuss our clinical programs, after which Paul Little will provide a financial update. Steve, please go ahead.

Thank you, D.A. For those of you that are new to Eledon's story, I'll start by giving a brief overview of our lead asset AT-1501, an IgG1 anti-CD40 ligand antibody lacking Fc effector function. Physiologically, the interaction of CD40 ligand and CD40 results in clonal expansion, antibody production and secretion of proinflammatory cytokines that amplify an immune response. The CD40/CD40 ligand pathway is an attractive drug target because the engagement of these receptors plays a pivotal role in immune system activation by mediating both antibody and cellular immune responses.

We are focusing our efforts on the development of an antagonist antibody targeting the ligand rather than the receptor, since targeting the ligand has been shown to be more efficacious in preclinical models of autoimmunity as well as in the prevention of acute and long-term allograft transplant rejection. There may be 3 different biological mechanisms that benefit targeting anti-CD40 ligand over targeting anti-CD40 receptor. The ligand is expressed on fewer cell types, with expression generally restricted to platelets, endothelial cells and activated lymphocytes, whereas the receptor is more broadly expressed on antigen-presenting cells including monocytes, macrophages, dendritic cells and specialized antigen-presenting cells. Second, targeting both the receptor and the ligand inhibits B-cell activation and class-switching, as well as inhibiting the proinflammatory polarization of CD4-positive helper T cells. However, blocking CD40 ligand also inhibits other integrin receptors, including CD11 receptors on antigen-presenting cells, thus blocking the proinflammatory polarization of CD8-positive cytotoxic T cells as well. And third, blocking the ligand also polarizes CD4-positive lymphocytes to Foxp3+ Tregs, thus potentially creating a more tolerogenic environment.

Our current development strategy is to target 4 indications, which I will discuss in order of clinical development. First, amyotrophic lateral sclerosis, or ALS, where we currently have a Phase 2 trial enrolling; second, islet cell transplantation as a potential functional cure for people living with type 1 diabetes, where we currently have an active clinical site in Canada; third, prevention of kidney allograft transplant rejection, where we have received guidance from the FDA on the path forward in the United States and are in parallel exploring a renal transplant study ex-U.S.; and fourth, autoimmune nephritis, where we are finalizing indication selection and plan to communicate our strategy next quarter.

I'll now go into more detail regarding each of these indications. In ALS, Eledon initiated a Phase 2 safety, tolerability and biomarker study in October of 2020. The trial is a 12-week open-label, dose-escalating study with 4 doses of AT-1501. Currently, the study is enrolling at 12 sites in the United States and Canada. Our enrollment continues to be on track, and we expect to read out top line data in the first half of 2022. We will assess 2 primary categories of biomarker endpoints, with each subject serving as their own control by comparing changes from baseline. In the first category, we will assess biomarkers of CD40 ligand target engagement. Mechanistically blocking CD40 ligand has profound effects on B-cell maturation, antibody production and antibody class-switching. We anticipate that we will be able to assess CD40 ligand target engagement by AT-1501 with markers of B-cell function such as CXCL13.

The second category of biomarkers are changes in proinflammatory chemokines and cytokines upregulated in people living with ALS. There is a long history of ALS data describing increases of proinflammatory signals in circulation, including TNF alpha, MCP-1, IL-6 and EN-RAGE. We anticipate blocking of CD40 ligand will result in an overall decrease of ALS-related proinflammatory markers in circulation.

Finally, we will also assess the other exploratory endpoints, including changes in ALS Functional Rating Scale or ALSFRS, respiratory function as well as the levels of neurofilament light chain in circulation, since recent publications have shown a correlation between levels of neurofilament light chain and the rate of disease progression in ALS.

In diabetes, we are focusing on people living with the brittle phase of type 1 diabetes, who are on chronic treatment with exogenous insulin and experience severe swings in blood glucose levels, hypoglycemic unawareness, and associated comorbidities. Clinical trials conducted by the Clinical Islet Transplantation Consortium as well as islet cell transplants in other countries, have demonstrated that islet cell transplant in patients with difficult to control type 1 diabetes may help maintain glycemic balance, reinstate metabolic control and, in some cases, even eliminate the need for exogenous insulin.

However, the current use of calcineurin inhibitors, or CNIs, necessary for the prevention of islet cell transplant rejection poses 2 issues. First, CNIs are toxic towards transplanted islets, potentially resulting in significant islet cell loss post-transplant, and may lead to the requirement for multiple islet cell transplants. Indeed, in published trials, islet cell transplant recipients typically require multiple transplants, with the need for a second transplant often apparent within approximately 90 days after the first transplant. Beyond islet cell toxicity, CNIs have a long list of associated toxicities, including nephrotoxicity, cardiotoxicity, tremor and hair loss. As a result, we believe that replacing CNIs with AT-1501 may improve islet cell survival and clinical outcomes associated with islet cell transplant, thus potentially allowing for islet cell transplant to become a viable treatment option and even a potential functional cure for persons living with brittle type 1 diabetes.

In collaboration with Norma Kenyon at the University of Miami, we have generated preclinical data in a nonhuman primate model of islet cell transplant, demonstrating that AT-1501, in combination with other immunomodulators or as monotherapy, may have the ability to prevent acute and long-term rejection of transplanted islets. We currently have an active clinical site in Alberta, Canada, seeking to enroll a single open-arm label study. Primary endpoints include safety and tolerability, glucose control, insulin independence, reduction in HbA1c and graft survival and function. We will also be assessing hypoglycemic awareness events as well as renal function. Although Alberta has been significantly impacted by COVID in the virus's complicated travel in Canada, we are still targeting to enroll the first patient this quarter and generate interim data in islet cell transplant in the first half of 2022.

With regards to data, we also look forward to having presentations and posters at the American Transplant Conference in June, where we plan to present data from our Phase 1 clinical study of AT-1501, as well as pre-clinical data, including characterization of AT-1501 in in-vitro assays and nonhuman primate studies of AT-1501 in the prevention of islet cell transplantation rejection.

Moving on to renal transplantation. I'd like to address the announcement we made on April 26, updating our development strategy for AT-1501 in renal transplantation, following our ongoing discussions with the FDA. Recall as background that we have already studied AT-1501 and demonstrated a good safety profile in over 60 nonhuman primates, including a model of islet cell transplantation where the molecule also showed preclinical efficacy. Moreover, multiple historical anti-CD40 ligand molecules similar to AT-1501, have demonstrated preclinical safety and efficacy in hundreds of nonhuman primates, including specifically in nonhuman primate models of renal transplantation. Nevertheless, as part of our normal course of discussions to start the Phase 2 trial for kidney transplantation, the FDA requested that we first provide AT-1501 drug-specific renal transplant data in nonhuman primates prior to initiating a Phase 2 trial in the U.S. To meet the agency's request, we plan to initiate a preclinical study of AT-1501 in a nonhuman primate model of renal transplantation, which we expect to complete in late 2022. Although we cannot fully predict what regulators in other jurisdictions will now require, we are also exploring the ability to conduct a renal transplantation clinical trial outside the U.S. in parallel to this new nonhuman primate study. We will provide updates on this potential clinical trial and its design as we have discussions with and receive feedback from international regulatory agencies. Of note, the FDA feedback on renal transplantation does not impact our other ongoing development programs in either the U.S. or Canada. There have been no significant new drug-related safety signals with AT-1501, and this new FDA request was not due to any specific event or data from our ongoing trials of AT-1501.

In autoimmunity, we are focusing on autoimmune nephritis, which are autoimmune diseases of the kidney. There was a long history of preclinical and clinical data demonstrating that blocking CD40 ligand signaling ameliorates disease progression, modifies biomarkers of disease and improves renal function in diseases such as focal segmental glomerulosclerosis, lupus nephritis and IgA nephropathy. Moreover, soluble CD40 ligand often correlates with disease flares in autoimmune diseases such as these. We look forward to providing more details on our development plans in autoimmune nephritis next quarter.

With that, I'll turn the call over to Paul for a financial update.

Thank you, Steve. In addition to the financial results summarized in our press release, you can find additional information in our Form 10-Q, which we will file later today.

The company reported a net loss of $8.5 million or $0.57 per share for the 3 months ended March 31, 2021 compared to a net loss of $8.2 million or $8.52 per share for the same period in 2020.

Research and development expenses were $5.6 million for the 3 months ended March 31, 2021 compared to $1.6 million for the same period in 2020. The increase in R&D costs was primarily due to spend related to the production of clinical trial materials and other CMC activities as we advance our AT-1501 program.

General and administrative expenses were $3.3 million for the 3 months ended March 31, 2021 compared to $1.7 million for the same period in 2020.

The company had approximately $108.6 million in cash and cash equivalents as of March 31, 2021 compared to $114.2 million in cash and cash equivalents in December -- as of December 31, 2020. We expect our financial resources to be sufficient to fund operations as currently planned well into 2023.

With that financial update, let me turn the call back over to D.A. to highlight some of our key upcoming milestones for 2021.

Thank you, Paul. In the early part of this year, we became Eledon Pharmaceuticals and both continued to make progress advancing AT-1501 and building out our team. During the second quarter, we expect to initiate a Phase 2 trial in islet cell transplantation in type 1 diabetes, and we will be presenting AT-1501 data, including nonhuman primate data, in a type 1 diabetes model at the American Society of Transplantation annual meeting in June.

Moving forward, we'll continue our efforts to advance our renal transplantation program by initiating a study in a nonhuman primate model while exploring a parallel track that would involve a clinical trial outside the U.S.

Lastly, we'll also continue to work on our preparations in autoimmune nephritis, where we expect to launch a trial later this year.

With our world-class team and strong cash position, we believe that we are well positioned to deliver on these important milestones as we develop Eledon into a leading targeted immunology company focused on the CD40/CD40 ligand pathway.

With that, I will now ask the operator to begin our Q&A session. Operator?

(Operator Instructions) Our first question comes from Alethia Young with Cantor.

This is Li on for Alethia. Just kind of curious why you think the FDA wanted specific information related to 1501 when -- given that there's already primate data out there from the competitors?

So I think the FDA was focused on being able to see drug-specific and organ-specific data. So as you know, we have done, as we discussed on this call, nonhuman primate studies looking at transplantation, but with islet cells. And here in transplantation, we're in a unique situation where it becomes hard to separate safety and efficacy data, since one needs efficacy in order to be able to protect the organ. So what the FDA was looking for was to have specific information on AT-1501 in renal transplantation in order to make sure that -- to give comfort that there would be not only safety but efficacy in this particular type of transplantation. And that [particularly] has to do -- there's -- as you know, each organ is very valuable here, and so there's quite a high bar with transplantation.

Okay. Just a follow-up. Can you just maybe talk a little bit more about your potential plans to run an ex-U.S. study for 1501 in renal transplant just to sort of generate some proof-of-concept data here?

Exactly. So these are still early days in these discussions, since as you know, we just received the feedback from the agency recently. But the goal would be to do a smaller trial than what we had initially anticipated, but one that could be done internationally, and to your point, would allow us to begin to be able to show data in terms of both safety and efficacy in renal transplantation in humans.

And our next question comes from Rami Katkhuda with LifeSci Capital.

Just a quick one from me. But based on preclinical IT data that -- ITT data that you presented, do you guys envision utilizing a monotherapy arm in the upcoming Phase 2 trial? Or will you test 1501 in combo with standard of care?

Just to clarify, are you talking about the renal trial, the human islet cell transplant trial or the nonhuman primate renal trial?

Sorry, this would be for the human islet cell transplantation trial.

Sure. Let me turn that over to Steve to talk about that trial.

Yes. No, currently the human islet cell transplant trial is not a monotherapy trial. It's a trial where we're trying to really achieve getting rid of calcineurin inhibitors due to the associated toxicities that we described. We really feel that in the absence of CNIs, based on our preclinical data and historical preclinical data, that we'll have much better islet cell survival, much better islet cell function and hopefully reduce the number of transplants required to get people a large enough islet cell mass to really impact insulin production. So it's not a monotherapy trial. It's a trial with induction therapy plus maintenance therapy.

Our next question comes from Thomas Smith with SVB Leerink.

I guess, first, just on the updated plan in renal transplant. Can you provide a little more color on the plans for running the additional nonhuman primate study? I know you've laid out some initial time lines, but just a sense of, I guess, size and scope and specifically what you're looking for?

Yes. So we're still in discussions with the agency about the design. Obviously, we're trying to be sensitive for the utilization of nonhuman primates in these types of experiments, but understand the ability to generate that type of data. I mean the guidance from the agency, they want to show our ability to prevent transplant rejection. So that was probably the most important requirement as we think about our design with them, but we're still in a dialogue on what that design needs to look like.

And it'll most likely include monotherapy, in order to be able to show the fact specifically of our antibody.

Okay. Great. And then a follow-up question, just in terms of the ALS study enrollment. As we're starting to see some improvement in COVID-19 infection rates, maybe if you could just talk a little bit about enrollment trends. Are you guys seeing any meaningful changes in terms of patient enrollment or cadence that gives you a little bit more confidence in the first half '22 time line for data?

So in terms of the ALS trial, as we mentioned, we're on track. Overall, we've been on track for pretty much the whole time since we've launched the trial, but we did see some slowdowns that were associated with the various COVID peaks here in the United States. But maybe because we're in enough sites, and the sites are distributed across the United States and Canada, it did not have a meaningful impact in terms of recruitment and enrollment. So with regards to that one trial, we continue to see good interest, as we've seen. But at least that specific trial has been so far quite independent of what's been happening with COVID.

(Operator Instructions) Next question comes from Matt Kaplan with Ladenburg Thalmann.

I just wanted to follow up a little bit on the islet cell transplant trial. It sounds like you're about to have your first patient enrolled in that near term. How should we think about kind of the rollout of data from that study? Is it going to be as you reach a certain cohort number? Or will you announce data as you get kind of completion -- towards the completion of the study?

Great. Thank you very much, Matt. Let me turn that over to Steve.

Yes, it's a great question, Matt. Obviously we want a cohort of patients to be able to determine readouts in the study. So we're enthusiastic that the site is active, and we're looking forward to our first patient coming in. But we need 3 or 4 subjects' worth of data to really understand the outcomes that we're looking at in the study, which is islet cell function, metabolic control, glycemic awareness. So I think we're still on track to be able to acquire that data for late next year, but we're not going to be announcing data on a subject-by-subject basis.

Yes. So we'll announce the data on the first subset in the first half of next year, and then we would expect to have the full number of patients enrolled and to get that data, the full top line data in the second half.

Okay. That's very helpful. And then second question, you mentioned some upcoming presentations at the American Society of Transplantation. Can you give us a little bit more color in terms of what to look for there and as you announce that -- those data sets in June?

Yes, sure. There's 4 presentations that's going to happen at the Transplant Congress. There's 2 posters and 2 oral presentations. One of the posters is focusing on the historical design of AT-1501 and its characterization primarily in in-vitro studies with our receptor-binding Fc effector function and lack of platelet activation. The second poster is focused on the nonhuman primate work that we did initially with AT-1501, so talking about the pharmacokinetics in nonhuman primates as well as reviewing data from our 2 toxicity studies that we did in nonhuman primates, a 12-week study as well as a subsequent 26-week study.

The 2 oral presentations, one of them is focusing on a presentation of our Phase 1 data of AT-1501, primarily in healthy volunteers, but we did have a cohort of ALS patients in that study. And again, focusing on safety readouts, pharmacokinetics, ADA responses, as well as we did do an immune challenge showing functional activity of the antibody in that study. And then the last presentation will be presented actually by Norma Kenyon, our collaborator at U. Miami, who has worked with AT-1501 in her nonhuman primate islet cell model, and she'll be presenting data on AT-1501 in combinations with other traditional immune modulatory drugs that are used in the context of transplant rejection, as well as presenting data with several doses of AT-1501 either as a monotherapy and presenting data on the ability of AT-1501 to prevent acute and long-term islet cell transplant rejection.

(Operator Instructions) Next question comes from Vernon Bernardino from H.C. Wainwright.

Just a follow-up on Matt's question. Steve, can you describe a little bit what the immune challenges and how it's done?

I mean, yes, there's a couple of different ways to do immune challenges. What we -- typically, it's done with any type of a foreign antigen. So tetanus toxin is one that's not uncommon. KLH is another one that's very common, and that's the one that we used. It's a protein that's derived from shellfish. And so you can imagine -- and we try to avoid people with this type of an experiment that actually have shellfish allergies -- but if you take a foreign antigen, like from shellfish, and inject it subcutaneously under the skin, it would generate a very acute hypersensitivity reaction because your body has never seen that protein before.

So the way these experiments are typically done, and we did it a little bit different, typically what one would do is enroll your subjects into the study. And probably 3 to 7 days before you do that foreign protein challenge, you would start treating them with your immune modulatory or immunosuppressive drug to start tampering (sic) [tamping] down their immune system, and then you come in and do your subcu challenge to see if you can block the body's immune system from recognizing that foreign antigen.

What we did in our Phase I study was actually quite more aggressive than that. We actually injected the KLH subcu at the exact same time that we did our IV infusion of AT-1501. And yes, we demonstrated the ability to completely block the immune system's recognition of that foreign antigen in 2 of 3 subjects, and we did get a pretty good attenuation even in that third subject. So under a very difficult challenge, it was the first data to show we had functional activity of AT-1501 in humans.

And so you'll do the same with the current ALS study; that is, on the same day?

So in the ALS study, we're not planning on doing any KLH challenges in that Phase 2 study in ALS.

Okay. And would that data for the new challenge serve as the result you would keep in mind as far as the results are concerned across the board as far as the different studies, ALS, renal and islet?

I mean the goal of the KLH study in the Phase 1 study was really to just show the first signs of functional activity for AT-1501 in humans. In our subsequent studies, we're more focused on disease-specific biomarkers to show functional activity. As I described in our ALS study, there's a couple of different biomarker components to that study, one of them being the ability to look at AT-1501 changing B-cell function. So as I described, when you block the CD40 ligand pathway, it has a dramatic impact on B-cell maturation, antibody production, class-switching. And one of the ways that you can measure that is markers of B-cell function, and one of them is CXCL13.

Another way to measure whether AT-1501 is having effects on ALS is to look at those proinflammatory markers that have been described in multiple studies that are elevated in people with ALS compared to healthy controls. And AT-1501, since it modulates the immune system, should have an impact on those proinflammatory markers.

Perfect. Looking forward to the ALS data at -- I mean the Phase 1 data at transplantation and continued progress with the ALS and progress in renal studies.

And there are no further questions at present time. Please continue with your presentation or closing remarks.

Thank you again to everyone for joining us on the call. We are pleased you could join us today to hear our progress during the first quarter, and we look forward to keeping you updated on our programs.

And all, that does conclude the call for today. We thank you very much for your participation and ask that you please disconnect your line.