Prothena Corporation PLC (PRTA) 2022 Q4 法說會逐字稿

Good afternoon. My name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the Prothena Corporation Fourth Quarter and Full Year 2022 Financial Results Conference Call. (Operator Instructions) Please be advised that this call is being recorded at the company's request.

I would now like to turn the call over to Mr. Eric Endicott, Prothena's Senior Vice President, Corporate Affairs and Communications. Please go ahead.

Thank you, operator. Good afternoon, everyone, and welcome to Prothena's investor conference call to review our business progress, our fourth quarter and full year 2022 financial results and our 2023 financial guidance. Please review the press release we issued earlier today, which is available on our website at prothena.com and is also attached to a Form 8-K filed today with the SEC.

On today's call, Dr. Gene Kinney, our President and Chief Executive Officer, will provide introductory remarks, followed by an overview of Prothena's portfolio and development strategy as we continue advancing toward becoming a fully integrated commercial biotechnology company. Following Gene's opening remarks, Dr. Hideki Garren, our Chief Medical Officer, will provide an overview of the significant achievements and progress made in 2022 across our entire portfolio. Tran Nguyen, our Chief Financial Officer and Chief Strategy Officer, will then review our financial results for the fourth quarter and full year of 2022 and will discuss our 2023 financial guidance. Gene will then provide closing remarks, and then we will open the call up for a Q&A session, where Dr. Wagner Zago, our Chief Scientific Officer; and Susanna Mesa, our Senior Vice President, Strategy and Operations, will also be participants.

Before we begin, I would like to remind you that during today's presentation, we will be making forward-looking statements that are subject to certain risks, uncertainties and other factors that could cause actual results to differ materially from those referred to in any forward-looking statements. For a discussion of the risks and uncertainties associated with our forward-looking statements, please see our press release issued today as well as our most recent filings with the SEC. We disclaim any obligation to update our forward-looking statements.

With that, I'd like to turn the call over to Gene.

Thank you, Eric, and thank you all for joining us today to review our 2022 financial results and business highlights. We're excited today to share Prothena's major achievements in 2022 and how we are advancing a portfolio of drug candidates targeting both neurodegenerative and rare peripheral amyloid diseases.

At Prothena, we are driven by our mission to create impactful treatments for the millions of patients that are affected by diseases caused by protein dysregulation. That mission is enabled by our deep scientific expertise, which serves as a unifying thread between our business strategy, our portfolio development and the dedication that propels Prothenians every day.

Turning now to Slide 5. Today, Prothena is a late-stage clinical biotechnology company with a robust pipeline, which includes 4 wholly owned programs and 5 partnered programs. This intentional mix allows us to build a diverse portfolio by leveraging partner payments while still maintaining full upside potential for our wholly owned assets.

For our Alzheimer's programs in 2022, we advanced both PRX012 and PRX005 into the clinic and expect to report top line Phase I multiple ascending dose data from both programs this year. For PRX123, we have completed several IND-enabling studies and look forward to submitting an IND by year-end. For our Parkinson's disease program, prasinezumab is being evaluated by Roche in both the Phase IIb PADOVA and open-label extension portion of the Phase II PASADENA study.

We also have 2 rare peripheral amyloid disease programs: first, birtamimab, a wholly owned program which is being evaluated in a confirmatory Phase III study; and NNC6019, formerly PRX004, which is being evaluated by Novo Nordisk in a Phase II study. Collectively, these achievements position us well for a transformational period over the next 24 months.

And finally, I will highlight that we remain well funded to execute on our strategic objectives. We ended 2022 with a strong cash position of $713 million, which included $40 million received for a clinical milestone from Novo Nordisk. Our partnership with Novo, together with our Bristol Myers Squibb and Roche collaboration and our wholly owned programs, allows us to advance our robust pipeline with blockbuster potential, further supporting our goal to address the unmet medical needs of millions of patients affected by diseases caused by protein dysregulation.

We believe that our focus on treating and preventing neurodegenerative and rare peripheral amyloid diseases addresses significant unmet medical need. Our clinical expertise and differentiated approach enables us to advance best-in-class therapies that have the potential to transform the treatment landscape for protein dysregulation diseases. Our focus on developing treatments for neurodegenerative disorders include therapeutic approaches for Alzheimer's disease and Parkinson's disease, which sadly are growing exponentially. Combined, these 2 diseases affect an estimated 60 million people globally, a number that is expected to increase rapidly with an aging population.

This tremendous social and economic burden is not only experienced by patients, but also by family members, caregivers and the overall health care system. In rare peripheral amyloid diseases, birtamimab and NNC6019 are being developed in targeted patient populations at high risk for early mortality, which underscores our commitment to develop therapies for patients with an urgent need for improved survival.

Before I turn the call over to Hideki, I would like to highlight several breakthroughs that occurred in 2022 that have meaningfully advanced the overall treatment landscape for Alzheimer's disease. Over the past several months, multiple milestones have been achieved in the Alzheimer's community. Notably, developments include the presentation last November at the Clinical Trials on Alzheimer's Disease or CTAD conference of statistically significant and clinically meaningful results across the primary endpoints and all key secondary endpoints from Eisai and Biogen's confirmatory Phase III Clarity AD trial for lecanemab, an antibody that targets amino-terminus of A-beta in patients with Alzheimer's disease to both clear plaques and neutralize soluble protofibrils.

In early January, lecanemab received accelerated approval from the FDA for the treatment of early Alzheimer's disease. Notably, the approval was based on Phase II data that demonstrated that lecanemab reduced the accumulation of A-beta plaque in the brain, which was noted by the agency as a surrogate endpoint reasonably likely to predict positive clinical outcomes. The results from Clarity AD plus the accelerated approval of lecanemab continues to support the A-beta treatment pathway in Alzheimer's disease and we believe pave the path for the next generation of plaque-clearing anti-A-beta antibody, including PRX012, a potential best-in-class subcutaneous treatment for Alzheimer's disease.

Another notable development at the CTAD conference was the many scientific advancements in the area of biomarkers. This included research from Dr. Randy Bateman's team at Washington University in St. Louis, which showed that cerebral spinal fluid levels of MTBR-tau-243 closely tracked with tau PET, distinguishing amyloid-positive individuals with tau tangles from amyloid-positive individuals without tau tangles. Hideki will cover this exciting data in more detail shortly.

At Prothena, we celebrate these advancements and also strive to create novel treatment that further improve efficacy and quality of life for patients. Finding solutions to treat and prevent this disease is crucial. This is why we are advancing one of the most robust Alzheimer's disease portfolios in the industry, guided by our comprehensive therapeutic strategy to address the unmet need in Alzheimer's.

Our portfolio is well positioned in light of these recent scientific advances in the field and positions Prothena as a leader in the transformation of Alzheimer's therapeutic approaches. We are currently advancing 3 product candidates, PRX012, PRX005 and PRX123, targeting key pathological pathways of the disease cascade, which have the potential to expand from next-generation disease-modifying treatment to combination and prevention paradigms.

With that, I'll now turn the call over to Hideki to highlight the progress made across our robust R&D portfolio in 2022.

Thank you, Gene. I'll start with PRX012, our next-generation, patient-centric subcutaneously delivered investigational treatment for Alzheimer's disease, which targets a key epitope at the amino-terminus with amyloid beta with high binding potency. Preclinical data have shown that PRX012 binds the amyloid plaques with very high avidity consistent with the potential for more effective A-beta plaque clearance at lower doses and currently approved NTA beta therapies, allowing for subcutaneous delivery in our clinical trials. PRX012 is designed with the patient in mind, and we believe it has the potential to be best-in-class, transforming the treatment of Alzheimer's disease.

In 2022, the FDA cleared the IND for this program and granted PRX012 fast-track designation for the treatment of Alzheimer's disease. We then successfully initiated a randomized, double-blind, placebo-controlled Phase I single ascending dose study, evaluating the safety, tolerability, immunogenicity and pharmacokinetics of PRX012 in healthy volunteers and in patients with Alzheimer's disease. The multiple ascending dose portion of the study has commenced, and we expect to report top line data from the initial dose study cohort by year-end 2023.

We look forward to having a significant presence at the upcoming 2023 International Conference on Alzheimer's and Parkinson's Diseases or AD/PD, which begins in late March. Among the planned events are an oral presentation featuring preclinical data showing the superior binding characteristics of PRX012 and a Prothena-sponsored symposium featuring key thought leaders. PRX012 oral presentation will show a superior binding of nearly 20-fold higher affinity and avidity with A-beta fiber when compared to lecanemab and substantially more extensive clearance of pyroglutamate A-beta in plaques of Alzheimer's disease tissue (inaudible).

Our goal with PRX012 is to offer greater patient accessibility and ease of compliance relative to approved therapies and other amino-terminus-targeted treatments currently in development. Compared to first-generation treatments, subcutaneous PRX012 is also expected to result in smaller fluctuations in antibody concentrations in the brain.

I would like to turn now to PRX005, our MTBR-tau-targeting monoclonal antibody. PRX005 is designed to be a best-in-class MTBR-specific anti-tau antibody. Tau tangles, along with amyloid beta plaques, are pathological hallmarks of Alzheimer's disease, and research indicates that tau pathology correlates with the clinical and cognitive decline associated with the disease. Early research conducted by Prothena found that targeting specific regions within the MTBR resulted in more consistent and robust production in the pathogenic uptake of tau into neurons and the downstream neurotoxic effects.

As Gene mentioned in his early remarks, Dr. Randy Bateman's presentation at CTAD 2022 shows MTBR fragment make up the bulk of tau tangles and the CSF MTBR-tau-243 correlated with tau PET imaging of the brain at a coefficient of 0.75. These are exciting data that further support the rationale for this target, and we'll continue to inform the team.

We recently reported top line data from the Phase I single ascending dose study evaluating PRX005 in 19 healthy volunteers. The results demonstrated dose proportion of drug concentrations in plasma with robust central nervous system penetration. Single doses from 3 dose level cohorts were generally safe and well tolerated, meeting the primary objective of the study. Exposure in cerebrospinal fluid was measured in the high-dose cohort and based on the robust exposure of PRX005 in the CSF, which is approximately 0.2% of peripheral levels, substantial target engagement is expected in the CNF. PRX005 had a desirable immunogenicity profile with no persistent PRX005-induced antidrug antibodies observed. We plan to present these results from the Phase I single ascending dose study at an upcoming medical conference.

The multiple ascending dose portion of the Phase I study is ongoing. The purpose of the Phase I multiple ascending dose trial is to evaluate the safety, tolerability, pharmacokinetics, pharmacodynamics and immunogenicity following the administration of multiple doses with PRX005 in healthy adults and in patients with Alzheimer's disease. We anticipate that these results will help us determine the appropriate dose level of the subsequent clinical studies. Top line results are expected by year-end 2023. PRX005 is 1 of 3 programs being developed in partnership with our colleagues at Bristol Myers Squibb.

For our third Alzheimer's program, PRX123, a dual A-beta/tau vaccine, we presented preclinical data at AD/PD 2022 that demonstrated the generation of anti-A-beta and anti-MTBR-tau antibodies that enable (inaudible) of A-beta and neutralization of pathogenic tau. We look forward to filing an IND for PRX123 by year-end 2023. This program is exciting because the combined knowledge and mechanisms of both amyloid beta and tau targeting in a single construct, potentially binding with the prevention as well as therapeutic strategy.

Turning now to prasinezumab in Parkinson's disease. In 2022, Roche, our partner for prasinezumab, presented data from the Phase II PASADENA study at AD/PD 2022. These data are compelling because they support a potential effect on delaying motor progression in Parkinson's disease. In addition to the PASADENA study, Roche is now conducting the ongoing Phase IIb PADOVA study in patients with early Parkinson's disease. Roche expects to report top line data from the PADOVA study in 2024.

Now I'd like to discuss the birtamimab program for the treatment of Mayo Stage IV AL amyloidosis. Certain treatments for AL amyloidosis target abnormal plasma cells to overproduce light chains. While these therapies can reduce new light chain production, they fail to directly address the amyloid that has already been deposited and is causing organ toxicity and organ failure. Birtamimab is differentiated and that is designed to deplete amyloid and soluble aggregates, most (inaudible) with organ dysfunction. Prothena has advanced birtamimab into the ongoing confirmatory Phase III AFFIRM-AL study in patients with Mayo Stage IV AL amyloidosis. Under our Special Protocol Assessment or SPA agreement with the U.S. FDA with the primary endpoint of all-cause mortality at a significant level of less than or equal to 0.10. Patient recruitment continues to be on track and the confirmatory Phase III of AFFIRM-AL top line data expected in 2024.

In December, at the American Society of Hematology 2022 Conference, we reported clinical data from the completed Phase III VITAL study, which demonstrated in a post hoc analysis of patients with Mayo Stage IV AL amyloidosis, a statistically significant survival benefit of 74% in patients taking birtamimab versus 49% of patients on placebo at 9 months. This reflects the hazard ratio of 0.413 and a p-value of 0.021. Survival benefit of birtamimab in VITAL remain consistent across all key baseline variables in Mayo Stage IV patients, reinforces the strength of the survival data in these patients at a high risk of early mortality. Birtamimab was generally safe and well tolerated in the overall population and in Mayo Stage IV patients.

And moving now to advancements in the ATTR amyloidosis program. PRX004, which has been developed by Novo Nordisk and has been renamed NNC6019, has now advanced into an ongoing Phase II clinical study for the treatment of ATTR cardiomyopathy. Novo expects to report top line data from the Phase II study in 2024.

At this time, I'd like to turn the call over to Tran for a discussion of our 2022 financial performance and our 2023 financial guidance. Tran?

Thanks, Hideki. Today, we reported results that were either in line or favorable to our 2022 financial guidance. Please refer to our press release for a detailed breakdown of our financial results.

As Gene mentioned during his opening remarks, last year, we strengthened our capital position. First, with our strong partnership with Novo Nordisk, where we received $40 million related to the Phase II trial of NNC6019 for the potential treatment of ATTR cardiomyopathy. Additionally, in December 2022, we received net proceeds of $172.4 million raised through an underwritten public follow-on offering of 3.25 million ordinary shares.

In terms of our 2022 financial performance relative to guidance, we had net cash used in operating and investing activities of $109.3 million, which was in line with our guidance of $108 million to $120 million. Net loss was $116.9 million, which was favorable to our guidance of $121 million to $137 million. As of December 31, 2022, Prothena had $712.6 million in cash, cash equivalents and restricted cash, which exceeded our guidance of $522 million. As of February 17, 2023, Prothena had approximately 52.6 million ordinary shares outstanding. Additionally, we continue to have a clean capital structure with 0 debt.

Turning to our 2023 financial guidance. We expect our full year 2023 net cash used in operating and investing activities to be between $213 million and $229 million. We expect to end the year with approximately $512 million in cash, cash equivalents and restricted cash, which represents the midpoint of the range. The estimated full year 2023 net cash used in operating and investing activities is primarily driven by an estimated net loss of $250 million to $275 million, which includes an estimated $46 million of noncash share-based compensation expense.

With that, I'll turn the call back over to Gene to discuss our upcoming milestones. Gene?

Thank you, Tran. Before we talk about our 2023 milestones, I want to first acknowledge and thank our talented Prothena employees for their ongoing commitment to advancing our protein dysregulation science to make a real impact to the patients and families we serve. I'd also like to thank the patients, their families, physicians and study site staff who participate in our studies. Without their support, we could not elucidate the potential impact of the new medicines we're developing.

Over the past year, our team has delivered on multiple milestones, further advancing Prothena as a leader in addressing devastating diseases caused by protein dysregulation. As you heard today, our dedication to our mission, combined with our diversified best-in-class portfolio and our scientific heritage and human talent, have made possible multiple meaningful achievements in 2022 and have positioned Prothena well for a transformational period ahead.

As new data becomes available on the clinical, regulatory and commercial landscape in the Alzheimer's field, we believe our programs are well positioned to revolutionize the care of patients suffering from this devastating disease. To that end, we can expect the following key milestones in 2023 and 2024.

First, preclinical data demonstrating the superior binding characteristics of PRX012 at the upcoming AD/PD 2023 Annual Meeting. Second, the multiple ascending dose portion of the Phase I PRX012 study has commenced, and we are on track to report top line data from the initial cohort by the end of 2023. Third, the Phase I multiple ascending dose study for PRX005 is ongoing, with top line data expected by year-end 2023, further elucidating the potential of targeting the MTBR-tau in treating Alzheimer's. Fourth, for PRX123, we are looking forward to submitting an IND by the end of 2023. Fifth, for prasinezumab, we expect that Roche will report top line data from the Phase IIb PADOVA study in 2024. Sixth, in our rare peripheral amyloid portfolio, we continue to enroll patients in our Phase III AFFIRM-AL study of birtamimab and continue to anticipate top line data from that study in 2024. And finally, for NNC6019, we expect that our partner, Novo Nordisk, will report top line Phase II data in patients with ATTR cardiomyopathy in 2024.

I am proud of the progress that Prothena has made in 2022. We have a robust portfolio with multiple wholly owned assets and strong collaboration. We are well capitalized, have a robust cash position and remain focused on executing during the next 24 months. We expect to make additional progress across our R&D pipeline this year, and we look forward to continuing to provide additional portfolio updates when appropriate.

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

(Operator Instructions) We'll go first to Michael Yee at Jefferies.

Thanks for the update. I'll keep it to 1 question. So PRX012, I think you've initiated the MAD portion in Alzheimer's patients at the first cohort later this year when you have data. Can you just describe what you're looking for after treating patients for 6 months? Are you looking for a certain level of amyloid PET reduction on PET? And how should we contextualize that data and try and compare it to other Alzheimer's antibodies like (inaudible)?

Yes, a really important question, Mike, and thanks for asking. So let me just start by saying that obviously, in the multiple ascending dose study, our primary objective, obviously, is to continue to establish safety and tolerability over the 6-month period. We'll be looking at PK, immunogenicity. And as you point out, interestingly, we'll be looking at the pharmacodynamic marker of brain amyloid reduction using PET as the tool to do that.

Maybe I can hand it first to Tran, and then maybe, Hideki, you can make a comment as well in terms of what our expectations are and how we're thinking about this first dose cohort relative to other examples of anti-amyloid agents that have shown amyloid reduction by PET. Tran?

Thanks, Gene. As you know, Mike, we targeted and modeled the first dose of the MAD Phase I to be at the C average concentration level, C average of the 10 mg per kg aducanumab. And so what we're saying is we believe the first initial dose level cohort will be active. But of course, and Hideki can go into this, we have other dose level cohorts to dial in an optimal dose for registrational trials later. But again, we're not looking for comparative data. We're looking for active data. And so we'll use the SAD data and also some from the MAD data to further elucidate doses behind the first dose.

Yes. And I'll just add, remember, this is a Phase I study. So the primary endpoint is safety. We'll, of course, look at pharmacokinetics and pharmacodynamics, as both Gene and Tran have alluded to. And importantly, we'll have additional dose cohorts to look at bracketing that dose.

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Just a follow-up on the question that was just asked. Could you give us a little bit more detail on exactly how many patients we might expect to see data for PRX012 later this year? And then also, if you can provide any color on -- just any more specifics on kind of exactly the metrics that you look at, whether you'll be able to provide us with metrics like the proportion of patients who are amyloid negative or whether we should expect to see results kind of on the Centiloid scale and how we should think about that?

Yes. Thanks, Neena. Great questions. So maybe I can hand it over to Hideki to talk a little bit about the multiple dose study design and some of the elements of that. And you can talk a little bit maybe, Hideki, as well about just some of the parameters that we're evaluating from a PET perspective.

Yes. So we have -- in this first cohort, we have enough patients in order to meet our endpoints, that being safety, pharmacokinetics and pharmacodynamics as measured by amyloid PET. We will also have MRI to look for any safety issues as well. And so those are the main parameters. We have optional biomarkers as well. So we'll have a very robust data set. Remember, again, that the primary endpoint is safety in this Phase I MAD.

And we'll also have enough patients in the cohorts, MAD cohorts to make a statistical analysis as it pertains to the amyloid PET data from a pharmacodynamic perspective. And we'll be looking at the -- basically, various analysis of Centiloids and SUVR reads.

Yes. I mean the other thing I'll just point out, Neena, as a follow-up to your question, is I don't want to lose sight of the fact that the single-dose data is something that we'll also be talking about this year. And we think that's of importance as well. As you know, with PRX012, given its binding characteristics and its development as a subcutaneous approach with the target product profile once-monthly subcu delivery, we think the single-dose data could be quite informative as well just to tell us how closely we've come to our target product profile. So we think all that data will be important. And again, the anticipation, we'll talk about that altogether.

And next, we'll move to Charles Duncan at Cantor Fitzgerald.

Congrats on a good year of progress. I also had a question on 012 and probably a two-part one. And that is that with regard to the single-dose data, could you be presenting that at AAIC or CTAD? And then the second, call it, part is, when you talk about subcu and being patient-centric, best-in-class, what exactly are you going to be considering to evaluate whether or not you hit that target product profile?

Yes. Thank you for the question. So first, I think with respect to where the data will be discussed, obviously, we will wait until we actually are able to speak to that. So clearly, that requires not just us targeting a certain meeting, but an abstract being submitted and being accepted. So typically, we wouldn't talk about where we would talk about those data until such time as we announce that publicly.

I think for the single-dose data, the current expectation should be that we'll speak about the single-dose data along with that first cohort of multiple dose data. So that's the current communication around that. So that's, I think, the right expectation to have currently.

I'll mention just from a subcu perspective, and maybe I can ask Wagner to talk about some of the characteristics of PRX012, which we think enables this -- it really is about the target product profile. And what we set out to do with PRX012 was to develop an antibody that by design would lend itself to subcutaneous administration. And that, of course, requires a number of key characteristics being met. That was an intensive screening campaign to develop antibodies with the right characteristics. And what we're looking for now in our clinical studies is obviously to understand if we've met that.

And at the highest level, what I would say is we're most eager to have a once-monthly subcu delivery that provides the same level of occupancy of A-beta as some of these first-generation antibodies, which may require much more intensive delivery because of their less optimal profile and characteristics. And so if you think about once-monthly subcu single syringe, that's really what we're going for. That's the optimal target product profile for us. We think that, that enables potentially patient access. So for patients that have a potential to advantage from these types of treatments, we want to make sure that patients can actually receive these types of treatments. And we think moving to that kind of target profile makes a lot of sense in that regard.

So maybe, Wagner, if you could, just a little bit of overview on some of the key characteristics that we looked at as we were developing and ultimately selecting PRX012 to meet that target profile.

Yes. Absolutely, Gene. So we -- for PRX012, we talk about affinity a lot. That's a very intuitive feature that if you increase the potency of an antibody, you can dose a much lower dose to reach the same level of target occupancy and the same level of clearance that other antibodies that are lower both would do. But for this to be subcu, an antibody requires additional features. It's not only to be more potent, but help you remember that this antibody is going to be delivered in a different compartment in the periphery. And from that compartment, from subcutaneous to the blood, there is a barrier.

So as Gene was saying, when we designed PRX012 and have you screen many, many antibodies, we included in the design and in the screen, all those additional features that a subcu antibody needs to have. One is bioavailability, stability not, only in the high concentration solution, but the stability in that same compartment where it's delivered. And all of that was part of the screening, in fact, that raised PRX012 to the top.

This is different than a campaign where you normally start with an IV antibody and trying to make it a subcu. You might encounter some challenges at that point. And we didn't want to because, as Gene said [X012] was born to be a subcutaneous antibody and with the risk in that preclinical. So as was said before, the importance of a Phase I for us, SAD to confirm that we -- that our assumptions preclinically are really in patients that bioavailability exposure, all of that is read very (inaudible) -- that's very important for us because we can tweak our models and ensure that the dose that we selected for the MAD, for example, are appropriate doses, that they are active, and not only that, that they are leading to a target engagement that will be meaningful for the target product profile.

We'll take our next question from Jay Olson at Oppenheimer.

Congrats on the progress. Can you talk about how you see the reimbursement landscape evolving for Alzheimer's therapeutics, especially with yesterday's comments from CMS and also since PRX012 is designed to be delivered as a subcu? And then also maybe in the context of your broader Alzheimer's portfolio with PRX005 and also your dual-tau amyloid vaccines.

Yes, Jay, really good question. Thank you. Maybe I'll ask Tran to also speak to this. But just as a quick kind of overview, I think the announcement yesterday, we felt, generally is encouraging. I think within the current NCD, the response to the Alzheimer's Association request to reconsider the prior decision, obviously, it was a little disappointing that, that wasn't entertained. But at the same time, I think it was encouraging that the -- that CMS came out and did suggest that on full approval, within the former NCD construct, they would look to think about almost immediate reimbursement in a much broader context.

So we think that's positive. We think that's a way to actually increase the reimbursement footprint in the near term while still having the ability to reconsider the full NCD moving forward. But that said, as you appropriately pointed out, a subcutaneous approach, particularly those that may be envisioned to occur in the home, could actually be in Part D as opposed to Part B in the Medicare scheme. And of course, that has different consequences with respect to NCD, national coverage determinations, and we think actually positions PRX012 quite well for potential reimbursement in that context.

I think the other question that you were kind of asking a little bit maybe around the accelerated approval pathway and what that continues to look like? And of course, we were encouraged by the accelerated approval of lecanemab, in particular, the fact that the basis of approval there was based on the Phase II data, and the basis of that approval was really on amyloid plaque reduction as measured by PET. So we think that, that accelerated pathway, from our perspective, provided that you can meet the key elements of the accelerated approval pathway, which is a serious disease and an unmet medical need, we think that, that continues and remains open and is a potential path for PRX012.

But at the same time, we're looking at our program in a holistic way. We're thinking about it end to end. How do we move this molecule forward through the clinic in a way that's most appropriately ambitious, but at the same time, provides us with the broadest data package on which to enter the commercial market? So we're -- we do think about that from an end-to-end perspective. But maybe, Tran, I can ask you to comment a little bit further on the decision yesterday that CMS kind of published and how you see the field.

Yes. No, I think just to build on what you said is, I mean, clearly, the letter pointed to the fact that they understood that there is more data, meaning how we read it was the Phase III data. I think during this review, they didn't look at that. What they said is in order to work expeditiously to get a broader coverage for patients, they wanted to work within the existing NCD and the CED that they put out there, and they have broadened that. What they basically communicated that they will broaden that upon full approval.

They do mention a registry. There is a registry that the Alzheimer's Association has. And so we'll see how -- what the details of that are. But at this point, they are broadening it. They're saying, "Hey, between review of full approval, we'll review the data." At least in that period, you'll get broader coverage potentially through a registry. And then after real-world data is collected and then after review of the Phase III data, they would go back and take a look at potentially changing that to something even broader than that.

And so I think what they were working with was do we start from kind of a 0, which is, okay, it will take 9 to 12 months for a new NCD process versus broadening through a registry. So we do see it as CMS working with FDA. And I think they understand that FDA's job is to approve or to make the decision on approval of lecanemab. And once that happens, they can then review the data and then do what they need to do. But again, we see that as very encouraging. And again, we'll work with regulators and to build out again on what Gene was saying about our path to patients.

There are potential paths forward for us that Gene just covered, but also ultimately, we need to talk to regulators about that. But again, we do feel that accelerated approval is based on unmet need. And as you know, there's millions of patients in the prodromal-to-mild stage of the disease. And we think that even according to Eisai's estimates of 100,000 patients in a year, after 3 years of marketing, that's an underpenetrated market, so to speak, and so there will be an unmet need. And we'll work hard to figure out what our path to patients are, and we'll come back and update you all when that happens. Thank you.

We'll go next to Brian Abrahams at RBC Capital Markets.

Congrats on all the progress. I'm curious, how are you guys envisioning the future dosing paradigm for Alzheimer's beta-amyloid antibodies? Do you think this will be finite dosing with amyloid checks, chronic dosing or some sort of induction maintenance? And I guess I'm curious how that might shape your 012 development strategy with regards to potentially enabling the most robust safety data set for potential accelerated approval.

Thanks, Brian. So yes, I think you're exactly right. There are a couple of different monoclonals out there that target slightly different species of amyloid beta and are talking about the dosing paradigms slightly differently. So I think from our perspective, as we think about targeting the most pervasive form of amyloid in the brain in its misfolded or dysregulated state, it is a chronic treatment paradigm. So I think we're aligned with, for example, many of the things that you hear from the folks at Eisai and some of the analysis that they've done, particularly from their Phase II data set where they had a gap year where they weren't dosing patients and actually showed that some of the key biomarkers were starting to revert back to worsening during that time.

I think there are other approaches out there that target a subspecies of amyloid beta posttranslational modification, where there may actually be less of that material in the CNS. And maybe I'll ask Wagner to comment on that as well. And I think under those conditions, it may make sense to stop treating after a period of time that, that particular species has been eliminated or at least substantially reduced. But that may not be true in the context of all treatments, and it may or may not lead in long term to a better treatment profile. I think that's something that we'll find out after longer longitudinal data sets have come in across multiple compounds and particularly multiple compounds that target A-beta in slightly different ways.

Our current view of the data is that chronic treatment is likely needed. The amyloid beta is a key toxic insult in the CNS in the context of Alzheimer's disease. Not only does it cause problems on its own, but leads dysregulation of other key proteins such as tau. One of the key reasons that we talk about PRX123 as a dual amyloid beta tau-targeting agent is because we do believe that those biologies are on target pathway. So we do know, for example, that amyloid beta can lead to tau dysregulation, which can lead directly to neuronal dysregulation.

So we do think that ultimately, A-beta will continue to provide a toxic insult if it's left unchecked. And therefore, it needs to be part of the foundational treatment as we think about disease modification. So maybe, Wagner, do you want to expand on some of that science?

Yes. Just to echo what you just said, Gene, I think the -- what determines the period of treatment is likely what the mechanism is. If you're -- if you have an antibody that binds to a multitude of toxic forms from all the very small [soluble aggregates] although (inaudible) amyloid, you likely need not about to be delivered chronically because those small toxic forms can be formed very quickly in the brain of patients, and you removed completely the most compact forms of the plaque, and that's what we visualize when we do a PET scan. It doesn't mean that you don't have amorphous material around that can accelerate the position of more amyloid and leaked more soluble aggregates .

If your antibody binds all those forms, all the pathogenic forms, we see that as a chronic treatment. Now if the antibody is binding to a post-translation modification that requires time to happen once you got rid of the initial material, then there is, of course, a lag between that and the formation of a new pathogenic form. So it probably wouldn't make sense to have an antibody around if you don't have the target. So again, it all depends on the mechanism of action of the antibody and then terminal antibody that binds to all pathogenic forms like lecanemab, like PRX012, we think that it makes perfect sense to position as a chronic treatment.

Just to build on what Gene and Wagner was saying is, clearly, we're going to follow the data here. I think the Phase III data from Clarity AD, given what Wagner just said about hitting all the species that could be pathogenic, not just maybe the posttranslational modification pyroglutamate A-beta. We know what that results in, in terms of the Phase III Clarity. We're excited to see the Phase III TRAILBLAZER II trial from donanemab, and we'll look at that data in terms of the trial designs they have where they dosed to amyloid negative and stop. So we'll see how that all affects clinical endpoints because I think that will be a great learning. And it will tell us how to design our registrational trials going forward.

And we'll move to our next question from Jason Butler at JMP Securities.

Just had 1 on PRX005. Just wondering if you could give some comments about what you're looking to take away from the MAD results later this year, I guess what you've taken from the SAD results in terms of target engagement and how you're thinking about it going forward, and how you think about biomarkers specifically, as you mentioned, how 243 CSF and how you could include that in the program?

Yes. Thanks, Jason. Good question. So I mean, first, just a little bit about how we got to the MTBR region. We were -- tau is a complex protein, right? It has 6 splice variants, over 440 amino acids and some of those variants. And so understanding how to target that protein in order to ameliorate some of the negative biology associated with it when it becomes dysregulated, it was quite important. I think the team under Wagner's direction did a great job in really looking at how you target that protein, really exploring amino-terminus targeting antibodies, carboxyl-terminus targeting antibodies.

It really was this key region within the MTBR region that ended up being something that gave us very consistent and robust biological effect. And so we were encouraged then when we started to see some really compelling work in the field, start to focus in on these MTBR region and the MTBR containing fragment. So for example, Marc Diamond's work suggesting that these MTBR fragments are critically important in the self-cell transmission of this regulated tau. And also, as we mentioned in the call, Randy Bateman work at WashU, really suggesting that when you evaluate these MTBR containing fragment in CSF, a much better track with not only tau PET, but also with potential level of dementia in patients with Alzheimer's disease. So we were encouraged by that.

To your question specifically in the multiple dose study, again, I'd be remiss, and Hideki would definitely correct me, if I didn't say that the primary objective of that study is safety, tolerability. But as you say, we are interested in looking at CSF target engagements. We're interested, in particular, in these MTBR fragments. And I don't know, Hideki or Wagner, if you want to speak to kind of the nature of the fragments that we'll be evaluating in the context of the potential pharmacodynamic effect in the central nervous system compartments here like CSF.

Yes. I'll just reiterate -- go ahead, Wagner, you go first.

Maybe on the identity. So we will provide the full detail of what fragments is here. But certainly, they are not different from the fragments reported as fragments that track well with the disease progression by WashU, for example. And it's a great opportunity for us. We have a very good understanding of what is the engagement of the target that we want to reach full potential for this antibody. So we use that as a confirmation of our assumptions for dose selection and activity in the brain as well. And the details about the assays that we're going to be using, we review that once we have the data and the full data set.

I just want to mention that we are extremely lucky that we found the MTBR domain of tau as being impactful via the screen. It was an empirical determination. But at the same time, the field developed to a point that today, we can measure MTBR in the CSF. Not long ago, it was a mystery why MTBR is not present in the CSF while the other fragments are? And it was a question of sensitivity. So now we are in a position where we have what we believe is one of or if not the best, anti-MTBR antibody that binds to multiple sites in the MTBR containing fragments. But also the assay that allows us to confirm that it has the activity that we designed antibody to have in the CNS. And with all of that, basically, you can make your recommendations for a phase to read out.

And I'm just going to add one more element. As these studies become bigger, there is another element that also helps us in decision-making, which is the availability of PET ligands for tau that we can use to track directly intracellular pathology. So all of that is part of the plan. But I'll let Hideki talk about it.

Yes. I just wanted to reiterate that we're very pleased with the SAD results that we announced earlier. It's very safe, tolerable, and in particular, the CSF data showed we have 0.2% penetration, which we're extremely pleased with, because that really indicates a substantial target engagement. And as far as the MAD data, as Wagner mentioned, we will have not only safety, but we'll have the CSF data in terms of MTBR engagement from the CSF and Alzheimer's patients. So that's all data we expect by the end of the year.

And at this time, there are no further questions. I will turn the call back over to Gene Kinney for closing remarks.

Well, thanks, operator. And I want to thank you all for joining us on the call today. We appreciate your interest in Prothena. And over the coming months, we look forward to sharing further updates on our programs. Thank you all.

That does conclude today's conference call. Thank you for your participation. You may now disconnect.