Alpine Immune Sciences, Inc.
Q2 2021 Earnings Call Transcript

Published: 10 Aug 2021

[Operator:]

Good afternoon, ladies and gentlemen, and thank you for joining the Alpine Immune Sciences Second Quarter 2021 Financial Results and Corporate Update Conference Call. Currently all participants are in a listen-only mode. Following management prepared remarks, we will hold a question-and-answer session. . As a reminder, this conference is being recorded Tuesday, August 10, 2021. I would now like to introduce Alex Sharif, Director, Investor Relations and Corporate Development. Please go ahead.

[Alex Sharif:]

Thank you, Mary. With me on today's call from Alpine Immune Sciences are Executive Chairman and CEO, Dr. Mitchell Gold; President and Head of Research and Development, Dr. Stanford Peng; Chief Financial Officer, Paul Rickey; and Chief Business Officer, Dr. Remy Durand. This afternoon, Alpine Immune Sciences issued a press release announcing the company's second quarter 2021 financial results and corporate update. If you have not received this news release and would like to read it or if you would simply like to be added to the company's distribution list, you can do both on the Investor Relations page of the company's Web site at www.alpineimmunesciences.com. During the course of today's conference call, Alpine's management will make forward-looking statements, including, but not limited to, statements regarding the company's preclinical and clinical development plans and the timing thereof, expectations regarding the sufficiency of cash to fund the operations, including any cash received from potential milestone payments under Alpine's collaborations, the timing and publication of future clinical data, expectations regarding Alpine's ongoing collaborations and potential future collaborations, including the anticipated strategic and financial benefits of the option and licensing agreement between Alpine and AbbVie for the development and commercialization of ALPN-101, or acazicolcept, Alpine's ability to successfully develop its product candidates and achieve milestones under its collaboration with AbbVie and others, and the financial and business outlook for Alpine. These forward-looking statements are based on the company's current expectations and inherently involve significant risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks, and uncertainties. Factors that could cause results to be different from these statements also include factors the company describes in the section entitled, Risk Factors in Alpine's quarterly filing on Form 10-Q for the period ended June 30, 2021 and filed with the SEC on or about August 10, 2021. Alpine cautions you not to place undue reliance on forward-looking statements and undertakes no duty or obligation to update any forward-looking statements as a result of new information, future events or changes in its expectations. With that, I will now turn the call over to Alpine's Executive Chairman and CEO, Dr. Mitchell Gold.

[Mitchell Gold:]

Thanks, Alex, and welcome to our second quarter 2021 financial results conference call. We had a highly productive second quarter with substantial progress made across our portfolio. We look to continue to build in our strong momentum and accelerate development of our pipeline of innovative therapies for patients living with cancer and autoimmune inflammatory diseases. Before Stanford provides a summary of the key updates for our three most advanced programs, I want to take a step back and highlight where the company sits today. When we founded the company over six years ago, we had a goal with targeting CD28, the key costimulatory ligand on T cells as a therapeutic approach both for oncology and for autoimmune diseases. In 2015, CD28 was seen as too risky a direct target given early experiences with monoclonal antibody was seeing near fatal cytokine storm. We believe the biology was too compelling and believed we could successfully engineer approaches that were both safe and effective. That resulted in development of ALPN-101, which we were firstly going forward by the generic name acazicolcept, or acazi, the dual inhibitor of CD28 and ICOS for autoimmune inflammatory diseases, and ALPN-202, our conditional CD28 agonist in oncology. Yesterday, CD28 came to the forefront in an all-day investor conference hosted by Bernstein focused on how to target CD28 in cancer. Stanford, along with the scientific leaders with two other companies and Mike Curran from MD Anderson, presented on CD28 as a therapeutic target. We believe the data from the programs at Alpine will support CD28 as being a rational and effective target, both in oncology and in autoimmune diseases. We are proud to have lit the CD28 torch back in 2015, and we look forward to continuing to carry it across the finish line to help patients in need of new therapeutic approaches. At the same time, we are strongly encouraged by the progress of our discovery platform beyond CD28 in the immunoglobulin superfamily. The ALPN-303 program, for instance, has demonstrated our ability to target the TNF superfamily as well. It has shown promising preclinical data, and we are particularly excited about this program. Stanford will go into more detail on this and review our most recent clinical progress across all of our development programs. Stanford?

[Stanford Peng:]

Thank you, Mitch. As Mitch mentioned, 2021 continues to be an exciting and productive time for us. Importantly, we were particularly pleased to successfully initiate Synergy, the Phase 2 study with acazicolcept in lupus. This is an international 24-week randomized, double blind, placebo controlled parallel arm study of approximately 130 participants with active disease. The primary objective includes safety and tolerability, but important efficacy assessments will include multiple traditional lupus disease activity endpoints, including SLEDAI and BILAG as well as clinical biomarkers of disease activity, such as anti-DNA and complement levels. Development activities for ALPN-202 are conditional CD28 cosimulator and dual checkpoint inhibitor has also been particularly eventful. We presented initial data from the ongoing dose escalation with monotherapy in advanced malignancies, the NEON-1 trial at ASCO in June. The drug has been very well tolerated with the most remarkable adverse events including Grade 1 or 2 immune-related adverse events, particularly cutaneous as of the date of cutoff date. Particularly interesting, immunophenotypic changes were observed in circulating T cells, including markers of activation and proliferation, increases in central memory T cells and reductions in Tregs. These findings were notable since they do not appear to have been reported previously and studied with combination nivolumab, ipilimumab suggesting a differentiated profile due to the CD28 mechanism of the drug. In addition, we are pleased to observe that the majority of participants derived clinical benefit as judged by a best response of stable disease are better, despite the population consisting of heavily pretreated tumors that are traditionally considered not immunologically responsive. The majority of this reported experience was on the weekly dosing schedule. Now we plan to complete dose escalation on the Q3 week schedule and choose a specific dose regimen, preferably Q3 week, for expansion cohorts, hopefully by the end of this year. For this program, we were also excited about entering a collaboration with Merck to study ALPN-202 in combination with pembrolizumab. This is a NEON-2 trial whose design is similar to NEON-1 with an abbreviated dose escalation and separate expansion part to patients with advanced malignancies that are either eligible for treatment with a PD-1 inhibitor, or otherwise have no standard therapeutic options. Although the addition of a PD-1 inhibitor to ALPN-202 might seem redundant at first, we have observed pre-clinically that such a combination can provide additional perhaps synergistic effects. We attributed this to the ability of PD-1 inhibitors to induce or upregulate PD-L1 expression on tumor and other immune cells, which in turn would differentiate the PD-L1 dependent CD28 costimulatory activity of ALPN-202. This combination study also facilitates the study of ALPN-202 in immune responsive tumors and earlier lines of therapy, helping to expedite the overall clinical development plan. We were pleased to initiate this study as well this past June. At the same time, as Mitch mentioned, we're particularly enthusiastic about our third development candidate ALPN-303, a dual BAFF/APRIL B cell cytokine inhibitor, which we are developing for lupus and other B cell mediated diseases. Our scientists received a Basic Science Award for their oral presentation on ALPN-303 at the recent EULAR E-Congress, which included a presentation of ALPN-303 superior potency and effectiveness in animal models compared to wild-type TACI-Fc fusion comparators. Studies in non-human primates demonstrated also superior PK/PD, which may translate into superior efficacy and/or a more convenient dosing regimen in humans. We're currently completing clinic-enabling activities and continue to target initiation of a Phase 1 study by the end of the year. I'll now hand the call over to our CFO, Paul Rickey, to discuss our financial results for the quarter. Paul?

[Paul Rickey:]

Thank you. As Stanford mentioned, in June, we initiated our Phase 2 synergy study as part of our AbbVie collaboration and achieved 45 million in pre-option development milestones. That deal provided an upfront payment to Alpine last year of 60 million and will have provided 105 million cash in the first year of our collaboration. There's still an additional 30 million in potential pre-option development milestones as we progress on our development plan and 730 million for option exercise and success-based milestones plus royalties as part of the overall deal value. Turning to our financial results for the fourth quarter. Alpine’s cash, cash equivalents and marketable securities totaled 100.4 million as of June 30, 2021, which does not include the 45 million in achieved AbbVie milestones, which we expect to receive in the third quarter. This compares to our cash balance of 115.4 million on March 31, 2021. Revenue recognized under our collaboration agreements was approximately 7.2 million in the second quarter of 2021 compared to approximately 0.7 million in the second quarter of last year. The increase was attributable to our revenue recognized under our AbbVie agreement. Research and development expenses were 14.6 million in the second quarter of 2021 compared to 7.1 million in the second quarter of last year. The increase primarily related to contract manufacturing and process development of our product candidates, ongoing clinical trial activities, direct research and personnel-related expenses. General and administrative expenses for the second quarter of 2021 were 3.3 million compared to 3.3 million in the second quarter of last year as well. Alpine recorded a net loss of 11 million in the second quarter of 2021 compared to 9.9 million in the second quarter of 2020. In terms of our cash runway, we expect that our cash on hand, combined with the 45 million in achieved milestones to be received in the third quarter and the potential 30 million in additional pre-option exercise milestones under our collaboration with AbbVie, is sufficient to fund our planned operations through 2023. With that, I will turn the call back over to Mitch.

[Mitchell Gold:]

Thanks, Paul. Looking forward to upcoming milestones, as Stanford mentioned, we plan to complete dose escalation for NEON-1 and the Q3 week schedule and choose a specific dose regimen for our expansion cohorts. We anticipate the initiation of our Phase 1 first-in-human trial for ALPN-303 in the fourth quarter of this year. This will be the first critical step towards establishing the potential best-in-class position for this program. As a reminder, ALPN-303 targets two B cell cytokines, APRIL and BAFF. We are particularly excited about this program because these are well validated targets. Inhibition of these cytokines is associated with highly robust reproducible PD endpoints even in healthy volunteers. As a result, we anticipate that the findings of our Phase 1 trial early next year could be a significant inflection point for the company. With that, we’ll now open the call for questions. Operator?

[Operator:]

. Your first question comes from the line of Ted Tenthoff from Piper Sandler. Your line is open.

[Ted Tenthoff:]

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

[Mitchell Gold:]

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

[Stanford Peng:]

Yes, sure. We continue to think in a couple of different ways. One is around tumor types that are historically refractory to PD-1 inhibitors or other checkpoint inhibitors since the mechanism 202 is designed to overcome that resistance, as well as also indications that have been historically immune responsive as 202 is designed to be superior to at least checkpoint inhibitor monotherapy. I'd say those are things that we're continuing to analyze in terms of the data from the ongoing study. And we'll be more prepared to answer that in more specifics when we finish dose escalation.

[Ted Tenthoff:]

Great. Thanks, Stanford.

[Stanford Peng:]

Thanks, Ted.

[Operator:]

Your next question comes from the line of Boris Peaker from Cowen. Your line is open.

[Boris Peaker:]

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

[Mitchell Gold:]

Stanford, do you want to take that?

[Stanford Peng:]

Sure. As you know, primary objectives in a dose escalation Phase 1 are mostly safety, tolerability. So a win for us is establishing a dose regimen that we’ll take into expansion cohorts. So, as I alluded to, we mostly have data that we reported out with Q1 week regimen. We're also evaluating a Q3 week regimen, which for various reasons, could be advantageous both from a convenience standpoint and perhaps also from sparing T cell exhaustion as well. So we'll be looking at that data carefully, as that data emerges from the escalation, and then make a decision.

[Mitchell Gold:]

The other thing I might add on to that Boris is, and this was highlighted in detail at the conference yesterday focusing on CD28 as a therapeutic target oncology, is that everyone's really looking at why is CD28 so different than dual checkpoint blockade alone? And I think what we're seeing from a PD perspective with ALPN-202 is very different and we're going to obviously get some information out of NEON-1 trial in that regard. We presented some of that data at ASCO, but obviously it's going to be a much more robust data set as we move that forward.

[Boris Peaker:]

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

[Mitchell Gold:]

Stanford, do you want to talk about that?

[Stanford Peng:]

Yes. We expect that to take at least a year, although that's something we're continuing to evaluate with the changes in the pandemic situation and how that will affect our operation. So I think we're cautiously evaluating that now. And Boris, just for clarity purposes, our plan is -- one thing is that we plan on completing dose escalation and defining our expansion cohorts by the end of the year. Obviously, we look to present it at a scientific conference going forward. Whether that's end of this year or sometime next year as the conference schedule allows, that's when it will be presented.

[Boris Peaker:]

Great. Thank you very much for taking my questions.

[Stanford Peng:]

Sure.

[Operator:]

Next question comes from the line of Mark Breidenbach from Oppenheimer. Your line is open.

[Mark Breidenbach:]

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

[Mitchell Gold:]

Yes. Well, I’ll take the second question first, Mark, and then I’m sure Stanford is going to want to comment on the first part. So in terms of ALPN-303, obviously we have a lot of enthusiasm for that. As I mentioned in my prepared remarks, these are well validated targets. And I think the healthy volunteer trail is going to give us some very instructive endpoints in terms of the impact that we're having in IgG and IgM. We anticipate that we'll start that trial in Q4. And we'll report data on that probably sometime in the first half of next year. So it will come in relatively quickly. In terms of NEON-2, Stanford, do you want to talk about that a little bit?

[Stanford Peng:]

Sure. Hopefully, by the first half of next year, I would say, but, again, we're just getting started with that trial. So I think we'll have to get a better estimate of the operation of recruitment and so on more likely in a couple of months. So assuming all goes as planned, we could potentially get through that just as quickly as we did with NEON-1, because it isn’t an abbreviated dose escalation compared to NEON-1. But as I said, the operational aspects are shifting and we just want to acknowledge that.

[Mark Breidenbach:]

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

[Mitchell Gold:]

Stanford?

[Stanford Peng:]

Yes, it's pretty well documented and I guess validated, if you will, that APRIL and BAFF cytokines play a role in B cell population development as well as immunoglobulin secretion or the production of circulating immunoglobulin. So with prior wild-type TACI-Fc fusion that have been in the clinic before, there are actually published healthy volunteer data that are consistent with each other showing that you're getting approximately 10% to 20% reductions in IgG and IgM with a single dose. So we're going to be targeting at least that amount to be able to know what dose levels of 303 or dose regimens of 303 would be predicted to be at least be able to match that and then also hopefully exceed those type of PD outcomes.

[Mark Breidenbach:]

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

[Stanford Peng:]

Thanks, Mark.

[Operator:]

Your next question comes from the line of Joe Pantginis from H.C. Wainwright. Your line is open.

[Joe Pantginis:]

Hi, guys. Good afternoon. Thanks for taking the question. I want to start on CD28 concept. Obviously, this is a molecule that's been around for a long time. And I guess I'll frame my question in the following manner. When you look at I-O and I-O approaches, there's always an underlying or percolating concept of being concerned about immune-related adverse events. So, Mitch, I'll use a phrase you used earlier with regard to the rational targeting of ALPN-202. Do you think that helps reduce the risk for IRAs, especially as you're getting to the point where you're looking to choose your final regimen?

[Mitchell Gold:]

I’ll let Stanford talk a little bit on dosing. But what’s really exciting about this conference that we participated in yesterday was everyone acknowledged that. There was a lot of fear in going after CD28. I don't think anyone doubted that it was going to be powerful from a biologic perspective. But your early experience with antibodies that it targeted I think made a lot of people kind of stay away from it. We felt like whenever you see biology that's powerful, you want to find ways to engineer around it. And obviously us and obviously working in this space. We're pretty excited about what we're seeing. And it's clearly differentiated from what you're seeing with checkpoint therapies alone. Stanford, do you want to take the second part of that question?

[Stanford Peng:]

Yes. Let me try maybe to clarify. You mean concerns about having 28 on top of checkpoint inhibition for adverse events. Is that the gist of your question?

[Joe Pantginis:]

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

[Stanford Peng:]

Yes. I guess in that regard for the design of 202, we've been actually quite pleased that how well the drug has been tolerated, despite the many concerns that even our own team had in design of the molecule that we wanted to make sure that it was controlled CD28 activation in the tumor microenvironment and so on. So from that perspective, it's been pretty reassuring to see the progress so far in the clinic. That being said, what we reported out has been primarily the lower doses. So we're quite eager to see how things go as we go to higher doses with the drug. But another way to look at it though is that the checkpoints primarily seem to work through 28. So PD-1 works by inhibiting the CD28 signaling. CTLA-4 works primarily by being a decoy receptor for the CD28 ligands, CD80, CD86. So they're really taking the brakes off of CD28 and 202 provides like an active signaling or the gas, so to speak on CD28. So it's also possible that we're not necessarily going to amplify it exceedingly so in terms of excess physiology, but rather potentially the effects in the tumor space, potentially the desired effects on T cells in the tumor space.

[Joe Pantginis:]

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

[Stanford Peng:]

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

[Joe Pantginis:]

Got it. Thank you very much, guys.

[Stanford Peng:]

Thanks, Joe.

[Operator:]

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

[Mitchell Gold:]

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

[Operator:]

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