Alpine Immune Sciences, Inc.
Q3 2020 Earnings Call Transcript

Published: 12 Nov 2020

[Operator:]

Good afternoon, ladies and gentlemen. Thank you for joining the Alpine Immune Sciences' Third Quarter 2020 Financial Results and Corporate Update Conference Call. Currently, all participants are in a listen-only mode. Following management's prepared remarks, we will hold a Q&A session. As a reminder, this conference is being recorded today, Thursday, November 12, 2020. I would now like to introduce Laurence Watts, Investor Relations. Please go ahead.

[Laurence Watts:]

[Mitchell Gold:]

Thanks, Laurence, and welcome to our third quarter 2020 financial results conference call. In the third quarter, we built upon the strong momentum created through this year, which included our Option and License Agreement with AbbVie for worldwide rights to ALPN-101, advancement of ALPN-202 into the clinic, and the completion of an additional financing with top tier biotech investors, through a private placement. As Paul will highlight, these events provide us with a strong balance sheet that allows us to execute on development of our three promising, and diverse programs. As a reminder, the AbbVie deal provided an upfront payment to Alpine of $60 million, with up to an additional $75 million in potential pre-option payments related to development of ALPN-101. We continue to invest in our pipeline of novelty, particularly excited about our latest development candidate ALPN-303, dual B cell cytokine antagonist of both, BAFF and APRIL for the treatment B cell mediated autoimmune and inflammatory diseases. We believe that these targets have attracted increasing investor interest, and we believe ALPN-303 has a potential best-in-class profile for fusion proteins targeting these B cell related pathways. One of the most exciting aspects of the company are the new Alpine-inst we have got on board. I'm confident that they will be significant contributors to our goals, and I'm proud to be on this expedition with a deeply experienced and committed team. With that, I'll now turn the call over to our President and Head of R&D, Stanford Peng to provide a more detailed update on our research and development programs, Stanford?

[Stanford Peng:]

Thank you, Mitch. As a reminder, ALPN-101 is our first-in-class dual inhibitor of the CD28 and ICOS co-stimulatory pathways. We originally developed it for multiple potential autoimmune and inflammatory diseases and are currently focused on systemic lupus erythematosus as part of the AbbVie collaboration. Over the past quarter, we have reached an agreement with AbbVie regarding the design of an international safety focus Phase 2 study in adults with active lupus. We have successfully received U.S. FDA IND clearance and expect that the study will commence in the first half of next year. ALPN-202 is our first-in-class conditional CD28 co-stimulator and dual checkpoint inhibitor. We are pleased to report steady progress with NEON-1 its first in-human study in advanced malignancies.

[Paul Rickey:]

Thank you, Stanford. Turning to our financial results for the third quarter, Alpine's cash, cash equivalents and marketable securities totaled $141.3 million as of September 30, 2020. This compares to our balance of $90.5 million as of June 30, 2020. Revenue recognized under our collaboration agreements was approximately $1.9 million in the third quarter of 2020, which primarily relates to our recent collaboration with AbbVie, compared to approximately 300,000 recognized in the third quarter of the prior year. Research and Development expenses for the third quarter of 2020 were $6.2 million, compared to $9.5 million for the third quarter last year. It changed primarily relates to a higher prior year cost to cover our healthy volunteer study for ALPN-101, and the manufacturing of drunk product for ALPN-202, offset in the current quarter with cost for our NEON-1 study. General and administrative expenses for the third quarter of 2020 were $2.7 million compared to $2.5 million for the third quarter last year, staying relatively flat. Alpine recorded a net loss of $6.1 million this quarter compared to $11.5 million for the third quarter of 2019. In terms of our cash runway, we expect that our cash on hand combined with the potential $75 million in pre-option exercise milestones under our collaboration with AbbVie are sufficient to fund Alpine's planned operations into 2024. With that, I will turn the call back to Mitch.

[Mitchell Gold:]

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

[Operator:]

Thank you. We have a question coming from line of Boris Peaker from Cowen. Your line is now open.

[Boris Peaker:]

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

[Mitchell Gold:]

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

[Stanford Peng:]

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

[Mitchell Gold:]

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

[Boris Peaker:]

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

[Mitchell Gold:]

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

[Boris Peaker:]

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

[Mitchell Gold:]

For sure, Stanford, you want to say that?

[Stanford Peng:]

Yes, so there's a three different molecules you mentioned and I'll go through each of them. So, Benlysta is a monoclonal antibody that targets bass, and only bass, whereas ALPN-303 targets both epo and bass, which are to B-cell cytokines that bind to three B-cell receptors. So, the major differentiation point of molecules that are derived from TACIs like 303 is that they also get this second cytokine APR whereas Benlysta only addresses bass. Telitacicept does also hit the APR in addition to bass.

[Boris Peaker:]

Great, thank you for the answers to my questions.

[Remy Durand:]

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

[Operator:]

Thank you. Your next question comes from the line of Mark Breidenbach from Oppenheimer. Your line is now open.

[Mark Breidenbach:]

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

[Mitchell Gold:]

Yes. Hi, Mark. I’ll ask Stanford take that for you.

[Mark Breidenbach:]

Sure.

[Stanford Peng:]

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

[Mark Breidenbach:]

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

[Mitchell Gold:]

Yes, Stanford, do you want to take in and then I'll kind of add on.

[Stanford Peng:]

Yes, so we do have -- we do -- we are looking at baseline tumor biopsies for a number of different potential biomarkers of response to ALPN-202. During escalation we've made biopsies optional on study. But that you know is to be discussed as we move into expansion cohorts and other further analyses. I would say, in terms of the number of subjects we hope to see, that kind of depends on what kind of safety and/or efficacy findings we make and also in what particular disease types. Since as you know, in different tumor types you may -- we may need larger numbers of patients to better draw definitive conclusions. So, I'm afraid it's a little wishy-washy but because we're enrolling multiple types of tumors. It's kind of hard to predict right now based on what we're seeing.

[Mitchell Gold:]

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

[Mark Breidenbach:]

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

[Mitchell Gold:]

Well, it's not like the Benlysta, Benlysta is a monoclonal antibody. However, for telitacicept, we don't actually know what the structure of their Fc is -- publicly, in the public documents we seen it stated to be IgT derived se, but whether it's an IgT1 or IgT4 et cetera. We're -- we -- I don't know. At least they haven't been verified definitively. Yes.

[Mark Breidenbac:]

Okay. I think Benlysta is an IgT1, I could be wrong, but I was just curious. Thanks for taking the questions.

[Mitchell Gold:]

Thanks Mark.

[Operator:]

Thank you. Your next question comes from the lineup that Ted Tenthoff from Piper Sandler. Your line is now open.

[Ted Tenthoff:]

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

[Mitchell Gold:]

Yes. Hi, Ted, and thanks for the question. It really is very transformative for us on a number of different levels. One, it allows us to execute on our two ongoing clinical programs and then bring ALPN-203 into the clinic on a round where we can get meaningful data from that. But it really as I mentioned in my prepared comments brought on a whole group of people into the company that are really top tier, and allows us to invest in our discovery pipeline, which we're very excited about. We know that this platform is directed evolution platform can be very productive since it's already spun-off, re-programs with ALPN-101, we've seen early signs of clinical validation. I think we're pretty excited about what the future holds for the platform kind of coming out of our discovery pipeline, where we'd guide you towards is, we have two programs already in autoimmune and inflammation, I think you should expect the next program to come out of our discovery platform will be focused on the IO front side.

[Ted Tenthoff:]

Great, Mitch, that super helpful. Thanks so much.

[Mitchell Gold:]

Thanks, Ted.

[Operator:]

Thank you. Your next question comes from the line of Robert Driscoll from Wedbush Securities. Your line is now open.

[Unidentified Analyst:]

Hi, there. This is an Akshay for Rob. Just quick finance question. Was there milestone IND associated with IND clearance or maybe what are the next couple of curved ones?

[Paul Rickey:]

It probably would have been disclose able events, what we've said publicly so far is their $75 million in pre-option milestone payments. They're divided roughly equally. As Stanford, mentioned the U.S. IND has been cleared and we expect enrollment to begin in the first half of next year and beyond that we're not going to comment -- when we trigger or hit the milestone, we'll make that publicly known.

[Unidentified Analyst:]

Got it. Okay. Thank you.

[Operator:]

Thank you. Your next question comes from the line of Wangzhi Li from Ladenburg. Your line is now open.

[Wangzhi Li:]

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

[Laurence Watts:]

Yes. Stanford do you want to take that?

[Stanford Peng:]

So it's an accelerated titration design in the first few cohorts and then changes to a three plus three. So the accelerate titration is to get us out of the theoretically low dose -- theoretically non-pharmacological active dose ranges. And then allow us to explore in a traditional 3 + 3 design in levels that we expect to have some type of pharmacodynamic activity.

[Wangzhi Li:]

So this 3 + 3 cohorts are you allowed to new patients simultaneously?

[Stanford Peng:]

Well, we're doing we're doing Sentinel dosing during our cohorts. But the actual strategy of the Sentinel dosing varies from cohort to cohort.

[Wangzhi Li:]

Got it. Okay. That's helpful. And then my last question is, 3 + 3could you reminded me the timing or IND?

[Stanford Peng:]

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

[Wangzhi Li:]

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

[Stanford Peng:]

Thanks Wangzhi. Appreciate you getting on.

[Operator:]

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

[Mitchell Gold:]

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

[Operator:]

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