Alterity Therapeutics Limited
Q2 2021 Earnings Call Transcript

Published: 25 Feb 2021

[Operator:]

Good morning, and welcome to the Alterity Therapeutics H1 Financial Results and Business update. . Today's call is being recorded. And I'd like to introduce you to our host, Dr. David Stamler, Alterity Therapeutics Chief Executive Officer. He is joined by Mr. Geoffrey Kempler, Founder and Chairman; and Ms. Kathryn Andrews, the company's Chief Financial Officer. Over to you, Dr. Stamler.

[David Stamler:]

Well, thank you, Greg. Good morning to our investors in Australia, and good afternoon to our investors here in the United States. Thank you for joining our call to discuss the first half year financial results and, more importantly, as a development stage company, our progress during the 6 months through December 2020 and during the first 2 months of this year.

[Kathryn Andrews:]

Thanks, David. As a development stage biopharmaceutical company, Alterity has no revenue to report, noting the Michael J. Fox Foundation grant just referenced by David will fall into our end-of-year full year results. Our results were very much in line with our expectations and budget. The key details for you to be aware of are an operating loss of $8.6 million and a net operating cash outflow of $7.3 million for the period. In relation to our cash burn, this was in line with expectations and reflects the preparatory work underway for further clinical trials for 434. Of note, we have in the past recorded the receipt of an R&D tax incentive rebate in our half year cash flow results. Eligibility for this rebate for the last financial year is currently under assessment. Importantly, our cash position is $35 million as at December 31. This was buoyed during the year with a $35 million capital raising to Australian and international institutions and other unrelated sophisticated, professional or exempt investors. The placement was fully subscribed, and we welcome to the register some significant Australian, U.S. and European institutional investors. The interest in the capital raising was certainly another validation of both the progress we've made and the potential for Alterity in the future. The proceeds from this placement are being used to progress Alterity's clinical development program for ATH434, including the bioMUSE natural history study and a Phase II trial, both in MSA patients as well as ongoing research and discovery and working capital. That concludes our presentation. I'll now hand back to our operator, Greg, who will facilitate the Q&A. We've received a large number of questions and have, therefore, grouped some of these together where they cover the same or similar content. Thank you, Greg.

[Operator:]

. Our first question to the team is how is the preparation for ATH434 Phase II trial going?

[David Stamler:]

So, hi, this is David Stamler again. Things are going quite well. As I mentioned in my presentation, we received feedback in the first half of last year from the U.S. FDA, and we've been in the midst of receiving feedback from European health authorities over the last several months. We expect this to conclude and to provide some guidance on our European regulatory advice in the near future.

[Operator:]

Are you expecting further peer-reviewed and published research on ATH434?

[David Stamler:]

Yes, we are. We continue to investigate both the mechanism of 434 as well as its potential use in animal models. And we do expect that later this year, we will be able to publish data on recent animal work and continue to present information on the mechanism of action of how 434 achieves its efficacy.

[Operator:]

Are you planning to do mitochondrian-level studies? Is this necessary?

[David Stamler:]

Yes. So this is an interesting question. Given the role of iron in cellular energy production, we are well aware of the potential impact of 434 on the mitochondria, which many people refer to as the powerhouse of the cell. So as we interrogate the mechanism of 434 with our external consultants, we are looking at establishing various cellular models to assess mitochondrial function. And as we accumulate information, we will release this accordingly.

[Operator:]

Have you confirmed any participation in scientific congresses?

[David Stamler:]

Yes. We continue to get significant interest from basic science and neurology conferences surrounding our compounds and our programs. As a matter of fact, the 7th international MSA conference, which is being held in Japan virtually, commences in the next day or so. And we will actually make an announcement about the presentation of some interesting new safety data at that conference. In addition to that, we do have upcoming presentations at the American Academy of Neurology, and we do expect to be presenting data at the movement disorder conference later this fall.

[Operator:]

Another question was, is there any general interest in Alterity's technology with big pharma?

[David Stamler:]

Yes. We've historically had ongoing discussions with several pharma companies, many of them are large companies that tend to look to small biotechnology companies for their novel research. These discussions have been ongoing. And we continue to keep in touch with these partners who are very interested in our work. So yes, I'm enthusiastic and expect that these collaborations may ultimately lead to an excellent partnership.

[Operator:]

A further question submitted was that it was good to see new application for PBT2 in treating antibiotic-resistant infections. Do you have any other estimates of the market value? And could this be bigger than ATH434 in the U.S.?

[David Stamler:]

So we are very excited to evaluate the program of PBT2 to combat antimicrobial resistance. It represents a unique opportunity, and it certainly addresses a very large unmet clinical need. As many have read in the press recently, antimicrobial resistance both in the hospital setting as well as in the community setting is becoming -- increasingly becoming a problem, brought into further focus by the bacterial infections typically acquired in patients who are afflicted with COVID-19. So we do believe there is significant potential here, although we haven't determined the clinical path forward as yet. And until we do that, we won't be able to assess a market value. One of the things to note is that as we do contemplate beginning a development program in this area, given the level of interest that there is in combating antimicrobial resistance, we very well may seek nondilutive funding to support these programs. But there's no doubt that there's tremendous interest in the medical and scientific community to address this problem.

[Operator:]

Alterity's very promising lead compound PBT2 was put into a partial clinical hold by the U.S. FDA for Alzheimer's. How will this affect future trials for PBT2, particularly as we look to antibiotic resistance?

[A - David Stamler:]

Yes. Well, this is an important question for us to consider as we chart our development path forward. The prior nonclinical data is well aware to the entire development team. And we will certainly take some of the prior feedback from the FDA into account as we determine our clinical plan. But rest assured that once a clinical plan is determined, part of that process will be to address the partial clinical hold and to overcome the nonclinical findings that interfered with the development of PBT2 for chronic administration.

[Operator:]

A further question asked was, what are the plans to progress new compounds that fall under the new patent?

[A - David Stamler:]

Yes. Well, this is an ongoing effort from our discovery chemists and our Head of Biology. We've got a very clear plan in place to take the novel compounds that have been identified in our recently issued patent and evaluate them, try to optimize them from a pharmacology standpoint and also to try to modify them and assure their metabolic stability. And this program is underway, and as we will progress with identifying compounds that meet certain milestones, we will introduce them into different nonclinical models. So things are progressing nicely. And as we have new information to share, we will bring that forward.

[Operator:]

. As we have no further questions, I'd like to hand back to Dr. Stamler for concluding remarks.

[End of Q&A:]

[David Stamler:]

Well, thank you, Greg, and thank you all for joining today's call. We're committed to holding biannual conference calls and appreciate the level of interest expressed in our call today. We are certainly very pleased with the progress we've made in the first half of this year, and we're excited to see the opportunities for ATH434 and PBT2 into the future. Have a good day to those in Australia, and good afternoon and evening to our investors here in the United States.