Axovant Sciences (NASDAQ:AXON) Morgan Stanley 15th Annual Global Healthcare Brokers Conference Call September 12, 2017 10:35 AM ET
David T. Hung - CEO
Jessica - Morgan Stanley
Good morning. We are very pleased to have David Hung, Chief Executive Officer of Axovant, here today. So David, you joined the Company back in April, after having obviously very successfully built Medivation. What attracted you to Axovant and what have you done in the past several months to focus the activities of the Company?
David T. Hung
So, I came to Axovant because I'm very excited about this field, Alzheimer's disease. I think it is really one of the most important diseases in medicine. If you look at just – cancer obviously another really important disease, when you look at cancer, today there are about 159 drugs approved for treatment of metastatic cancers. There's four for Alzheimer's disease. So, there's just a dramatic difference in the unmet need. And if you look at the cost of society of Alzheimer's today, at more than $260 billion, more than double the cost of all cancers.
So, I think it's just a really important disease. It's been a graveyard for drugs. So, I just think that Axovant has a portfolio of compounds that I think has real promise, I was excited about them, and I just really think it's an important area to get into. So I made the decision to come here.
Since I have joined, we have done a lot of things at the Company. We have been – first of all, just trying to get my own hands around all the data and all the things that are going on at the Company, but we have made now a number of very key senior management hires. It's probably the thing we've done the most, really building out the team and trying to make sure that we are well-positioned going into MINDSET data readout and hopefully preparing for what we hope to get to, which will be a commercial launch.
Okay, good. So let's start with intepirdine and I guess before we go into the clinical database you have and clinical trials that are expected, perhaps we can touch on the mechanism with the 5HT6 and understand that?
David T. Hung
So the four drugs that are currently approved for Alzheimer's, three of them inhibit an enzyme called cholinesterase which degrades one of your most important neurotransmitter called acetylcholine. So just based on the three of the four drugs that are approved for Alzheimer's today, we know that acetylcholine is an important and validated target for Alzheimer's disease. If you could make it go up, it's a good thing.
Intepirdine makes acetylcholine go up in a different way. Instead of inhibiting its degradation, intepirdine actually causes more acetylcholine release. So it's a new mechanism, which I like, but it's also the same target, which I also like, because it's a target that we know is valid, but it just does it in a different way. So, instead of making the leak in your cup smaller, this is adding more juice to your cup. So I think that's an important distinction.
So that's what we think that this drug will show a benefit on top of the standard of care, which is cholinesterase inhibition. We did show a benefit on top of cholinesterase inhibition in our Phase 2 study, and we hope to replicate that in our Phase 3 study.
Perhaps you could just mention what you saw specifically in the Phase 2 trial, and then how you decided to design the Phase 3?
David T. Hung
So our Phase 2 study was actually a pretty large study with 684 patients and we randomized three arms. It was the standard of care alone, which is donepezil. And then on top of that a 13 mg dose of intepirdine and a 35 mg dose of intepirdine on top of the standard of care. And what we've shown in that Phase 2 study was that we hit both the ADAS-cog and the Activities of Daily Living score with statistical significance, p-values of 0.013 and 0.024 on those two endpoints. And this was in a mild-to-moderate population.
So based on those data, we chose to follow the cardinal rule of drug development, which is to make sure you replicate in the Phase 3 what you did in Phase 2. So, we just did a Phase 3 study that really tried to capture the same design as Phase 2. So, same dose, 35 mg, which was the dose that we hit statistic on, same population, mild-to-moderate patients, but just a lot larger. So we have now enrolled 1,315 patients, so about 650 patients per arm versus Phase 2 where we had 684 divided in three arms, so a little over 200 per arm. So this Phase 3 study is quite a bit larger and more highly powered than the Phase 2 study.
Great. So I know we are expecting MINDSET data to readout shortly. What type of top line data would you plan to be made?
David T. Hung
So we would expect to put out the primary endpoints, with the co-primary endpoints of ADAS and ADL. So we would expect to announce the data on those two primary endpoints with known deltas above the control arm as well as p-values. I think that's probably what we would expect, and also a general statement about safety.
But we do have a slot reserved at a major medical conference coming up in November, CTAD, in Boston on November 3. So, we would expect to present a more comprehensive data set there. And clearly we have to be careful about how much we present because our goal is to publish these trial data in a major journal if it is positive. So we'll have to balance kind of our disclosures with how much data we want to save for publication.
Right, okay. And assuming a positive trial result, what is the registration strategy then?
David T. Hung
So our goal is to try to file an NDA as quickly as possible. And given the fact that there has been no Alzheimer's drugs approved in nearly 15 years, we expect the agency to be very helpful to us to work through this process to try to get this drug approved as quickly as possible. We have had a lot of interactions with the agency. And so, I think we're already [excited] [ph] with this data and hopefully we can get to the point where we could submit an NDA.
Great, good. And perhaps before we leave the Alzheimer's application, the intepirdine aspect, you can talk about the Lundbeck product in terms of what we have seen there and any potential read through?
David T. Hung
So Lundbeck had another 5HT6 antagonist called idalopirdine, and they had again a very robustly positive Phase 2 study, but they failed in Phase 3. I think the important thing to note about the Lundbeck Phase 2 study was, number one, it was quite a bit small than our Phase 2 study, so it was 278 patients, ours was 684. But number two, the Lundbeck dose used in Phase 2 was 90 mg a day, given as 30 mg three times a day or every eight hours.
The reason that was really important for Lundbeck is because their drug has about a 10-hour half-life. Unfortunately, when they went to Phase 3 – they had a very nice result in Phase 2 hitting their ADAS-cog endpoint, but when they went to Phase 3, because there were some adverse events that were related to their drug specifically, they lowered the dose in Phase 3 from 90 mg a day to either 10 mg, 30 mg or 60 mg a day, so that's quite a significant difference in dose, but even more importantly, that 10, 30 or 60 mg a day was given as a once-a-day dose as opposed to three times a day.
So now you're talking about a drug that has a 10-hour half-life, and if you're not dosing it around the clock, in Phase 2 they did it every eight hours which got them a really beautiful 24-hour coverage, but if you're now taking a 10-hour half-life drug, giving it once a day, that means for more than half a day you are at a blood level that is less than half the dose you started with. So, I think that that is a significant issue for their study, and I think that because of that it doesn't really allow the Lundbeck Phase 3 data to be extrapolated to intepirdine's Phase 3 trial.
And then, AIC, when Lundbeck did present their three Phase 3 studies, actually interestingly enough if you look at the study where they had the highest dose, where they didn't use the 10 or 30 mg dose, and if you do the subset analysis in that study, they actually showed a statistically significant benefit on the ADAS-cog in the moderate dementia subset of their trial.
So, that's actually a new thing at Lundbeck as you did have a signal in their study, but it was so diluted by these lower doses and this once-daily dosing, which was clearly not the dosing that was called for given their drug half-life.
All right, okay, thanks. They didn't follow the cardinal rule.
David T. Hung
They broke the cardinal rule. I think that it's absolutely critical, if you have a Phase 2 result, you just got to do the same thing in Phase 3. It's logical. And unfortunately, amazingly, a lot of companies don't follow that.
Okay, great. Any questions on…? No? Okay, so let's just move then to the next indication with respect to dementia with Lewy bodies. Perhaps you can touch on first of all the disease? Perhaps people aren't as familiar with it. What's the standard of care?
David T. Hung
Lewy body disease was probably not really widely known until Robin Williams was found to have died of DLB, dementia with Lewy bodies. So, Lewy body disease or LBD, it's confusing nomenclature because LBD is kind of the umbrella term, and within LBD you have DLB, dementia with Lewy bodies, and PDD, Parkinson's dementia. And it's a very prevalent disease. So there are actually 1.4 million people with Lewy body disease. So it's a lot bigger than most people think, and very, very importantly, there are no drugs that are approved in the U.S. and Europe for the treatment of DLB.
And so, we are targeting DLB in two ways. One is with our Alzheimer's drug, intepirdine, but we are actually doing a study called the HEADWAY study where we are testing intepirdine at even at a higher dose than we are in Alzheimer's disease. And the reason for that is because as it turns out intepirdine not only hits 5HT6 but it also hits 5HT2A, but it doesn't do it as well as it hits 5HT6. But if you get to a higher dose, in this case 70 mg, you start to engage the 2A receptor quite a bit. And we believe that because 2A has, as you know for multiple 2A data sets, affecting 2A affects things like psychosis, and so 80% of DLB patients have psychosis, we think that for that reason we are actually studying a higher dose of intepirdine in DLB, and one of our studies is actually looking at visual hallucinations as a measure of effects on the psychotic aspect of DLB.
We also are looking at the effects of in the study cognition clearly because these are all patients who have dementia. So, I mentioned we have two. Obviously we have intepirdine for DLB. We also have nelotanserin for DLB. So intepirdine, we'll get to it taking to higher doses. Nelotanserin is a very, very selective and very potent 2A antagonist. So with nelotanserin, we're studying all the aspects of DLB, so psychosis, motor dysfunction, REM behavior sleep disorder.
In intepirdine, as I said, we can get to 2A activity when we hit the higher doses, but the bottom line there is that this is a drug that also hits 5HT6, and because these patients have dementia, our major readout in the HEADWAY study is looking at cognition. We are trying to see whether or not we can actually improve cognition and function with our dual 5HT6 and 2A antagonist. But nelotanserin, the second drug, is really targeting the aspects of DLB better amenable or addressable with 2A inhibition, which would be psychosis, motor deficits, and REM behavior sleep disorder.
So we have a number of endpoints that are going to be reading about, data sets we're going to read out in the next few months. We have clearly MINDSET end of this month. We have HEADWAY by year end. We have a gait and balance study with intepirdine looking at multiple dementias that should read out sometime later this year. We have a visual hallucination study with nelotanserin with the 2A activity targeting DLB, so that's going to read out hopefully sometime pretty soon, within next few months. We also have a REM behavior sleep disorder study which the FDA has told us is potentially pivotal if we hit that study, so that's going to read out sometime in Q1. So, just between intepirdine and nelotanserin, we have a number of data readouts in the next few months.
And then we have two other drugs, RVT-103 and 104, which are, in the case of RVT-103 taking a drug like Aricept, which is one of the most widely used drugs in the world for Alzheimer's, but Aricept, when you start inhibiting cholinesterase peripherally and getting an increased acetylcholine in the periphery as opposed to your brain, you start to get some side effects. So, in the case of RVT-103, we combine that with a peripheral muscarinic receptor antagonist, which we believe will ameliorate the stemic side effects of Aricept but hopefully not aggravate the central nervous system side effects because the drug doesn't cross the blood-brain barrier.
And RVT-104 is a similar construct with Exelon, rivastigmine, one of the most potent cholinesterase inhibitors but also one of the most toxic. I think we're trying to inhibit the peripheral toxicity of rivastigmine. So that's RVT-104.
So we've got four drugs in our pipeline, two drugs that are in late-stage development and we have a bunch of data readouts in the next few months on that. So I think we are pretty well positioned as a company, but clearly our biggest focus right now is on MINDSET and HEADWAY and trying to see if we can get a signal there and push that drug across the finish line and get that to patients.
Great. Maybe let's go back to HEADWAY because I think you've mentioned that that potentially, that is a 2b trial but there have been discussions that it potentially could be a registration trial. Perhaps you can [indiscernible]?
David T. Hung
So in our discussion with FDA, HEADWAY is a potentially pivotal study if MINDSET is positive. So, just to be clear about that, so if MINDSET is positive, then HEADWAY could suffice as a single pivotal study, so I just want to make sure that's clear.
Okay, great. And just maybe getting back on the MINDSET data when it's released, is there any read-through from your perspective as how we should think about that with respect to the HEADWAY trial?
David T. Hung
I do think so. I mean we'll see what the data show, but if MINDSET is positive, clearly it will show that increasing acetylcholine levels in Alzheimer's patients have clinical benefit. Now if you look at DLB, dementia with Lewy bodies, there is pretty good evidence that that disease has an even greater cholinergic deficit than does Alzheimer's disease.
So, if intepirdine works in MINDSET, just my personal belief would be that it has a much better chance than average of hitting in HEADWAY because the cholinergic deficit is greater. Also we are testing among two dose, we are testing one of them with even higher dose than MINDSET. So we are testing with 35 mg dose in HEADWAY but the second dose is 70 mg.
So for two reasons I think that if MINDSET hits, we have a really good shot at HEADWAY because it's more of cholinergic deficit in that disease than Alzheimer's, and number two, the dose is even higher. So I would be pretty bullish on HEADWAY if MINDSET was positive.
Okay, great. And then I guess you went very quickly over nelotanserin. Probably it doesn't get the time that is due in terms of the portfolio. But perhaps stepping back, because I know there has been some interesting interim data that you disclosed in the hallucination area, maybe describe a little bit more the basis upon which now you are exploring the three different indications?
David T. Hung
Right. So DLB, there's three main clinical manifestations of DLB aside from dementia. They all have dementia, but 80% of them have neuropsychiatric symptoms like psychosis or things like that, of which visual hallucinations is one such measure, 80% of them have motor deficits, and about half to two-thirds have what you call REM behavioral sleep disorder. And we have multiple data sets with nelotanserin to show that we believe that we have reason to believe that will impact those areas.
So, there was a sleep study done by Arena Pharmaceuticals, we license the drug from, in a cohort of normal volunteers, but it was a sleep study looking at arousals from the sleep. In the REM behavior sleep disorder, it's patients that are waking up from the deep sleep and not getting through their REM sleep and then doing bad things when they are up.
So, in that sleep study with nelotanserin, nelotanserin caused a very dramatic improvement, a reduction in number of arousals from the sleep, with a p-value of 0.0001, so a very robust effect. So we believe with that data we think that we have a real shot of impacting the REM behavior sleep disorder that we see in DLB. And as I said, the FDA has informed us that if we hit our p-values in that study, that study is potentially pivotal, and that will read out in the first quarter of next year.
David T. Hung
On motor side, we announced it in April, on our first 11 patients with DLB who got nelotanserin, and on a scale called the UPDRS, which is the Unified Parkinson's Disease Rating Scale, we showed nearly an 8 point benefit in the UPDRS on patients who got nelotanserin. That's a pretty dramatic effect because if you look at dopamine's effect on UPDRS, if you look at the L-dopa level in the last four weeks, the improvement on the UPDRS of dopamine is in the range of 1.5 points. So, we think that seeing an 8 point improvement on the UPDRS is notable, and so we're going to try to see if we can see more of that in a larger study. We'd like to get to a pivotal study with motor function and look at what nelo does in DLB patients there.
And then clearly on the visual hallucinations, we have an ongoing study that we are going to have data sometime in the later part of this year looking at the ability of two antagonists to reduce visual hallucinations. And so that's the third common association of DLB.
Okay, great. And I think you also touched on some additional, I'm going back to intepirdine, but some additional Phase 2 in gait, et cetera. How are you thinking about those Phase 2s in terms of ultimately as the label or [indiscernible]?
David T. Hung
There's pretty good literature suggesting that if you improve acetylcholine, you may improve gait. If you look at some of the rivastigmine literature in Parkinson's, there has been published study showing that rivastigmine can improve gait and balance in Parkinson's patients. And if you look at the intepirdine data set, what was very notable was on the safety side, whereas the drug, the intepirdine arm on top of donepezil compared to donepezil were pretty balanced across adverse events showing no really significant increase in adverse events that we have seen so far in their Phase 2 data set.
The rate of fall in the intepirdine arm was 2% compared to 6% in the Aricept-alone arm. And what's notable about that is that not only is that a pretty significant reduction, but it's exactly the same numbers that we've seen with idalopirdine in Lundbeck's data set on their safety side, so they actually also saw a reduction of falls from 6% to 2%.
Falls, as you know, is one of the most important, most common and most consequential of morbid events of older age. And in many cases falls are a pre-terminal event. They lead to things like being bedridden, getting pneumonia, getting a deep vein thrombosis, things that are very consequential for patients.
So, we think that if we are able to see effects on things like falls or improvements in gait and balance, those can be other parameters that clinicians find important that really demonstrate the kinds of benefits that intepirdine might be able to deliver even on top of or be up and beyond the effects on cognition and memory and overall function.
So we are looking at all of those things to see how we can kind of consolidate this database and really get a better feel for what happens when you improve cholinergic functions in these patients who have a cholinergic deficiency.
Okay, great. Any questions? Okay. So we started out, there's been a lot accomplished since you arrived in April, but we are now anticipating some very significant readouts and we've got path forward in terms of registrations. Again, what's the vision in terms of building the Company from a commercialization standpoint, which is really a very close reality?
David T. Hung
Yes. So, clearly we are really focused right now on Alzheimer's and DLB, really important diseases, unmet needs, and we are very excited about that. But if you look at the fundamental processes that underlie neurodegeneration, I mean neurodegeneration is basically at the core neuron death, but neuron death occurs in many areas of neurology and in almost all those areas they also represent huge unmet need.
So, in dementia neuron death occurs clearly in the brain. But neuron death also occurs in the spinal cord. Spinal cord injury is a devastating problem for anyone who suffered a trauma. In the case of spinal cord injury, you can have patients who are kids, teenagers, they have a really long life potentially ahead, and are war veterans. So it's a huge issue. Blindness is another neuron death syndrome. It just happens in the retina. The retina is just another part of your brain.
Neurosensory hearing loss, again another neuron death syndrome, but probably increasing in prevalence, many have said that the millennial generation could very well be the deaf generation because of the advent of headphones and listening to really loud music at 65-decibel-plus for protracted periods of time. There is already evidence that hearing loss in people in the 30s and 40s is increasing significantly over what it would have been for their parents' generation.
So, we are really interested in tackling some of the most important areas within neurology, and to me, many of those are these neuron death syndromes, so dementia, spinal cord injury, blindness, neurosensory hearing loss. And because many of the pathways that underlie those diseases are common, they are shared in common, we think that it's actually probably a pretty good way for us to kind of create value in a very cost-effective way and try to address important unmet medical needs and also address potentially very large commercial opportunities.
So that's one direction that we are definitely heading and are very interested in. And as you know from our history, we are also very interested in just being opportunistic and seeing what else is out there and hopeful we'll have a – we'll pay a lot of attention to are there any assets that we think are underappreciated that represent potentially significant advancements to address areas that we consider large unmet needs. But certainly, the four I've just talked about, the dementias, spinal cord injury, blindness, neurosensory hearing loss, those are such large and important areas of medicine that I think that we are going to try to see what we can do to make an important impact there.
Right. That's very exciting and I know the next several months are going to be very exciting, and good luck to you and the Company in terms of building a very successful company.
David T. Hung
Thanks so much, Jessica.
Thank you, everyone.
David T. Hung
Thank you all.
[No Q&A session]