Alpine Immune Sciences: A New Name On The Radar

Mar. 08, 2019 2:46 PM ETAlpine Immune Sciences, Inc. (ALPN)19 Comments

Summary

  • Today, we take a look at a promising but very early stage developmental concern called Alpine Immune Sciences.
  • Although still a year away from treating afflicted patients, Alpine’s novel approach could result in game-changing therapies down the road.
  • We take an in-depth look at this intriguing, but very early stage 'Tier 4' concern in the paragraphs below.
  • Looking for a community to discuss ideas with? The Biotech Forum features a chat room of like-minded investors sharing investing ideas and strategies. Get started today »

Those who exploit the suffering of others are called parasites. Those who exploit their own suffering are called artists.” ― Marty Rubin

Today, we take a look at a promising but very early stage 'Tier 4' developmental concern that recently came onto my radar.

Company Overview:

Alpine Immune Sciences, Inc. (NASDAQ:ALPN) is a Seattle based development-stage immunotherapy company focused on developing treatments for autoimmune/inflammatory diseases and cancer. Its proprietary scientific platform produces variant immunoglobulin domains (vIgDs) using a process known as directed evolution to create therapeutics potentially capable of regulating the immune system. The company essentially went public when it merged with public company Nivalis Therapeutics, Inc. while concurrently executing a 1-for-4 reverse stock split in July 2017. The price of the stock post-split was $9.60. This busted IPO was founded in late 2014 and commands a market cap of ~$125 million.

Platform:

The company’s platform is based on immunoglobulin superfamily (IgSF) units, which are a group of adhesive, costimulatory (activating), and inhibitory (blocking) proteins found on the surface of immunological, neurological, and other cell types. These proteins are the principal players in the immune system and are potentially therapeutic because of their ability to naturally join multiple binding partners. Through a screening and engineering process known as directed evolution, Alpine modifies these IgSF units into vIgDs that are capable of working within a formed synapse, forcing a synapse to occur, or preventing a synapse from occurring; thus, potentially modulating multiple inhibitory and/or activating pathways simultaneously with an endgame of regulating the immune system’s response to an antigen.

Pipeline:

From this platform, Alpine has developed two programs.

ALPN-101. The molecule likely to be first into the clinic is ALPN-101, which is an ICOS/CD28 dual antagonist vlgD fused to the effectorless Fc (Fragment, crystallizable) region of an antibody, which acts as a backbone. CD28 (Cluster of Differentiation 28) is one of the proteins expressed on T-cells that provides costimulatory signals required for T-cell activation and survival. ICOS, short for Inducible T-cell COStimulatory molecule, is a part of the CD28 costimulatory family of molecules that includes PD-1 and CTLA-4. Unlike CD28, ICOS is poorly expressed in naïve T-cells, and rapidly induced upon activation. Elevated levels of ICOS-expressing T-cells are present in a number of inflammatory diseases. Alpine believes that inhibition of ICOS could be effective in the treatment of inflammatory disease.

Source: Company Presentation

Current inflammation therapies, such as Bristol Myers Squibb’s (BMY) Orencia (abatacept), only target the CD28 pathway and have proven either only partially effective or ineffective against most inflammatory diseases for which they are approved. Although there are many monoclonal antibodies targeting either ICOS or CD28 in the clinic, there are currently no competitors with a single molecule targeting ICOS and CD28 simultaneously. Alpine believes ALPN-101’s novel mechanism of action may have therapeutic applications against Graft-versus-Host Disease (GvHD), Inflammatory Bowel Disease, MS, and a host of Rheumatoid disorders.

Source: Company Presentation

The company expects to file an IND with the FDA for psoriatic arthritis (PA) and acute GvHD indications soon. Approximately 250-300 thousand patients are afflicted with PA annually. In addition to CD28-targeting Orencia, tumor necrosis factor inhibitors, such as AbbVie’s (ABBV) Humira and biosimilars, as well as IL-17 inhibitors are expected to dominate the PA market, but with only modest improvement in disease activity. In preclinical models, ALPN-101 demonstrated superiority to abatacept, which is expected to generate sales of ~$250 million in 2025 for Bristol Myers.

The acute GvHD indication is smaller as it afflicts only ~4,000 patients per year, but 30%-50% of patients do not respond to available therapeutics and the FDA has not approved any remedy specifically targeting acute GvHD. With a mortality rate of ~75%, there is a substantial unmet need. In a preclinical model, ALPN-101 demonstrated efficacy against this predominately T-cell mediated disease.

The initial Phase 1 roll out will test healthy volunteers with subsequent Phase 1b trials treating PA and acute GvHD patients expected in late-2019/early-2020.

ALPN-202. Alpine’s second program is ALPN-202, which is a dual PD-L1/CTLA-4 antagonist with PD-L1 dependent T-cell activation that has possible oncology applications. Like ALPN-101, ALPN-202 is a single vlgD fused to an effortless Fc backbone, with the potential capability of blocking inhibitory signals from PD-L1 and CTLA-4 while providing CD28 costimulation. Current remedies targeting PD-L1 induce little or no response in over 70% of patients, which Alpine believes is due to insufficient T-cell activation (e.g. costimulation). Also similar to ALPN-101 is the fact that no competitor is developing a single molecule simultaneously targeting PD-L1, CTLA-4, and CD28.

A preclinical study in mice proved very encouraging with 8 of 11 mice tumor free at Day 37 versus 2 of 11 for PD-L1 inhibitor durvalumab. The game plan is for ALPN-202 to enter the clinic in Q4 2019 treating multiple oncology indications as a monotherapy and then in combination with PD-L1 therapies.

Kite Pharma Licensing Agreement:

In addition to these ‘candidates’ for the clinic, Alpine has transmembrane immunomodulatory programs ((TIPs)) that are vlgD-based extracellular domains engineered to potentially bind multiple powerful activating receptors on the surface of the T-cell. Through expression of costimulatory TIPs on engineered cellular therapies (ECTS) such as CAR-T cells, Alpine believes it can enhance ECT and endogenous T-cell activity in the tumor environment. In the lab, Alpine’s vlgD TIPs demonstrated enhanced T-cell proliferation, improved cytotoxicity, and increased T-cell cytokine production.

These results attracted the attention of Kite Pharma, now a Gilead (GILD) company, which entered into an agreement with Alpine to license two TIP programs. In return, Alpine received $5.5 million in cash and is eligible to receive an additional $530 million in developmental, regulatory, and commercial milestones in addition to royalties for any Kite therapy employing Alpine’s TIPs. The deal, originally inked in 2015, was extended in October 2017. These programs are still in the discovery phase.

Balance Sheet & Analyst Commentary:

Alpine currently has ~$80 million of cash on hand based on its $62 million cash position as of September 30, 2018, a quarterly cash burn of ~$7 million, and a $25 million private placement executed on January 16, 2019 that included the sale of ~4.7 million shares of stock at $5.37 per share and 1.8 million warrants with a $12.74 strike price, expiring January 2024. The company believes it has enough cash to fund operations into 2021 as the burn rate should accelerate when its compounds enter the clinic. Alpine has ~$4 million in debt which is being paid down in equal installments over the next 24 months.

Street analysts are positive on Alpine as exemplified by the two buy and three outperform ratings on its stock. Despite the slightly different shades of sanguinity, the prognosticators’ price targets are very similar with four at $13 and one at $12.

It should be noted that Alpine is a tightly held company with its four largest shareholders owning ~74% of the stock outstanding, including a 22.7% position controlled by an investment partnership run by Chairman & CEO Mitchell Gold. That partnership purchased over 190,000 shares while two other beneficial owners added ~372,000 shares each on the recent private placement.

Verdict:

With no compounds in the clinic and no trials on afflicted patients scheduled until either YE19 or early 2020, it is not likely that Alpine will have a commercial biologic until 2024 if all proceeds according to plan. However, with its very promising early results in the pre-clinic, it can be reasoned that Alpine may attract collaborations if the Phase 1 trials demonstrate the same promise. It appears that Alpine’s four major investors have placed their bets with a very long-term horizon in mind. The company has a market cap of ~$125 million, ~$80 million in cash, and a potentially game-changing approach.

For the patient investor, the weakness – down ~35% from 52-week highs – caused by the relative dearth of news from this developmental stage company has created an interesting entry point for long-term investors. This name is way too early stage to even be considered for a large stake. However, I do think it is an intriguing ‘watch item’ stock. I have bought a few hundred shares for my own portfolio and will watch developments over the next few quarters. I offer this analysis up to those that might be inclined to do the same.

After all a photographer is a kind of spy bought by the highest bidder, a parasite who lives off war without fighting it…” ― Mathias Énard, Zone

Bret Jensen is the Founder and author of articles on The Biotech Forum, The Busted IPO Forum, and The Insiders Forum. To receive these articles as published on Seeking Alpha, just click the appropriate link and hit the orange follow button.

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Disclosure: I am/we are long ALPN. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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