Alpine Immune Sciences, Inc. (ALPN) CEO Mitchell Gold on Q3 2019 Results - Earnings Call Transcript

Nov. 13, 2019 7:54 PM ETAlpine Immune Sciences, Inc. (ALPN)
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Alpine Immune Sciences, Inc. (NASDAQ:ALPN) Q3 2019 Earnings Conference Call November 13, 2019 4:30 PM ET

Company Participants

Courtney Dugan - Investor Relations

Mitchell Gold - Chairman & Chief Executive Officer

Stanford Peng - President & Head, Research & Development

Paul Rickey - Chief Financial Officer

Conference Call Participants

Mark Breidenbach - Oppenheimer & Co.

Ted Tenthoff - Piper Jaffray

Wangzhi Li - Ladenburg

Robert Driscoll - Wedbush Securities

Operator

Good afternoon, ladies and gentlemen, and thank you for joining the Alpine Immune Sciences' Third Quarter 2019 Company Update Conference Call. All participants are in a listen-only mode. Following opening remarks, Alpine's management will open the lines for a question-and-answer period. Please be advised this call is being recorded at the company's request and a webcast of this call will be archived on the company's website for approximately two week.

I would now like to introduce Courtney Dugan, Investor Relations. Please go ahead.

Courtney Dugan

Thank you, operator and thank you everyone for joining us on today's call. This afternoon we issued a press release announcing our corporate update and third quarter 2019 financial results, which is available on the Investor Relations section of our website.

Before we begin today's discussion, I'd like to note that during the call, we will be making certain forward-looking statements, including statements regarding our platform technology and potential therapies; the timing of, and results from, clinical trials and pre-clinical development activities; clinical and regulatory objectives; expectations regarding the sufficiency of cash to fund operations; the potential efficacy, safety profile, and commercial potential of our product candidates; the timing of our public presentations and potential publication of future clinical trial data; the efficacy of our clinical trial designs; expectations regarding our ongoing collaborations; and our ability to successfully develop and achieve milestones and our development programs.

Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described from time-to-time in our SEC filings. Our results may differ materially from those projected on today's call. We undertake no obligation to publicly update any forward-looking statements.

Let me now turn the call over to Alpine's Chairman and Chief Executive Officer, Dr. Mitchell Gold.

Mitchell Gold

Thanks Courtney. With me on the call today Stanford Peng, our President and Head of Research & Development; and Paul Rickey, our Chief Financial Officer. We look forward to sharing with you today our third quarter 2019 performance as well as promising initial clinical results to-date from our first-in-human clinical study of ALPN-101.

The Alpine team has made substantial progress over the past year. Our most advanced program ALPN-101 successfully has completed enrollment in our Phase 1 dose escalation study in healthy volunteers.

As Stanford will highlight, ALPN-101 has exhibited favorable PK characteristics and is a highly potent molecule capable of inhibiting both a T-cell and human response in humans as demonstrated in our PD assays.

This is an important milestone for the company and we are very pleased with these data and believe they reflect that ALPN-101 is a biologically unique and potent molecule. As a result of our Phase 1 study, we are planning a path forward for ALPN-101 in both acute GvHD and other diseases in need of a novel biologic approach. We currently plan to present the design of our ALPN-101 acute GvHD trial, which we have named BALANCE at the ASH Annual Meeting next month.

In this oral presentation, we will also share specific data from our recent healthy volunteer study supporting the biologic activity of ALPN-101 along with additional data supporting why we believe ALPN-101 can potentially address significant unmet medical needs for GvHD patients. We anticipate additional results from the ALPN-101 Phase 1 healthy volunteer trial will be presented at upcoming forum next year.

Our second program, ALPN-202, is a conditional CD28 agonist designed to activate a patient's own immune system to fight cancer. We are actively preparing for ALPN-202, a first-in-human monotherapy trial, which we are calling NEON-1. The planned study will treat patients resistant or refractory to prior available therapies, including checkpoint inhibitors. We currently anticipate that we will begin or initiate patient enrollment in the NEON study in the first quarter of next year.

If enrollment is robust in the ALPN-101 GvHD and ALPN-202 oncology trials, we may have an opportunity to discuss initial clinical trial at therapeutically relevant doses in early 2021 from both of these programs, which may have the potential to create significant value for the company.

With that, I'll turn the call over to our President and Head of R&D, Stanford Peng, to provide a deeper dive into our clinical development strategy. Stanford?

Stanford Peng

Thank you, Mitch. During this past year our R&D efforts have been primarily focused on making ALPN-101 Phase 2 ready and ALPN-202 clinic ready. With ALPN-101, we have completed enrollment on a first in-human study and adult healthy volunteers, designed to enable subsequent development in multiple inflammatory disease indications.

This study is a randomized, placebo-controlled blinded study, evaluating single and multiple escalating doses. Overall ALPN-101 has been generally well-tolerated without evidence of cytokine storm or release and without clinical signs or symptoms of immunogenicity. ALPN-101 has been dosed as single or multiple doses intravenously or subcutaneously.

Preliminary analysis indicate well-behaved pharmacokinetics and pharmacodynamics, including on-target inhibition of immune functionality, such as antibody responses to KLH and ex vivo SEB-induced cytokines responses. Some of these findings will be included as part of an oral presentation at ASH next month, and further details upon completion of final analysis are expected to be reported in the first half of 2020.

In presentations at prior scientific conferences, we have demonstrated a particularly strong pre-clinical rationale for ALPN-101 in acute GvHD. We are in the process of launching BALANCE, an open label dose escalation and expansion Phase 1/2 study in patients with active acute GvHD. The patients in this study will be refractory or resistant to corticosteroids. Endpoints will include safety, objective response rates and duration of responses as well as non-relapse mortality and overall survival.

New translational data presented earlier this week at the American College of Rheumatology meeting now also strongly support ALPN-101 more broadly in other diseases, especially connective tissue diseases like lupus and Sjogren's Syndrome, as well as inflammatory arthritis conditions like rheumatoid and psoriatic arthritis.

Particularly intriguing among these data are the unique inflammatory pathways that appear to be affected by ALPN-101, distinct from the other biologic therapies singly targeting the ICOS or CD28 pathways, as well as its potent efficacy in the animal models. We are actively evaluating all these development options for ALPN-101 either independently or in collaboration with a potential partner.

For ALPN-202, our efforts this year have focused on IND enabling activities, including definitive toxicology studies and GMP manufacturing. We've been greatly encouraged by its non-clinical development profile, which suggest no or low likelihood of immune related toxicities or cytokine release, consistent with the design of the molecule.

We intend to conduct our Phase 1 study of ALPN-202 called NEON-1 in patients who have failed available standard therapies, which includes checkpoint inhibitors when indicated. It will be an open-label dose escalation and expansion study. The primary endpoint of the study involves safety, but the study will also assess outcomes such as objective response rates, duration of responses, progression-free survival and overall survival.

A tissue-based biomarker for patient selection, based on the mechanism of action of ALPN-202 will be explored during dose escalation and may be implemented during or before the expansion cohorts. We currently seek to begin enrollment of ALPN-202 in the first quarter of 2020. We are looking forward to having two active clinical stage programs in 2020.

With that, I will now hand the call over to our CFO, Paul Rickey, to discuss our financial results for the quarter.

Paul Rickey

Thank you, Stanford. As both Mitch and Stanford mentioned, we anticipate having both of Alpine's lead assets in clinical trials next year. With our current cash on hand, we expect to have sufficient cash to support both ALPN-101 and ALPN-202 development plans into early 2021.

Now turning to the financial results for the third quarter. Cash, cash equivalents and marketable securities totaled $47 million as of September 30, 2019, compared to $56 million as of June 30, 2019. The net loss for the quarter was $11.5 million or $0.62 per share. This was a decrease from last year's third quarter net loss of $12.1 million or $0.87 per share and was primarily attributed to a decrease in research and development costs. Revenue recognized under our adaptive immune collaboration agreement, was approximately $300,000 for the third quarter 2019.

Research and development expenses were $9.5 million for the third quarter of 2019, compared to $10.5 million in the third quarter of 2018. This decrease was primarily due to the decrease in contract manufacturing and pre-clinical and research activities for our product candidates, partially offset by increased clinical trial expenses for ALPN-101.

General and administrative expenses totaled $2.5 million for the third quarter of 2019 compared to $1.9 million in the third quarter of 2018. The increase was primarily due to increased legal and patent fees to support our intellectual property.

In closing, we ended the third quarter of 2019 with a strong balance sheet and the ability to support our clinical programs into early 2021.

I'll now turn the call back over to Mitch before opening the call for Q&A.

Mitchell Gold

Thanks, Paul. As you heard from today's call, we have made excellent progress since the company's formation in 2015. During this time, our discovery and translational groups have worked tirelessly to conceive, engineer and develop not just one, but two novel protein-based therapeutics.

We are now in the next phase of evolution for the company as we test these novel molecules in patients. This is a busy and exciting time for us and we very much look forward to sharing our progress in the future.

With that, operator, please open the lines for Q&A.

Question-and-Answer Session

Operator

Thank you. We will now be conducting a question-and-answer session. [Operator instructions] The first question comes from Mark Breidenbach with Oppenheimer & Co. Please go ahead.

Mark Breidenbach

Hi, good afternoon, guys and thanks for taking the questions. Congrats on the progress toward getting into patients in the first quarter. Let me start with one maybe conceptual one and maybe one more specific one on the BALANCE trial.

First of all, I am kind of struck by the data that was presented just recently at ACR. Should we at all be surprised that a drug that acts on T-cell costimulatory pathways ends up having both T-cell and B-cell effects? And I'm also wondering, given that you're -- what you're seeing so far, at least pre-clinically, it sounds like also in healthy volunteers and if there is a T-cell and B-cell component to its activity, should we be looking in chronic graft-versus-host disease as well as acute graft-versus-host disease?

Mitchell Gold

Great. Thanks, Mark. Stanford will take that.

Stanford Peng

Right. I think in general, yes to all of the above. In the sense that we know that a lot of B-cell responses are also T-dependent, and the ICOs pathway in particular has been heavily implicated in T-dependent B-cell activation, for example, with respect to follicular helper cells and germinal center B cells.

So it is on target for us to see an effect also on the B-cell as well, although, as you've seen most of our characterization has been on the T-cell component or effects of the molecules, but that being said, we agree chronic graft-versus-host disease would be a particularly interesting additional indication for us to consider, that's something we also have included in our planning or discussions going forward.

Mark Breidenbach

Okay, that's helpful. And with regard to the BALANCE trial, I'm just wondering if this drug will be administered as a monotherapy or if this will be layered on top of prednisone in the steroid refractory setting? And would you pursue subcutaneous or IV dosing in acute graft-versus-host? Thank you.

Stanford Peng

We're considering all of the above. Our intention is to get as much monotherapy data as possible, while at the same time allowing patients to receive salvage therapy if necessary. So in addition the dosing regimen, currently is intravenous, although as mentioned, we do have the ability to give the drug subcutaneously if appropriate that's just something we haven't emphasized as much for the GvHD indication since many of those patients may have skin involvement, which may limit the subcutaneous route.

Mark Breidenbach

Okay, understood. Well, congrats on the progress and we're looking forward to seeing the presentation at ASH. Thank you very much.

Stanford Peng

Thanks, Mark.

Operator

Thank you. The next question comes from Ted Tenthoff with Piper Jaffray. Please go ahead.

Ted Tenthoff

Great, thank you very much and thanks for taking the question. So looking forward, congratulations on the 101 data. I'm wondering longer term, is this the drug that would be used broadly in autoimmune diseases, or do you think it will be more reserve to kind of orphan and severe diseases based on the mechanism? Thanks so much.

Stanford Peng

Well, as may have been implied by some of our statements, we've been particularly interested in some broader indications like lupus and Sjögren's and it's only recently that we've attain the translation when pre-clinical data to support what we had been hoping or envisioning all along for the molecule.

So we do see GvHD as a unique opportunity in an orphan indication to accelerate the program potentially to advance the program quite quickly. While at the same time, there are many and expanding number of indications that are much broader, that we're currently considering those include the disease that I mentioned like lupus and Sjögren's, but also even arthritis condition.

Ted Tenthoff

Great, that's very helpful. And just one other question. Was there anything that you guys thought down at SITC this weekend that either strengthens or reinforces your view of where 202 to maybe best supplied? Thanks.

Mitchell Gold

Yeah. Thanks, Ted. This is Mitch. Yeah, I think what we really saw from SITC this week was that if you're going to provide a costimulatory signal, you simultaneously need to be providing checkpoint inhibition at the same time, and I think fortuitously we've designed APLN-202 to be able to accomplish both those tests. But not only do we agonize CD28, which we see as a necessary costimulatory signal, but we black both PD-1 and CTLA-4 at the same time. So that -- I think for us, that's a key message, which is just providing a costimulatory signals not enough, you have to provide simultaneous checkpoint inhibition, which ALPN-202 is capable of doing.

Ted Tenthoff

Great. Thanks very much for the update guys.

Mitchell Gold

Thanks, Ted.

Operator

Thank you. The next question comes from Wangzhi Li with Ladenburg. Please go ahead.

Wangzhi Li

Hi, thanks for taking my question and congrats to the quarter results. Maybe two quick questions, one is for the Phase 1. I know you are going to present at ASH and limit to how much you can say now, but maybe quickly on the PK. Do you think that the weekly dosing is the appropriate dosing frequency, if half life of this fusion protein versus the normal antibody?

Stanford Peng

I would say yes. Please wait for the -- our official disclosure of that at ASH, but for now weekly or longer dosing interval should be easily achievable for the molecule.

Wangzhi Li

Okay, great. And then in the press release you mentioned a no clinical immunogenicity, any color on what exactly clinical immunogenicity means to you. Do you see any titer or just no impact from those potential titer of ADAs?

Mitchell Gold

No, we mean that we have not observed or had reported yet any immune related reactions like infusion reactions or injection site reactions.

Wangzhi Li

I see, okay, got it. And then last question for the Phase 1 trail in GvHD. Any color on what type of transplant patient you're going to enroll. Do you – are these all common or you selected certain type of transplant either cellular therapy for selection or PTCY or any color on that?

Mitchell Gold

No, there won't be any restriction on that. It will be -- well, other than the patients will have to be only in their first transplant, they will not be allowed to have a second transplant or later, but the indication for transplant, their conditioning regimen, et cetera. We don't currently place restrictions, although of course those -- that information will all be recorded to help interpret the final results.

Wangzhi Li

Okay, got it. Thanks very much for taking my questions.

Mitchell Gold

Thanks Wangzhi.

Operator

Thank you. The next question comes from Robert Driscoll with Wedbush Securities. Please go ahead.

Robert Driscoll

Hi, guys. I just wonder if you could provide some thoughts about the safety profile of 202? I know this kind of the CD28 co-stimulation is dependent on PD-L1, but just in kind of light of the significant toxicity-induced by combined PD-1 and CTLA-4 inhibition?

Stanford Peng

Yeah, it's certainly something that we've been concerned about during the entire development of the molecule, although I can add a little bit of color to our comment around what we've seen non-clinically with the molecule, whereas, the toxicity profile is actually quite clean, whereas, in contrast, as you may know when nivolumab and ipilimumab administered to sinus there is an incidence -- significant incidence that mean-related events, primarily colitis, which is not something we observed in our -- in our studies. So we believe the design of the molecule has the potential to not only confer greater efficacy, but potentially even greater tolerability than the existing combination regimen.

Robert Driscoll

Got it. Maybe just one more on 202. Also since you showed the ability to enhance the activity of anti-CTLA-4 antibody, just wondering why that is, do you know if they buy the method so -- anti-CTLA-4?

Mitchell Gold

It depends on the anti-CTLA4 antibody, although for that particular one, yes we do cross react.

Robert Driscoll

Okay, got it. Thanks very much guys.

Mitchell Gold

Thanks, Robert.

Operator

Thank you. There are no further questions. At this time, I would like to turn the floor back over to Dr. Gold for closing comments.

Mitchell Gold

Thanks to everyone for joining us today. We very look forward to keeping you up to date on the company's progress and staying in touch with you at conferences in the future. Have a great day.

Operator

Thank you. This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.

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