This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk01: Good afternoon, ladies and gentlemen, and thank you for joining the Alpine Immune Sciences second quarter 2021 financial results and corporate update conference call. Currently, all participants are in a listen-only mode. Following management prepared remarks, we will hold a question and answer session. To ask a question at the time, please press star followed by one on your touchtone telephone. If anyone has difficulty hearing the conference, please press star zero for operator assistance. As a reminder, this conference is being recorded Tuesday, August 10th, 2021. I would now like to introduce Alex Shariff, Director, Investor Relations and Corporate Development. Please go ahead.
spk04: Thank you, Mary. With me on today's call from Alpine Immune Sciences are Executive Chairman and CEO, Dr. Mitchell Gold, President and Head of Research and Development, Dr. Sanford Pang, Chief Financial Officer, Paul Rickey, and Chief Business Officer, Dr. Remy Durand. This afternoon, Alpine Immune Sciences issued a press release announcing the company's second quarter 2021 financial results and corporate update. If you have not received this news release and would like to read it, or if you would simply like to be added to the company's distribution list, You can do both on the investor relations page of the company's website at www.alpineimmunesciences.com. During the course of today's conference call, Alpine's management will make forward-looking statements including, but not limited to, statements regarding the company's preclinical and clinical development plans and the timing thereof, expectations regarding the sufficiency of cash to fund operations, including any cash received from potential milestone payments under Alpine's collaborations, the timing and publication of future clinical data, expectations regarding Alpine's ongoing collaborations and potential future collaborations, including the anticipated strategic and financial benefits of the option and licensing agreement between Alpine and AbbVie for the development and commercialization of ALPN 101 or CASI-COLSEPT, Alpine's ability to successfully develop its product candidates and achieve milestones under its collaboration with AbbVie and others, and the financial and business outlook for Alpine. These forward-looking statements are based on the company's current expectations and inherently involve significant risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties. Factors that could cause results to be different from these statements also include factors the company describes in the section entitled risk factors in Alpine's quarterly filing on form 10Q for the period ended June 30th, 2021 and filed with the SEC on or about August 10th, 2021. Alpine cautions you not to place undue reliance on forward-looking statements and undertakes no duty or obligation to update any forward-looking statements as a result of new information, future events, or changes in its expectations. With that, I will now turn the call over to Alpine's Executive Chairman and CEO, Dr. Mitchell Gold.
spk06: Thanks, Alex, and welcome to our second quarter 2021 financial results conference call. We had a highly productive second quarter with substantial progress made across our portfolio. We look to continue to build on our strong momentum and accelerate development of our pipeline of innovative therapies for patients living with cancer and autoimmune and inflammatory diseases. Before Stanford provides a summary of the key updates for our three most advanced programs, I wanted to take a step back and highlight where the company sits today. When we founded the company over six years ago, we had a goal of targeting CD28, the key costimatory ligand on T-cells, as a therapeutic approach both for oncology and for autoimmune diseases. In 2015, CD28 was seen as too risky a direct target given early experiences with the case of narrow monoclonal antibody eliciting near-fatal cytokine storm. We believed that biology was too compelling and believed we could successfully engineer approaches that were both safe and effective. That belief resulted in the development of ALPINE-101, which we will refer to going forward by the generic name Acazocosept or Acazi, a dual inhibitor of CD28 and ICOS for autoimmune and inflammatory diseases, and ALPINE-202, our conditional CD28 agonist in oncology. Yesterday, CD28 came to the forefront in an all-day investment conference hosted by Bernstein focused on how to target CD28 in cancer. Stanford, along with the scientific leaders of two other companies, and Mike Curran from MD Anderson, presented on CD28 as a therapeutic target. We believe the data from the programs at Alpine will support CD28 as being a rational and effective target, both in oncology and in other immune diseases. We are proud to have lit the CD28 torch back in 2015, and we look forward to continuing to carry it across the finish line to help patients in need of new therapeutic approaches. At the same time, we are strongly encouraged by the progress of our discovery platform beyond CD28 and the immunoglobulin superfamily. The Alpine 303 program, for instance, has demonstrated our ability to target the TNF superfamily as well. It has shown promising preclinical data and we are particularly excited about this program. Stanford will go into more detail on this and review our most recent clinical progress across all of our development programs. Stanford? Thank you, Mitch.
spk08: As Mitch mentioned, 2021 continues to be an exciting and productive time for us. Importantly, we were particularly pleased to successfully initiate Synergy, the Phase II study with acasical sept and lupus. This is an international, 24-week, randomized, double-blind, placebo-controlled, parallel arm study of approximately 130 participants with active disease. The primary objectives include safety and tolerability, but important efficacy assessments will include multiple traditional lupus disease activity endpoints, including SLEDI and BILAG, as well as clinical biomarkers of disease activity, such as anti-DNA and complement levels. Development activities for Alpine 202 Our conditional CD28 co-stimulator and dual checkpoint inhibitor have also been particularly eventful. We presented initial data from the ongoing dose escalation with monotherapy and advanced malignancies, the NEON1 trial, at ASCO in June. The drug has been very well tolerated, with the most remarkable adverse events including grade 1 or 2 immune-related adverse events, particularly cutaneous, as of the data cutoff date. Particularly interesting immunophenotypic changes were observed in circulating T cells, including markers of activation and proliferation, increases in central memory T cells, and reductions in Tregs. These findings were notable since they do not appear to have been reported previously in studies with combination nivolumab-ipilimumab, suggesting a differentiated profile due to the C28 mechanism of the drug. In addition, we were pleased to observe that the majority of participants derived clinical benefit as judged by a best response of stable disease or better, despite the population consisting of heavily pretreated tumors that are traditionally considered not immunologically responsive. The majority of this reported experience was on the weekly dosing schedule. Now we plan to complete dose escalation on the Q3 week schedule and choose a specific dose regimen, preferably Q3 week, for expansion cohorts, hopefully by the end of this year. For this program, we were also excited about entering a collaboration with Merck to study Alpine 202, in combination with pembrolizumab. This is a NEON2 trial whose design is similar to NEON1 with an abbreviated dose escalation and separate expansion part in patients with advanced malignancies that are either eligible for treatment with a PD-1 inhibitor or otherwise have no standard therapeutic options. Although the addition of a PD-1 inhibitor to Alpine 202 might seem redundant at first, we have observed preclinically that such a combination can provide additional, perhaps synergistic, effects. We attributed this to the ability of PD-1 inhibitors to induce or upregulate PD-L1 expression on tumor and other immune cells, which in turn would potentiate the PD-L1-dependent CD28 co-simulatory activity of alpine 202. This combination study also facilitates the study of alpine 202 in immune-responsive tumors in earlier lines of therapy, helping to expedite the overall clinical development plan. We were pleased to initiate this study as well this past June. At the same time, as Mitch mentioned, we're particularly enthusiastic about our third development candidate, Alpine 303, a dual BAF-April B-cell cytokine inhibitor, which we are developing for lupus and other B-cell-mediated diseases. Our scientists received a Basic Science Award for their oral presentation on Alpine 303 at the recent U of R e-Congress, which included a presentation of Alpine 303's superior potency and effectiveness in animal models compared to wild-type Tachy-FC fusion comparators. Studies in non-human primates demonstrated also superior PKPD, which may translate into superior efficacy and or a more convenient dosing regimen in humans. We're currently completing clinic-enabling activities and continue to target initiation of a Phase I study by the end of the year. I'll now hand the call over to our CFO, Paul Rickey, to discuss our financial results for the quarter. Paul.
spk09: Thank you. As Stanford mentioned, in June we initiated our Phase 2 synergy study as part of our AbbVie collaboration and achieved $45 million in pre-option development milestones. That deal provided an upfront payment to Alpine last year of $60 million, and we'll have provided $105 million cash in the first year of our collaboration. There is still an additional $30 million in potential pre-option development milestones as we progress on our ACASI development plan and $730 million for option exercise and success-based milestones, plus royalties as part of the overall deal value. Turning to our financial results for the fourth quarter, Alpine's cash, cash equivalents, and marketable securities totaled $100.4 million as of June 30th, 2021, which does not include the $45 million in achieved AbbVie milestones, which we expect to receive in the third quarter. This compares to our cash balance of $115.4 million on March 31, 2021. Revenue recognized under our collaboration agreements was approximately $7.2 million in the second quarter of 2021 compared to approximately $0.7 million in the second quarter of last year. The increase was attributable to our revenue recognized under our AFI agreement. Research and development expenses were $14.6 million in the second quarter of 2021 compared to $7.1 million in the second quarter of last year. The increase primarily related to contract manufacturing and process development of our product candidates, ongoing clinical trial activities, direct research, and personnel related expenses. General and administrative expenses for the second quarter of 2021 were 3.3 million compared to 3.3 million in the second quarter of last year as well. Alpine recorded a net loss of 11 million in the second quarter of 2021 compared to 9.9 million in the second quarter of 2020. In terms of our cash runway, we expect that our cash on hand, combined with the 45 million in achieved milestones to be received in the third quarter, and the potential $30 million in additional pre-option exercise milestones under our collaboration with Abby is sufficient to fund Alpine's planned operations through 2023. With that, I will turn the call back over to Mitch.
spk06: Thanks, Paul. Looking forward to upcoming milestones. As Stanford mentioned, we plan to complete dose escalation for NEON1 on the Q3 week schedule and choose a specific dose regimen for our expansion cohorts. We anticipate the initiation of our phase one first-in-human trial for Alpine 303 in the fourth quarter of this year. This will be the first clinical step towards establishing a potential best-in-class position for this program. As a reminder, Alpine 303 targets two B-cell cytokines, APRIL and BAPT. We are particularly excited about this program because these are well-validated targets. Innovation of these cytokines is associated with highly robust reproducible PDN points, even in healthy volunteers. As a result, we anticipate that the findings of our phase one trial early next year could be a significant inflection point for the company. With that, we'll now open the call for questions. Operator?
spk01: As a reminder, to ask a question, you will need to press bar one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Your first question comes from the line of Ted Tantoff from Piper Sandler. Your line is open.
spk02: Great. Thank you so much. Hi, guys. Thanks for the update. So I want to get a sense just with respect to additional potential studies for 202. You know, what cancer types are really coming to the top and make the most sense both in terms of combination but also potentially even if there are monotherapy opportunities that might be accelerated. Thanks so much, guys.
spk06: Thanks, Ted. Stanford, do you want to take that in terms of what we're thinking for our expansion studies?
spk08: Yeah, sure. I mean, we continue to think in a couple of different ways. One is around tumor types that are historically refractory to PD-1 inhibitors or other checkpoint inhibitors. since the mechanism of 202 is designed to overcome that resistance, as well as also indications that have been historically immune responsive as 202 is designed to be superior to at least checkpoint inhibitor monotherapy. You know, I'd say those are things that we're continuing to analyze in terms of the data from the ongoing study, and we'll be more prepared to answer that in more specifics when we finish dose escalation. Great. Excellent. Thanks, Stanford.
spk06: Thanks, Ed.
spk01: Your next question comes from the line of Mars Speaker from Cohen. Your line is open.
spk07: Great. I want to ask a question about 202. Can you set expectations for the new N1 data update later this year? What does success look like here?
spk06: Yeah, Stanford, you want to take that?
spk08: Sure. I mean, you know, as you know, primary objectives in a dose escalation phase one are mostly safety tolerability. So a win for us is establishing a dose regimen that we'll take into expansion cohorts. So, you know, as I alluded to, you know, we mostly have data that we've reported out with Q1 week regimen. We're also evaluating a Q3 week regimen, which for various reasons could be advantageous, both from a convenience standpoint and perhaps also from sparing T cell exhaustion as well. So we'll be looking at that data carefully as that data emerges from the escalation and then make a decision.
spk06: The only thing I might add on to that, Boris, is, you know, and this was highlighted in detail at the conference yesterday, focusing on CD28 as a therapeutic target on oncology, is that, you know, everyone's really looking at why CD28 is so different than dual checkpoint blockade alone. And I think, you know, what we're seeing from a PD perspective with Alpine 202 is very different, and we're going to obviously get some information out of the NEON1 trial in that regard. We presented some of that data at ASCO, but obviously it's going to be a much more robust data set as we move that forward.
spk07: Got it. And I just have one question on a synergy study in lupus. I'm just curious, where do you anticipate the timeline for enrollment to be?
spk06: Yeah, Stanford, you want to talk about that?
spk08: Yeah, we expect that to take at least a year, although that's something we're continuing to evaluate with the changes in the pandemic situation and how that will affect our operations. So I think we're cautiously evaluating that now.
spk06: And just for clarity purposes, our plan is – and one thing is that we plan on completing – dose escalation and defining our expansion cohorts by the end of the year. Obviously, we'd look to present it at a scientific conference going forward, you know, whether that's end of this year or, you know, sometime next year as the conference schedule allows, that's when it'll be presented.
spk07: Got it. Great. Thank you very much for taking my questions.
spk06: Sure.
spk01: Next question comes from the line of Mark Badenbeck from Oppenheimer. Your line is open.
spk05: Hey, guys. Good afternoon and thanks for taking the questions. Just with regard to upcoming clinical presentations, can you give us a sense for when we might see initial data from NEON2 dose escalation? And also, can we expect to see healthy volunteer data from Alpine 303 in the first half of next year?
spk06: Yeah. Well, I'll take the second question first, Mark, and then I'm sure Stanford is going to want to comment on the first part. So in terms of Alpine 303, obviously we have a lot of enthusiasm for that. As I mentioned in my prepared remarks, these are well-validated targets, and I think the Healthy Volunteer Trial is going to give us some very instructive endpoints in terms of the impact that we're having on IGG and IGM. We anticipate that we'll start that trial in Q4, and we'll report data on that probably sometime in the first half of next year. So it'll come in relatively quickly. In terms of NEON 2, Stanford, do you want to talk about that a little bit?
spk08: Sure. I mean, it's, you know, hopefully by the first half of next year, I would say. But again, you know, we're just getting started with that trial. So I think we'll have to get a better estimate of the operationalization of recruitment and so on more likely in a couple of months. So assuming all goes as planned, we could potentially get through that just as quickly as we did with NEON1 because it is an abbreviated dose escalation compared to NEON1. But as I said, the operational aspects are shifting, and we just want to acknowledge that.
spk05: Understood. And just with respect to the healthy volunteer study of 303, are there any particular PD markers or kind of efficacy signals in a healthy volunteer population that you really need to see before justifying moving this program forward into a Phase II study in lupus or other autoimmune indications?
spk08: Yeah, it's pretty well documented and, I guess, validated, if you will, that the April and Bath cytokines play a role in B-cell population development as well as immunoglobulin secretion or the production of circulating immunoglobulin. So with prior wild-type tachy-FC fusions that have been in the clinic before, they're actually published healthy volunteer data that that are consistent with each other, showing that you're getting approximately 10% to 20% reductions in IgA and IgM with a single dose. So we're going to be targeting at least that amount to be able to know what dose levels of 303 or dose regimens of 303 would be predicted to at least be able to match that and then also hopefully exceed those type of PD outcomes.
spk05: Super helpful. Okay, thank you for taking the questions and congrats on the progress. Thanks, Mark.
spk01: Your last question comes from the line of Joe Pankinis from HC Wainwright. Your line is open.
spk03: Hey, guys. Good afternoon. Thanks for taking the question. I want to start on CD28 concept. Obviously, this is a molecule that's been around for a long time, and I guess I'll frame my question in the following manner. When you look at IO and IO approaches, there's always an underlying or percolating concept of, you know, being concerned about immune-related adverse events. So, Mitch, I'll use a phrase you used earlier, you know, with regard to the rational targeting of Alpine 202. Do you think that helps reduce the risk for IRAEs, especially as you're getting to the point where you're looking to choose your regimen, your final regimen?
spk06: Yeah, I'll let Stanford talk a little bit on dosing. But what's really exciting about this conference that we participated in yesterday was, Everyone acknowledged that, you know, there was a lot of fear in going after CD20. I don't think anyone doubted that it was going to be powerful from a biologic perspective. But the early experience with the antibodies that it targeted, I think, you know, made a lot of people kind of stay away from it. We felt like whenever you see biology that's that powerful, you want to find ways to engineer around it. And obviously us and, you know, Regeneron is obviously working in this space. We're pretty excited about what we're seeing. And it's clearly differentiated from what you're seeing with checkpoint therapies alone. Sanford, you want to take the second part of that question?
spk08: Yeah, I want to make sure, maybe to clarify, you mean the concerns about adding 28 on top of checkpoint inhibition for adverse events, is that the gist of your question?
spk03: Yeah, but not necessarily just for 202 specifically, but in general, you know, when you have much more immune activation versus checkpoint inhibition alone, and that, you know, the targeting aspect of the molecule has the potential to reduce any potential IRAEs.
spk08: Yeah. Yeah. I mean, you know, I guess in that regard for the design of 202, we've been actually quite pleased at how well the drug has been tolerated, you know, despite the many concerns that, you know, even our own team had, you know, in design of the molecule that we wanted to make sure that it was controlled CD28 activation, you know, in the tumor microenvironment and so on. So, From that perspective, it's been pretty reassuring to see the progress so far in the clinic. That being said, what we've reported out have been primarily the lower doses, so we're quite eager to see how things go as we go to higher doses with the drug. Another way to look at it, though, is that the checkpoints primarily seem to work through 28. PD-1 works by inhibiting the CD28 signaling. CTLA-4 works primarily by being a decoy receptor for the CD28 ligands, CD80, CD6. So they're really taking the brakes off of CD28, and 202 provides an active signaling or the gas, so to speak, on CD28. So it's also possible that we're not necessarily going to amplify it exceedingly so in terms of excess physiology, but rather... to potentiate the effects in the tumor space, you know, of potentially the desired effects on T cells in the tumor space.
spk03: Got it. No, I appreciate that. And then just quickly on 303, you obviously gave some extra color already. I was just curious what other type of PD markers you might be looking for beyond the immunoglobulins because I think, like you said, even though it's a healthy volunteer study, I think there could be some important read-throughs.
spk08: Yeah, I actually forgot to catch or mention also the circulating B-cell populations. We do expect to see changes in circulating B-cell populations because that's also been suggested or demonstrated by the mechanism of action and other prior molecules. So we'll be looking at a combination of flow cytometry for B-cell subpopulations as well as circulating IgE.
spk03: Got it. Thank you very much, guys. Thanks, Joe.
spk01: This concludes the Q&A portion of the call. I will now turn the call back over to Mitchell Gold, who will make a few closing remarks.
spk06: Thank you, Operator. We welcome your requests for upcoming meetings with our team. Please feel free to reach out to Alex if you would like to schedule some time with us. With that, I'd like to thank you all for participating in today's call, and have a great day.
spk01: This concludes today's conference call. Thank you all for your participation. You may now disconnect.
Disclaimer