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spk02: inhibitors help preserve graft survival, but they are also associated with significant side effects, such as hypertension, dyslipidemia, new onset of diabetes, and tremors. Moreover, research shows that 10-year post-transplant, almost all transplanted kidneys will demonstrate evidence of CNI-induced nephrotoxicity. We believe, based on the evidence generated to date, that tegoprubar has the potential to reduce or even potentially eliminate these side effects, while also providing improved graft function. Turning to the safety results we observed in the study, where among the three participants, Tegoprobar showed good tolerability, especially among a difficult to treat population. None of the participants experienced acute rejection, and there was no evidence of new onset diabetes after transplant or any impact on glucose level levels in two participants without diabetes at baseline. One participant was discontinued from the study on day 55 after developing BK viremia, a common occurrence following a kidney transplant, which occurs in 20% or more of transplant recipients. An additional participant elected to discontinue from the study after 33 weeks, reporting mild alopecia and mild insomnia, which the investigator did not attribute to Tago-Prubart. The adverse events continued once the patient was switched from Tago-Prubart to CNIs. We continue to make progress with this ongoing trial and have since enrolled an additional two participants who both remain on study. We expect to report updated data at a medical conference later this year. Building off our results from the ongoing Phase 1b trial, We remain on track to initiate our randomized open-label Phase II BESTO study to assess the safety and efficacy of tegoprobar compared to tacrolimus and the preservation of allograft function after kidney transplantation. 120 participants will be randomized one-to-one to receive either tegoprobar every 21 days or twice daily oral tacrolimus. The primary endpoint will compare the mean EGFR at 12 months for participants receiving tegopubart versus tacrolimus. Secondary objectives will include safety and tolerability, participant and graft survival, biopsy proof and acute rejection, and the incidence of new onset diabetes mellitus after transplant. I'd like to conclude by briefly covering our IGAN program. We're following our announcement to deprioritize the program at the beginning of the year. we continue to collect safety data from the patients previously enrolled to provide additional insight into Tegoprobar's safety profile. The data we presented at WCN from 16 patients in the high dose cohort of 10 mg per kg every three weeks showed Tegoprobar to be safe and well tolerated with no serious nor severe adverse events reported and no early discontinuations. Four participants had completed at least 24 weeks on treatment, and five others completed at least 12 weeks. We are encouraged by the safety profile TagoProvar continues to display, and to date we have now dosed approximately 100 human subjects across multiple disease indications. Given the deprioritization of the IGAN program, and having now generated key safety insights in this population, We are now winding down all IGAN study activities at our sites, and we anticipate winding down the vast majority of our IGAN activity and spend in the second quarter of 2023. With that, I'd now like to turn the call over to Paul for a financial update.
spk01: Thank you, Steve. The company reported a net loss of $10.8 million, or 75 cents per share, for the three months ended March 31st, 2023, compared to a net loss of $9.9 million, or 69 cents per share, for the same period in 2022. Research and development expenses were $8.1 million for the three months ended March 31, 2023, compared to $6.6 million for the comparable period in 2022, an increase of $1.5 million. The increase is primarily due to higher clinical development expenses, primarily with external CROs of $2.1 million, and an increase in personnel costs due to increased headcount. The increase was partially offset by decreases in stock-based compensation, manufacturing, and consulting expenses. General and administrative expenses were $3 million for the three months ended March 31, 2023, compared to $3.2 million for the comparable period in 2022, a decrease of $200,000. The decrease was primarily related to the lower stock-based compensation costs. Earlier this month, we announced the entry into a definitive securities purchase agreement with select healthcare investors that will provide up to $185 million in gross proceeds through a private placement. The purchase agreement included an initial upfront of financing of $35 million and additional aggregate financing up to $105 million, subject to achieving clinical development milestones, volume-weighted share price levels, and trading volume conditions. plus up to $45 million upon the full exercise of warrants being issued in connection with the agreement. The financing was led by BVF partners and Armistice Capital and includes participation from new and existing investors, including the global pharmaceutical company, Sanofi. Elladon ended the first quarter with approximately $46.5 million in cash and cash equivalents. With that financial update, I'll turn the call back over to DA.
spk05: Thanks, Paul. I am proud of the progress that Elladon has made in the early part of 2023 and feel we are now well-positioned to make significant strides in our evaluation of Tegoprobar as a potential much-needed replacement for CNIs in kidney transplantation. We are highly encouraged by the data generated to date in our ongoing Phase 1b study and look forward to both its continued enrollment and to providing a clinical update later in the year. Finally, following our financing, we now have a well-capitalized path to launch and execute our phase two bestow trial while we continue to report data from the open-label phase 1b study in parallel. Operator, please begin the Q&A session.
spk03: Thank you. Ladies and gentlemen, should you have a question, please press the star followed by the one on your touch-tone phone. If you would like to withdraw your question, please press the star followed by the two. One moment, please, for your first question. Your first question comes from Pete Stavropoulos from Cantor Fitzgerald. Please go ahead.
spk09: Hi, DA, Stephen, Paul. I want to congratulate you on the successful financing, and I'm happy to see that the Tago Kidney Transplant Program is moving forward. So, you know, one of your investors stood out at me, you know, when I saw the press release for the financing, which was Sanofi. You know, it's a well-established, it has a well-established kidney and transplant franchise. So, you know, well-versed in the space. Can you provide any color on those interactions, and what do you think drew them in? through this company to invest in this molecule and program? You know, do you think it was the totality of the data generated, you know, with Tago to date, you know, across all programs, or was it kidney-specific data?
spk05: Hey, Pete, thanks for the question. You know, in terms of Sanofi, we obviously appreciate having them as a new investor. As you mentioned, they know the space quite well. They've also had said in the past that in terms of the way they viewed their interactions or their development in the space, they were not looking at kidney transplantation. I think they looked at us and saw a good investment opportunity. This was... an investment that came, though, in the same way as other investors. So Santa Fe did not get any type of rights beyond or in any way different from what other investors received in this financing.
spk09: All right, thank you. You know, so I have a couple questions on the Bissell study. You know, the data presented, you know, for Tago at the Kidney Transplantal patient, you know, World Congress of Nephrology, you know, there was one patient who had BK viremia. You know, can you sort of touch on how common, you know, BK viremia is in kidney transplant, and, you know, how is it going to be handled in the BESTO study? You know, will it be up to the investigator to withdraw the patient from the study, or will there be some type of protocol in place?
spk05: Sure. Thanks for that question, Pete. Steve, I'll turn that over to you.
spk02: Yeah, BK viremia, Pete, it's a great question. BK viremia is pretty common. It's common across all polypharmacy that is associated with the prevention of transplant rejection. It occurs in 10% to 20% of studies, and it does vary from site to site, country to country, and it does vary regimen to regimen. The standard practice for dealing with the viral load with BK viremia is to wean people off the immunosuppressant drugs that are required to prevent rejection, and that's done at the discretion of the PI depending upon viral load. And then there's this balance between letting the immune system of the transplanted individual fight back the viral load while still trying to protect the organ from rejection. And obviously that is up to the investigator on a site-by-site basis on how they want to manage that.
spk09: Okay. I mean, I don't know if you've disclosed, but is there an opportunity to sort of wean off of Tago and then sort of put him back on as time progresses?
spk02: So being an antibody, typically, you know, the administration, as you know, is every three weeks. And so if somebody's viral load creeps up shortly after dosing, you know, the investigator has a period of time where they could try to manage other immunosuppressants to see if they can manage viral load and get it back down prior to the next infusion. There is some flexibility on, you know, if you wanted to delay the next infusion of Tegoprabart a little bit. But as we know with biologics, you don't want to pause an infusion for too long due to increased risk of anti-drug antibody responses. Again, we'd be in close dialogue with PIs if that's the route that they chose to take. and we would give them guidance based on what we know from our preclinical and clinical data to date on how to manage that.
spk09: Okay. And then thank you for that. And another question, again, on the BESTO study, you know, one of the goals, you know, will be to reduce steroid use, you know, and there will be a steroid tapering, from my understanding, until they're completely removed from each of the patient's treatment regimens. You know, can you just talk a bit about, like, the clinical benefit it may bestow on these patients, tapering them off, and how do you plan to capture that benefit?
spk02: T.A., do you want me to take that one? Sure. Yeah, the steroids, Pete, as you point out, another great question is the primary difference between our Phase 1b study and the Phase 2 bestow study, where in the bestow study, you know, they will start weaning participants off steroids and fairly quickly after transplant, then they will be off steroids by six months. This is not an uncommon practice. Many sites globally do a complete steroid taper, and there is variability among sites that do that. The biggest thing that's beneficial here to patients is, again, the side effects of steroids can be significant. And so getting patients off as many of the immunosuppressant drugs in a cocktail of is critically important for managing side effects. And so we think it's a potentially great upside that we feel that with Tegoprobar on board, we can completely wean people off of steroids in a fairly rapid manner by six months.
spk05: As you know, people don't like to be on steroids long-term. It's DA. People don't like to be on steroids long-term. They've got just impact in terms of of blood sugar control, moods, ability to sleep, potential hair loss. So removing, if we're able to allow people to taper completely off steroids, that would be another win on top of removing the CNIs for patients.
spk09: And in terms of the clinical study, you know, any secondary or exploratory endpoints that you're going to use to sort of capture that benefit?
spk02: I mean, I don't think that's, go ahead, I'm sorry.
spk10: No, no, go, you can go.
spk02: I don't think that, Pete, there's any exploratory endpoints that specifically deal with the tapering of steroids, but obviously to be captured as part of the safety profile of TAGO, much like in our other studies. Okay, thank you very much.
spk05: We're going to look at removing steroids from both arms, so it would be comparative, but in terms of the steroid-specific side effects, one would see the benefits if one compared the data to historicals. Okay.
spk09: All right. Thank you very much, and again, congratulations on the financing and all the progress.
spk01: Thank you, Pete.
spk03: Your next question comes from Thomas Smith from SVB Securities. Please go ahead.
spk04: Hey guys. Good afternoon. Thanks for taking the questions and congrats on all the progress. A couple questions on our end. I guess first on the Phase 1b study, you mentioned that you've enrolled six patients to date and you're targeting a medical meeting later this year for an update. So if you could elaborate on some of the venues you're considering and just walk through sort of your expectations in terms of how many patients and the amount of follow-up you think you could have by then.
spk05: Thanks, Tom. It's DA. So we'll look at a medical meeting towards the end of the year. There are a number of kidney meetings, including Kidney Week, where we might be able to present. Since we already have six patients, as we just mentioned, even without counting potential new patients that come into the study, that would mean that all of the patients would have over 90 days, would most probably have over 90 days on drug by that point. So it would go from somewhere in the 90-day timeframe all the way out to a year or so.
spk10: Okay, got it. That makes sense. And then...
spk04: maybe just following up on the Sanofi investment. I understand they aren't pursuing solid organ transplant at this point for their CD40 ligand Frexalamab, but maybe if you could just remind us of the differences between Tego and Frexalamab, and then just thinking a little bit bigger picture. I was wondering if you could comment on sort of the broader strategic interest in the space and how you're thinking about partnership or other business development opportunities at this point.
spk05: Sure, so the two molecules, both ourselves and Sanofi, have an anti-CD40 ligand. And we're using a full antibody approach. And so the two molecules are probably, if you looked at the broader competitive landscape, the two that are the most similar. The difference has really been around strategy and where we've each Each company has chosen to focus. We've now chosen to focus on transplant. Sanofi's focus has been on larger population indications, including Sjogren's. They're running trials in MS, and they've discussed rheumatoid arthritis before. So that is, that's the difference in terms of the approach that we're taking.
spk10: Did you have a second part to the question?
spk04: Yeah, that's helpful. And then, yeah, I was just wondering if you could comment on sort of the broader strategic interest in the space and how you're thinking about business development and partnership opportunities at this point.
spk05: Yeah, so in terms of broader interest in the space, I think there are a lot of companies that are interested in the broader immunology space. It's become... a key area of focus for both smaller biotechs as well as large pharma. From our perspective today, in terms of business development, we are not looking to in-license. That wasn't one of the reasons why we did the deal. And we now have the capital we need if we hit our milestones to be able to take this drug and develop it all the way through to getting Phase II data and beyond. So right now, that's very much what we're going to be focused on, which is executing our trials and continuing to generate data with the GoproBART.
spk04: Got it. That makes sense to me. All right, guys. Yeah, I appreciate you taking the questions, and congrats again on the progress.
spk02: Thank you.
spk04: Appreciate it, Tom.
spk02: Thank you, Tom.
spk03: Your next question comes from Rami Katkouda from LifeSci Capital. Please go ahead.
spk07: Hey, guys. Thanks for taking my questions as well, and congrats on the update. A couple of quick ones from me. I guess, first off, are you guys using the IBOX scoring system in the study?
spk02: Yes, that's being evaluated as an exploratory endpoint. Great question, Rami. We're obviously really excited that, you know, agencies are starting to look at alternative endpoints like iVox, which could be, you know, really transformational as far as, you know, helping to assess early-stage clinical trial development and the ability to estimate long-term graft function and survival. So, great question.
spk05: And Rami, just to add to what Steve said, We're doing it as part of our collaboration with CareDx. So if you remember, we announced collaboration with CareDx, and that covers a number of biomarkers and algorithms, including iBOX.
spk07: Got it. Makes sense. And then going off the previous question, with recent regulatory successes in the ALS field, excuse me, can you touch upon potential routes to continue development of Tego in that indication?
spk05: Right now, this financing is going to allow us to advance to go pre-part in transplantation, and that's what we are primarily focusing on. We'll continue to look for other ways to potentially finance to go pre-part in ALS. As we've said before, and we believe in order to advance to go pre-part in ALS, what we would like to do is is a trial that would be well-designed and does have the best possible chance of success. To do a smaller trial, potentially one that would require less money, we don't think would help fundamentally answer the question of whether Tegopubard would work in ALS, and as such, wouldn't be the best solution for patients and for the field. So we're focused on transplant. We'll continue to look at ways to advance to go pre-BART in ALS. And if we do so, we do it in a way to have a trial that would be substantially set to truly be able to answer the question of how well to go pre-BART is working in that indication.
spk10: Got it. Thanks so much.
spk03: Your next question comes from Vernon Bernardino from HSC Wainwright. Please go ahead.
spk08: Hi there, Steve and Paul. Good afternoon and thanks for taking my question. Congrats on bolstering the balance sheet and I appreciate the presentation of the kidney transplant. This question has less more to do with that data and I apologize for the music so hopefully you can hear me well enough. but, and perhaps more to do with a study with the Gopher-Bart in IGAN. Given what you perhaps see as side effects, biomarkers that are looked at, and perhaps endpoints you're considering for, again, less to do with the kidney transplant, but perhaps a future study in IGAN, is there anything that is informing you that targeting anti-CB4 ligand as a strategy to perhaps replace calcineurin inhibitors is informing you that targeting anti-CB4 ligand is working. Because as you know, with the calcineurin inhibitors, you've seen that as dose goes up, so there's side effects for those, so there's efficacy, except for perhaps a bit of an exception that we've seen with vacuform. So I was wondering if anything there you've seen so far, and I know the patients, the number of patients have been low so far, so you don't have a concrete idea about how to answer this question. I was wondering if there's something you're seeing now that's perhaps informing you of future study and whether targeting anti-CD40 ligand is turning out as you expect. Sorry for the long preamble.
spk05: Vernon, thank you for the question. Steve, I'll turn that over to you to talk about what we're seeing and what we've seen in terms of biomarkers as well as how you interpret the data that we've generated today with regards to Goprabart's efficacy?
spk02: Yeah, sure, DA. Great question, Vernon. Thank you for that question. We've actually gleaned an amazing amount of data from very diverse indications to date in a very short period of time, as you know. We demonstrated very robust target engagement and in our ALS study, showing that we knocked down both T and B cell markers of target engagement in a very dose-proportional way. That translated into functional decreases in over 20 pro-inflammatory markers that sit downstream of co-stimulatory signaling. So again, very good functional data showing that tegoprubar modulated the immune system in that study, and it did so in a very rapid way. after the first infusion, which was quite exciting. Globally, across all of our indications, the safety profile of TACO continues to look very exciting and very encouraging. We haven't seen any serious adverse events in any of our studies, and these are patient population, as you just suggested, that, you know, these patients in transplant and ALS are very sick, and yet the drug has shown very good safety profile at this point in and very predictable pharmacokinetics as well. So that opens up an opportunity when you kind of summarize all of that data in total that as we have hypothesized in general going back over 30 years of data that blocking this pathway really has an opportunity in multiple autoimmune indications as well as in the transplant indications that we're pursuing.
spk08: Do you plan to present any, even if it's preclinical data, that continues to validate the approach?
spk02: I mean, in the preclinical side, we have multiple collaborations going on both with allograft transplant experiments as well as in the xenotransplant space. As we've mentioned, we have a collaboration with eGenesis that's ongoing. So we anticipate as we continue to execute on those primate studies, both in allograft and xenograft, that we will present them at some point at scientific conferences.
spk08: Perfect. And I'm glad to see the bolstered balance sheets, and so looking forward to more data. Thanks again for taking my question.
spk10: Thanks, Bert.
spk03: Ladies and gentlemen, as a reminder, should you have a question, please press the star followed by the one. Your next question comes from Matt Kaplan from Leidenberg-Talman. Please go ahead.
spk06: Hi. This is Raymond from Matt. Thanks for taking the question and congrats on all the progress. I guess a question I was thinking I was reading, I read this recent New York Times article about transplantation, very compelling. And I was wondering, you know, how are doctors and patients responding to the initial data? in your renal transplantation program? And is that potentially building more awareness to trial? And I have another question. Thanks.
spk05: Thank you. That is a wonderful opinion piece that was published in the New York Times. And I encourage really everyone on the call, if you haven't had a chance to read it, to do so. Steve, let me turn it over to you in terms of awareness the need and the receptivity that physicians that you've been talking to have had to our data?
spk02: Yeah, sure. Thanks, Dave. And a great question. I agree. The receptivity has been absolutely amazing. I mean, there's a long history, as we know, of blocking this pathway going back 25 to 30 years with many different antibodies in preclinical models in particular. But the field was set back in the early 2000s with the first-generation antibodies. And yet to this day, blocking this pathway and blocking CD40 ligand in particular has been the most potent way to prevent transplant rejection. It was also a very, very potent strategy to ameliorate autoimmune diseases in multiple different models. So the second-generation antibody, Tegoprobar, that we now have clinical data for us, has really generated an incredible amount of excitement as we've reached out to potential sites for the Bustos study and doing feasibility. And the PIs have been very impressed with the EGFR data that we have to date, albeit on a handful of patients. But folks have been very excited because of the opportunity to re-engage this pathway after so many years.
spk06: Yeah, that's great. Thanks for all that color. I guess this other question, it might be too early to say, but with the kind of impressive data you already had so far, and thinking about the MISTO trial, does the magnitude and duration of any potential EGR benefit over tech alliance might potentially dictate the path forward clinically or regulatory? Thanks.
spk05: Yeah, so we obviously would want to show We're looking at EGFR, and this is a superiority study, so we're going to want to see a statistically superior delta in terms of EGFR versus standard of care, and the larger that delta, the better. I would note that even small deltas in EGFR can make a difference clinically. So, for example, we know that as early as six months, if you attend point delta in EGFR means an 11% delta in the chance of a post-transplant patient being hospitalized. Similarly, the lower the EGFR, the more likely the patients are to be hospitalized multiple times. And finally, of course, EGFR is associated with the risk of graft failure. So the lower the EGFR, the higher the risk of that kidney being lost. And that graph, that increase is almost exponential, pretty much exponential once one has an EGFR that goes below 50 or 55, which is the mean EGFR in the year post-transplant. So if we would be able to move the needle in those patients by even only 10 points, that would be very meaningful since we're looking at an exponential increase in terms of risk. Steve? I appreciate that. I was going to see if Steve wanted to add anything.
spk02: Yeah, no. Yeah, I agree. I mean, even small differences in EGFR based on very large retrospective studies can really impact long-term graft function and survival. even smaller differences will be very, very important.
spk10: Thanks for that. Thanks for all the progress. Thank you.
spk03: And there are no further questions at this time. I will turn the call back over to Mr. Groh for closing remarks.
spk05: Thank you for your assistance, operator, and thank you all for joining us today on this call. Have a great evening.
spk03: Ladies and gentlemen, this concludes your conference call for today. We thank you for joining, and you may now disconnect your lines.
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