Akari Therapeutics, Plc (AKTX) Earnings Call Transcript & Summary

Welcome to the Akari Therapeutics business update conference call. [Operator Instructions] I would now like to hand the conference over to Peter Vozzo, Investor Relations representative for Akari Therapeutics. Please go ahead.

Thank you, Sarah, and good morning, everyone. Before we begin, I would like to remind everyone, this call will contain forward-looking statements, which are subject to risks and uncertainties. Any statements regarding future events, results or expectations are forward-looking statements. Please note that these forward-looking statements reflect our opinions only as of the date of this call. We undertake no obligation to revise or update these forward-looking statements in light of new information or future events, except as required by law. Information concerning factors that could cause actual results to differ materially from those contained in or implied by such forward-looking statements are discussed in greater detail in our filings with the Securities and Exchange Commission, especially under the caption Risk Factors. Note, we will address questions after the prepared remarks. [Operator Instructions] I will now turn the call over to Clive Richardson, Chief Executive Officer.

Thank you, Peter, and good morning, everybody. And the purpose of this call is to run through our COVID-19 pneumonia development plan that were described in the press release earlier this morning. And I'm joined by Professor Tim Higenbottam, who is the President of the Faculty of Pharmaceutical Medicine of the Royal Colleges of Physicians U.K., who will, after a brief introduction by myself, talk a little bit more about the disease itself, the rationale for our compound in this disease and clinical program designs. So just kicking off, what I really want to do, initially, is just sort of highlight, I guess, the 2 primary features of what we were getting across in the press release. The first of which is the mode of action of nomacopan. And as I'm sure many of the listeners are aware, it has this unique mode of action inhibiting both the complement and the leukotriene pathways. And as we'll discuss later on, we believe that this dual inhibition, which allows multiple pathways to be inhibited, is increasingly fitting in with our growing understanding of how COVID pneumonia works. And as Tim will explain, it seems increasingly clear that there are multiple pathways involved with COVID pneumonia, and an effective treatment has to manage those multiple pathways. So that's the first feature that we'll be discussing, which is the rationale behind the use of nomacopan in COVID. The second area we will be talking about is actually our approach to the clinical study of our program -- of our compound in COVID. And that's really broken down into 3 parts. We are doing observational studies, and the rationale behind that is trying to identify markers, and that will help us identify particular patient groups that either may be more susceptible to COVID pneumonia or may benefit disproportionately from the mode of action of our drug. So there are these observational studies that are ongoing, then there are a series of proof of principle studies, and we're treating patients in the U.S. and Brazil at the moment. And the rationale behind these proof of principle studies is to confirm safety, dosing, et cetera, in what is a very fragile patient group. And then these proof of principle studies, they then naturally lead on to these larger randomized studies. And again, we'll talk in a little bit more detail about them and the geographies we're focusing on: Brazil, the U.S. and the U.K. And the idea there is that based on similar study designs, one will be able to aggregate the data or combine the data across these different geographies. Now before I pass on to Tim, I just want to emphasize a sort of couple of points. The first thing is that we are treating COVID pneumonia, and that is -- affects perhaps 5% to 10% of COVID patients, and these are the patients that are hospitalized and require supportive oxygen, and tragically, in many cases, maybe leads to long-term organ damage and, indeed, mortality. And this treatment of COVID pneumonia patients is a treatment regime that sits alongside either vaccines or antivirals. It's not in order to replace them. And the last point I want to make is that just this COVID program we're discussing today clearly is part of a much larger series of clinical programs that Akari is involved with. And perhaps one other program I briefly want to just highlight is our Phase III thrombotic microangiopathy program. And the reason I want to highlight that is because, interestingly, it shares a lot of pathology features with COVID. And it's again, one, the whole series of reasons why we believe our drug may be relevant for a treatment here. So lastly, and I'll then hand you over to Tim, is just a quick reminder that we're talking about nomacopan and that it binds complement and LTB4. LTB4 is important because it's a neutrophil attractant that draws neutrophils to the lung, and it's these neutrophils that are involved in the cytokine storm. And hence, inhibiting that, there's a strong rationale for that. Then separately, it also inhibits the complement pathway, and as we'll shortly hear, that complement pathway increasingly implicated in COVID pneumonia and to do with thrombotic issues and the risk of long-term organ damage. So I'm now going to pass over to Professor Tim Higenbottam. Thank you. Over to you, Tim.

Thank you, Clive, and good morning, everyone. I'd like to first of all say that we have, if you like, started on a very hard journey. We've experienced 8 months now of the COVID-19 illnesses, and we've learned an enormous amount over that time. In particular, we started with our concerns of ARDS, acute respiratory distress syndrome, like the other coronavirus illnesses and H1N1 pneumonia. And these were characterized by extremely dangerous states for patients and associated with quite widespread cytokine storms. What we've learned in this illness, and this happened really with publications coming out in March from China, that the cytokine storm was closely associated with very marked elevations of complement C5a. In fact, it mimicked it. And one was sort of surprised that it hasn't been considered that the complement, as is well known, can, when activated, bring on essentially the cytokine patterns that we were seeing in the later disease. This is quite an important detail because it leads on to other observations that were made by GAO at that time in March. And the first of those was the evidence that was thrombosis occurring in the alveolar capillaries. These are the blood vessels in the lung from which oxygen is being taken, and in early samples of people in the disease process who had died for a number of causes, there was evidence of this extraordinary microvascular thrombosis or thrombotic microangiopathy, as Clive was touching upon, that we see in some of the diseases that we're already treating. But after GAO's observations, [ micro ] in the United States picked up a very striking finding, and it was that there was C5a and C5b-9, this is the terminal factor, which leads to the major attack complex from complement and punches holes in cells, this was colocalized with the viral-containing endothelial cells. And this is a surprising finding, but it was also found not just simply in the lung, but also in systemic blood vessels. And in early stages, not extensively, but it progressed with time. And the detail in practical terms is that this was associated with a striking injury of the endothelium. And in the lung, this was pointed out by a guy called Ackermann in Germany, working with Boston, using some archived H1N1 lung specimens. And using electron microscopy, they demonstrated that in the alveoli of COVID-19 pneumonia patients, the endothelium was wrecked. And not only was it wrecked, the amount of damage to the endothelium was 9 full times higher than H1N1 flu. And this is important because we do know that complement is also activated in H1N1 flu as well as the earlier coronavirus pneumonias, but it was very much more selective and impressive. And the point about it was, in addition to the injury, there was evidence of regrowth of new vessels indicating that probably it was going to be chronic disease that follows this sort of injury. And that's what we're beginning to learn about, not only in the lung, but also in the systemic circulation. So that is what I described as surprising, but you could start to put together a pattern of disease, which is a 2-step process. The vast majority, as Clive said, people who get COVID-19 recover quite satisfactorily. And only about 5% to 10%, probably less than that, now that we're testing so many people, actually progress to the critical disease. And these people present with either breathlessness or with a low oxygen saturation measured with a cutaneous capillary oxymeter, very simple measurement. And this probably is a very good indicator of the switch from the viral stage of the disease with cough, with loss of taste or smell but without extensive disease. When this stage starts, it progresses very rapidly, and it occurs around 9 to 12 days. And this is usually when the viremia replication is actually falling. And this is again a very important detail in why we believe this treatment has very good parallel use in patients who are already on viral -- antiviral treatments such as remdesivir. And I just want to emphasize the point that the vascular injury is causing end organ damage. And this probably will be as we are undertaking, a lot more studies now and follow-up of patients after the disease, we're going to pick up quite a lot of chronic disease. And this has some relevance, as I'll touch upon later in understanding some chronic, more common diseases in terms of lung disease and other organ problems. So I just want to come back to the cytokine storm, the complement activation. These 2 are occurring in parallel. We know that nomacopan very substantially blocks the conversion of C5 to C5a, and C5b-9 production falls, and therefore, stops the major attack complex forming. We also know that leukotriene B4 also limits the mobility, the chemo attraction of neutrophils within the lung. And this is very important probably as the disease progresses, and you begin to get ARDS where the lungs change from largely lymphocytic to a lot of neutrophilic infiltration and injury. And if we then look at the operation of nomacopan using some of the preclinical data, we've got some very interesting model work. Polymicrobial sepsis in the mouse model demonstrates the cytokine inhibition is broad and widespread, picking up the major elements of change that can cause injury but also the migration of inflammatory cells and antigen-presenting cells into the lung. And if you look then at what is, I think, a very interesting model of immune complex alveolitis, you can see that if -- when we -- with the recombinant process, knocked out the LTB4 on the protein or the C5 on the protein, looking at the single inhibition from each of those components of nomacopan and comparing it where the 2 are together in the same protein, you can see additivity, additivity between these 2 effects. And that's why we think this is such an interesting therapy linked not just simply to the blood-borne levels of cytokines and complements but also at the heart of the disease, the histopathology of it. So now moving on to what I describe as our growing sort of information base. We have essentially a sort of emerging treatment guidelines for this disease. We can see that we've got to inhibit multiple pathways, and we would argue that the complement cytokine pathways can be hit by nomacopan. We also think that patients who have started with breathlessness probably have entered a critical stage where the disease advances very quickly. And currently, we're arguing that these patients should be treated in all haste as soon as the disease is confirmed with RT-PCR and that they've got evidence of hypoxemia. That is an oxygen saturation below 93%. And we're quite comfortable with the standards of care currently being used. We don't believe that these hold back this illness, and we're seeing the same mortality rate in ICU that we were seeing some 2 to 3 months ago before both these 2 medications came in as standard of care. So we're now looking at how to do our randomized controlled studies to work this out. But I just want to say before getting into this, as Clive said, we've gone in already to start Phase III studies in inflammatory diseases where complement is intimately involved. And we have got excellent data in terms of pharmacokinetics through our single and multiple ascending dose regimes, and we've got excellent pharmacodynamics. And we know that we can stop and obsolete the complement activation over a period of 3 to 4 days in some of these extraordinarily active inflammatory conditions that I've just described. So with that, you have brought a very strong base to move into the clinical setting of treating people with randomized controlled studies. And what we've tried to come up with is an approach that could be used multiply in a lot of different countries where the simplicity of the study does not interfere with the enormous work that has to be done when people become critically sick. We've designed the study 2:1 randomization so that most patients will get the active treatment. We only include those patients who've got a need for supplementary oxygen, and we do not encourage the use of the product yet in people on a ventilator, the mechanically assisted ventilation with intubation. The primary endpoint is very simple, and it is simply the ability to breathe air and to sustain a normal oxygen saturation above 93% for 24 hours, and then people can go home. Very early work is indicating that, that seems to be possible without having to have the patient go for the full treatment regime that has been provided on the early studies with the other inflammatory diseases, which goes up to 14 days. People seem to manage to be able to be discharged home without continuing the injections. The other thing is that we would have secondary endpoints, obvious ones of survival and need for intubation assisted ventilation. And we're looking to study in groups in these studies, patients -- of about 60 patients. And we think we could probably detect improvement in terms of being able to be discharged. And we've taken very detailed analysis from the audit of intensive care patients in the U.K., which has been capped for the last 6 months and have got very good predictions in terms of median values for when patients can be discharged. So we're very comfortable to have nomacopan used with standard of care. And I would emphasize, before turning over to Clive, we've got very good safety data on this product, with a lot of patients covered for a number of years. Some people are still on treatment for regular therapy. And the major side effect numerically is intermittent pain on the injection site, which does not require treatment and disappears over a short period of time. So just one other concluding comment, and that is nomacopan only works for a day, that's why we have to inject it daily. So it's very different than an antibody therapy, which could be working slowly and effectively, but taking several days or weeks to actually control the complement. And the other thing is it can reduce the immunity of people. But with nomacopan, it's gone after 24 hours. So we have a product that has safety associated with it and immediacy of action. So I'll turn over to Clive now to carry on with the further descriptions. Clive?

Thank you very much, Tim. And I mean, just as a sort of observation, I mean, it is just quite extraordinary how over time, knowledge of COVID has increased. And the challenge for a company like us, and I think for all companies operating in this space, is to adapt to this changing environment. And it's obviously extremely exciting. Now I'm now just going to quickly go through -- so Tim very succinctly explained the rationale for nomacopan, the way the disease works and the sort of rationale behind our clinical study design. So I'm just going to spend a few minutes talking about our programs. And the first, which I touched on briefly at the beginning, is a sort of biomarker, it's an observational biomarker study. And the first phase of that has completed. So we'll be analyzing that data. And then there's a longitudinal study that follows on. And what we're seeing from these biomarker studies is to understand better if there is a patient group that will particularly benefit from nomacopan. And so, for example, by analogy in the TMA, the thrombotic microangiopathy disease, we referred to earlier, one of the markers for treatment is elevated C5b-9. Now that may not be the case here in COVID, but we're better -- we're trying to better understand if there are particular patient groups that will benefit from treatment and that clinicians, et cetera, should focus on. So that biomarker study because what is clear is the patients are pretty heterogeneous, there's a lot of differences between these patients. Then we have what we call proof of principle studies. And in the U.S., that, for example, would include expanded access programs. And we're also doing them in Brazil as well. Those studies are ongoing. In Brazil, we have completed recruitment to our proof of principle study, and there will be a drug -- the data will be reviewed by a safety board. And if that data -- if the data is safe, that then allows us to go on to the next stage, which is the randomized study. And these proof of principle studies are there to confirm the safety of a drug, the dosing is correct and, obviously, hopefully show an early efficacy signal. And they're particularly important because these patients are receiving multiple other therapies, and these patients are extremely fragile. So clearly, when you are further suppressing their immune system, it's very important to make sure it's safe. And it's also -- given they may have elevated levels of complement and other markers, it's very important to make sure that you're controlling [indiscernible] as well. So those studies and they are ongoing, and we're treating patients there. Following those, and assuming -- and they are successful, we will then move into these larger randomized studies. And based with a study design that Tim just explained 2:1, 60 patients, and we would be looking to do them across 3 or more geographies. And the geographies we're focused on at the moment are Brazil, the U.S., and the U.K. And Tim described the primary endpoint there, oxygen normalization and, obviously, there are a whole series of secondary endpoints, mortality, length of stay in hospital that we'll be measuring as well. And we're looking to treat patients, as Tim said, very importantly as quickly as possible as when they enter the hospital. And we would hope that treatment would be -- it'll be up to 14 days, but we hope that the treatment would be for a shorter period of time. And so just want to now summarize where we are. So hopefully, people who are listening to this understand the rationale for why we believe nomacopan could be an effective treatment in COVID. As we mentioned, we're blocking the complement in the leukotriene pathways. These are 2 innate immune pathways that underpin both the complement issues that Tim referred to, the vascular problems and the cytokine storm. And then -- so that's for rationale. And then our job is obviously to evidence this in a clinical population, which is exactly what we intend to do. And I think the differentiation that we have is that we are attacking these multiple pathways. So we are in these clinical groups. We're doing these observational proof of principle studies. We aim to be reporting further on them in Q4. And I think my last comment is an important one, and that is -- that although we're talking here about COVID, what we're also gaining is important knowledge about how nomacopan works in the lung as well. So this data we'll collect is also extremely relevant for potentially other lung conditions, whether they are induced by viruses or are ongoing chronic lung conditions. And in reality, it's the fit -- what we're always trying to find is the fit between our drug and the disease pathology, which, after all, is what attracted us to COVID in the first place. So that concludes the remarks from Tim and myself. And I now move on to just -- I will just read out some of the questions, and I will either ask them myself or put them over to Tim.

And so Tim, I'm going to be mean and ask you the first question, which is, we've been asked, which is the relative importance -- if it is possible to answer this, the relative importance -- or your perception on the relative importance of the complement pathway and the leukotriene pathway.

Yes. Well, thank you very much, Clive. It's a tough one to answer. But the relative importance probably is simply on the basis of the progression of the disease. I've described what I think is a 2-step process, but there is clearly something that happens once the lung starts to get injured. Once the vascular changes start to appear in the lung, which are in some reports very clearly separate from the ARDS that occurred later. And this is particularly from -- work from an Italian group led from Sweden, [indiscernible], but they showed very nicely that the initial phase is one of injury of the endothelium, particularly of the alveolar sector where the gas exchange occurs and the reduction of blood flow to the lung. About 2/3 of the patients studied later, histopathologically, have extensive and standard acute respiratory distress syndrome with edematous lungs, not air-filled lungs, and these have extreme collections of inflammatory cells such as neutrophils. And it is probable that there are 2 steps within the phase of people being in the critical care units, one where they have this early endothelial injury, which progresses around the body, developing thrombosis and the like, and then the secondary one where they get quite intense neutrophilic injury of the lung. And I think it's that subtle -- a bout of sequential changes and the inflammatory changes that makes this product so interesting. I hope that helps to answer that question, Clive.

Thank you, Tim. I've got another -- I'll give you one other question, and then I've got some sort of questions from myself. And that was, how could this data be relevant for other lung conditions?

Well, I think the interest here is that the illness is a virally initiated illness. And if we just simply think about it as a microbial illness where the innate system is triggered in order to control the invasion of the body from either virus or bacteria. This is a very important process of protecting the body. But when it becomes dysregulated, it becomes quite significantly damaging as we're seeing in COVID pneumonia. What we suspect may be happening in some of our chronic lung diseases, and there are broad hints on this, but this is looking to the future, but broad hints that complement activation is occurring in interstitial lung disease or idiopathic pulmonary fibrosis. And I think this is quite an important area, particularly as people who experience winter colds and infections, seem to deteriorate their function in a step-wise way when they get these exacerbations. Similarly, there are other illnesses where complement has been indicative of the inflammatory process that occur in the lung, and this may surprise many of you. But in primary pulmonary hypertension, there is evidence of ongoing inflammatory changes, and behind that sits a broad activation of complement. So I think there are a number of clues now that we are looking at chronic disease processes, which probably will become more revealed as we follow up on the COVID-19 patients, but it may be giving us a clue as to how to tackle some of these other fatal diseases where we don't really have an effective way of stopping progression. Thank you, Clive.

Yes. Thank you, Tim. So that's great. We have some questions around time lines. And I think I would refer people where to the press release and the comments made earlier, and that really is around the proof of principle studies and the observational studies where we're hoping to provide more data in Q4. So I think that's a response to that. In terms of another question around availability of patients. So -- but that is obviously an extremely difficult question because as everyone is aware, the incidence of COVID has been varying a lot, not just between countries, but within countries over time. And really, this is part of our rationale in focusing on studies in multiple geographies because Brazil is clearly not in a good place at the moment. The U.S. -- well, I won't comment. And the U.K. is -- there's a lot of discussion there about a second wave. So I think having a multinational study is really quite important in an environment where the prevalence or the frequency of COVID that is varying quite a lot. And quickly, another quick question is about how long we're planning to dose patients. And so in the studies, it will be up to 14 days. But if patients are discharged, then it'll be less than 14 days. It is delivered subcutaneously so patients, in theory, can continue to treat themselves at home. And in fact, in some of the geographies, it would allow patients to be treated in the community, which is not relevant, for example, to the U.S. It's clearly relevant in other countries. So it's up to 14 days. But as Tim mentioned, you expect to see a very, very rapid effect, not necessarily -- well, certainly, a sort of biochemical effect, and we'll obviously have to see how that translates into a clinical effect. And we are creating -- and the best time to give these patients is as early on as possible. So -- and I think Tim mentioned that as well. We would like to treat these patients as early as we can when they get into the hospital environment. And I think those are -- I mean, there are several other questions. But Peter, those are most of the questions. And I'm conscious we've gone over the half hour now. So I was going to stop at this particular point. So I don't know if I have to be the operator, but I think we will stop the webinar at this point in time. So I just want to thank everybody very, very much for participating and very much look forward to providing additional data over the next few months on our program. And I want to particularly thank Professor Tim Higenbottam for taking his time and explaining so succinctly about the disease and its functioning. So thank you very much.

Thank you. Thank you very much.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.