Alector, Inc. (ALEC) Earnings Call Transcript & Summary

Good afternoon. It's my pleasure this afternoon to introduce you the company, Alector. Presenting for Alector company is Shehnaaz Suliman, who is the President and Chief Operating Officer. I'm Brian Cheng, the associate on Tazeen's midcap biotech team at Bank of America. Shehnaaz, I believe that you have uploaded a deck here, and I will let you take it from here.

Thank you, Brian. Good afternoon, everyone, and it's a great pleasure to be here today to provide an update on Alector. My name is Shehnaaz Suliman, and I'm the President and COO. I joined the Alector team in December because, along with everyone here, we share a strong belief that our work is scientifically and clinically meaningful and has the potential to be transformational for millions of patients living with dementia. As a physician, drug developer and dealmaker in the industry for over 20 years and having run global clinical trials in Alzheimer's disease, I appreciate the nature of the challenge. And at Alector, we view these as opportunities. We are audaciously, relentlessly and optimistically as committed as ever to changing the course of neurodegeneration. On Slide 2, this is our forward-looking statement. We'll be making forward-looking statements that involve risks and uncertainties. On Slide 3, we describe our vision. Our vision here at Alector is to develop therapeutics for dementia and neurodegenerative diseases so that these can become diseases of the past. Yesterday, at our company, we had the privilege of hearing from the daughter of an FTD patient, who lost her father who had FTD and who reminded us why we should be doubling down our efforts to help bridge the gap between despair and hope for these patients. On Slide 4, we describe how we are leveraging the power of human genetics, which has enabled a new therapeutic strategy. We know from GWAS that the vast majority of risk genes for Alzheimer's are associated with microglia, the brain's primary innate immune cells. As shown in red in this Manhattan plot, our therapeutic strategy is directed at targeting these risk genes in order to enhance the actions of microglia, as we now know that these actions are central to maintaining neuronal well-being and brain homeostasis, including the functions of immune surveillance, the removal of pathological proteins such as A-beta and modulating synaptic plasticity, among others. On Slide 5, we talk a bit more about why we're different. Arnon, our Scientific Founder and CEO, has significant depth, vision and credibility in having committed his life's work to the study of neurodegeneration. As a result, this enabled us to be at the forefront of pioneering immuno-neurology, an approach to this drug discovery and development which integrates the fields of human genetics, immunology and neuroscience to recruit the brain's immune system to address neurodegeneration. On the left, you can see that our approach really anchors to genetically validated regulators of the brain's innate immune system. And on the right, we are targeting genetically-defined patient populations and rigorously employing the use of biomarkers to enhance the probability of success. On Slide 6, which is our pipeline slide, I'm going to spend a minute on this slide. We are advancing a broad portfolio of first-in-class and best-in-disease antibody therapeutics targeting multiple neurodegenerative diseases. We currently have 4 programs in the clinic. Starting at the top. We have 3 programs in our progranulin franchise, including AL001, our lead program in FTD progranulin patients, for which we are on track to enter Phase III pivotal trial in the second half of this year. The ongoing Phase II trial with 001 includes patients with both progranulin mutations as well as C9orf72 mutations since these have TDP-43 neuropathology, which is common to frontotemporal dementia. AL101 is the next program, and it's a follow-on program with a potentially different PK profile that may be better suited for chronic administration in indications such as Parkinson's or Alzheimer's disease. In addition to the progranulin franchise, we have several other programs targeting risk genes for Alzheimer's disease, including TREM2 and SIGLEC 3 immune checkpoint targets. These are partnered with AbbVie, and here too we plan to initiate a Phase II TREM2 study later this year. AL014 is targeting MS4A4A, a transmembrane receptor and one of the other top risk genes for Alzheimer's disease. Our antibody is designed to mimic and exceed the protective variant of MS4A4A, which is known to be associated with lowering the risk of Alzheimer's disease. Turning now a moment to our immuno-oncology program. AL008 is a dual-unction antibody that has the effect of binding SIRP-alpha in such a way as to drive internalization and degradation of the receptor while also engaging SP receptors on the cell's surface to boost macrophage function. As one of our scientists has said, we're stepping on the gas and cutting the brakes at the same time. This was recently partnered with Innovent to drive development in China while enabling us to retain rest-of-world rights. Underneath this, Alector is underpinned by an expansive research pipeline with multiple novel immuno-oncology and immuno-neurology research programs, which we continue to progress. On Slide 7, this describes our lead program, AL001, which is being developed for frontotemporal dementia in patients that have a progranulin mutation. Let me spend a minute painting a picture of what this disease is. The MRI picture shown below describes the frontal and temporal atrophy, which is the hallmark of the disease and which gives rise to 2 variants: a behavioral and language variant. We have heard patients' family members describe this as the cruelest disease you've never heard of, for 2 reasons. It's an aggressive and insidious form of dementia because it hits people hard and early; and secondly, because of the ripple effect on family members, who immediately must grapple with a 50% chance of being affected. Unlike Alzheimer's disease, in which there's a high index of suspicion with aging parents or relatives in their 70s or 80s, with FTD, it's different. The age of onset is young, well below 60 in some cases, when adults are still contributing and productive. Patients and families can live through long periods, sometimes years, of havoc and suffering, enduring impulsive, cruel and violent behavior from people they love and the cascading effects on all aspects of family life, as well as the future projections that they too may become what they are enduring. Patients ultimately die about 7 to 10 years after being diagnosed. We believe there are 170,000 or so patients in the U.S. and EU, of which 15,000 patients have progranulin mutation. There is no treatment for this disease. Mechanistically, on Slide 8, we describe the scientific rationale for targeting progranulin, which is causal for FTD and comes from our understanding of the loss-of-function mutations in the disease. We have 3 different variants -- we have 3 different components here. We can talk about a homozygous situation in which patients who are homozygous lose both copies of progranulin gene and have a 100% decrease in progranulin levels; as a result, developing a very severe form of dementia and early death. Patients who are heterozygous for the mutation have one good copy of progranulin and have about a 50% reduction in levels. They still go on to develop frontotemporal dementia because of high penetrance. These are our target patient population. There are also some people with minor regulatory mutations that result in a 10% to 20% loss of function of progranulin, which cause them to have an increased risk of developing Alzheimer's or Parkinson's. The graph on the right in progranulin carriers show how both plasma and CSF levels are diminished relative to healthy controls. On Slide 9, we describe the goal of our treatment. It is, therefore, to restore progranulin levels back to normal by inhibiting a receptor, a degradation receptor, called sortilin. By inhibiting the degradation receptor, we have the effect of increasing the half-life of progranulin by two- to threefold, with the resultant restoration of progranulin levels back to the normal range. On Slide 10, we show how increases in progranulin results as a result of this approach in nonhuman primates. We know that sortilin levels are inversely correlated with progranulin. We were able to demonstrate that 001 nearly completely blocks sortilin, as seen in the bar chart on the far left, while it enhances progranulin levels in both plasma and CSF in nonhuman primates, as shown by a three- and twofold increase in levels, respectively. We were also able to show in mice that we can reverse the cognitive and behavioral deficit seen in aged FTD in mice. With this encouraging animal data, we proceeded to the clinic, and Slide 11 shows the overall development program for 001. As a reminder, this is a first-in-class and best-in-class program with fast track designation. In both the Phase Ia and Phase Ib studies in healthy volunteers and patients, 001 was shown to be safe and well tolerated and demonstrated evidence of target engagement. In the Phase Ib, we looked at both asymptomatic and symptomatic mutation carriers, with some of those patients rolling over into the Phase II. The Phase II is an open-label study in which we study patients with both progranulin mutations as well as C9orf mutations as well. The Phase II is currently ongoing, and we hope to present data, further data, from the Phase II at a conference later this year. The Phase III pivotal study is not gated on the Phase II and will be initiated in the second half of this year. We hope to share the Phase III design with you at a conference in the second half of this year. We will have had the benefit of registry data to model the powering assumptions for this study as well as regulatory input. We feel a great amount of pride here at Alector for having gone from Phase I to Phase III in under 2 years with this program. On Slide 12, this is a snapshot of the Phase I data in which at a wide range of doses from 2 mg per kg up to 60 mg per kg, we demonstrated a tripling in the level of progranulin in the plasma of healthy volunteers, which importantly lasted over a month. On Slide 13, in the Phase Ib study in patients, we were able to also demonstrate restorations of plasma progranulin levels back to physiologically normal ranges, as evidenced by this data from 5 asymptomatic mutation carriers. Encouragingly, we saw a sustained increase in plasma progranulin for up to 60 days after dosing. This ability to restore progranulin levels in plasma was learned in the CSF, as seen on Slide 14. Here too, we showed that 001 was able to restore CSF progranulin levels back to normal in both asymptomatic and symptomatic mutation carriers, as shown in the dark blots in the middle and the right. You can see how this compares to healthy volunteers as shown in the green dots on the far left. These are actual individual patient data. On Slide 15, we also evaluated over 1,000 CSF proteins, as represented as individual dots in the scatter plot. This is the data from the CSF of 8 symptomatic mutation carriers who we treated with 001. What we found interesting were 2 clusters: first, the cluster of red dots in the bottom right that represent proteins such as progranulin that we know to be decreased or downregulated as well as lysosomal and other disease-relevant biomarkers that are downregulated in the disease and which following 001 treatment were upregulated. Conversely, the blue dots on the top left represent neuroinflammatory markers that would usually be upregulated in the disease and which after treatment with 001 we were able to downregulate. So taken together, we believe that this is a nice demonstration that 001 is having an effect on reversing the protein signature associated with disease-relevant biomarkers in FTD patients. On Slide 16, we describe the potential significance of neurofilament levels and its association with clinical risk. Neurofilaments represent axonal degeneration in the CSF and plasma and have shown to be a predictor of rate of brain atrophy and cognitive decline in FTD. The chart on the left shows that neurofilament levels are elevated five- to sevenfold in FTD patients relative to normal. This is from registry data. This is consistent with what we would expect in symptomatic patients who are experiencing a high level of neuronal cell death. Neurofilament levels have also been shown to correlate with therapeutic effect with ofatumumab and teriflunomide in MS and spinal muscular atrophy. And on the right chart, you can see how neurofilament levels start to decrease 3 to 6 months following treatment. Let's look at our own data. On Slide 17, in our Phase Ib study, we looked at neurofilament levels. And here, we have the data from 5 symptomatic FTD patients. These patients received 3 doses of 001 at baseline, week 2 and week 4. This data is taken at about 2 months after the last dose and shows a trend towards reduction in neurofilament of 14% compared to baseline. We find this trend encouraging given that it's preliminary data and a small number of patients. Importantly, we did not see any increases in neurofilament, which our extrapolation from the GENFI and other registry data suggests could be as much as 24% increase over a year. Let's switch gears now to 002, our next program, our second immuno-neurology therapeutic, which targets TREM2 and is being developed for the treatment of Alzheimer's disease. TREM2 is an activating receptor on microglia. It's one of -- it's probably one of the second highest risk factors known to be associated for Alzheimer's disease, and we can think of it as an immune checkpoint for microglia. The homozygous loss of function leads to dementia very early on, whereas the heterozygous loss of function increases the risk of developing Alzheimer's disease by threefold. Importantly, there is a gain-of-function mutation or SNP associated with increased TREM2 expression which is found to be protective. Our goal with AL002 is to develop this as a TREM2 agonist which aims to mimic the protective variant of TREM2 and, in so doing, optimize microglial signaling. On Slide 19, we show you data from mice in which we were able to show that AL002 could strongly induce microglial proliferation by about fivefold, as shown in well-type mice in the bar on the far left, whereas on the right we show the data in 5xFAD mice showing that the murine antibody is able to recruit microglia to the site of plaques and also lead to a compaction of these plaques. Separately and not shown here, we were also able to show that 002 could reverse cognitive and behavioral deficits in mice. On the next slide, we show the development strategy for 002. The overall plan here is fast to proof of concept, and following the completion of the Phase Ia study, we are now able to initiate a Phase II study in the second half of this year. We did have a Phase Ib study recruiting patients, but due to COVID, that study will no longer continue, and we intend to move straight into a Phase II study as soon as we are able, likely in the second half of this year. This continues to be one of the most advanced TREM2 Alzheimer's programs that we are aware of. On Slide 2 (sic) [ Slide 21 ], this is a snapshot of data from the Phase I. And here, we are able to show that in healthy volunteers we see a dose-dependent reduction in soluble TREM2 in the left chart, as well as a dose-dependent increase in a biomarker associated with microglial activation, thus confirming evidence of target engagement. On Slide 22, our third immuno-neurology program, 003 is shown. This is also being developed for the treatment of Alzheimer's disease and targets an immune checkpoint called SIGLEC 3. SIGLEC 3 is a very prevalent risk allele present in about 80% of Alzheimer's disease patients and inhibits the function of microglia. The loss-of-function mutation in SIGLEC 3 is protective against Alzheimer's disease. As a result, we developed an antibody to block the inhibitory function of SIGLEC 3 and mimic the protective allele, which we believe will improve the survival, proliferation and function of microglia. On Slide 23, we provide a bit more detail of the 2 variants of the SIGLEC 3 allele. In the PET scan below on the left, we see that the protective allele lowers SIGLEC 3 expression and leads to increased A-beta clearance. Conversely, the risk allele increases SIGLEC 3 expression, leading to diminished A-beta clearance. This observation is also learned in the dark blots on the right from the FACT assay. So our goal with 003 is to functionally convert the risk allele to the protective allele, activating microglia and, in so doing, enhancing its function. The development strategy for 003 is shown in Slide 24. Our Phase Ia study in healthy volunteers has been completed, and we achieved the safety end point and secondary PK and PD end points in the study. The Phase Ib in Alzheimer's disease is currently ongoing. We hope to have data to share with you from this study at the end of this year. We hope to initiate a Phase II study in Alzheimer's disease next year. On the next slide, we show some data from our Phase Ia study in healthy volunteers, where we demonstrated that we're able to achieve a significant and sustained decrease in soluble SIGLEC 3 at different dose levels. Looking ahead for the remainder of this year. Importantly, our current cash runway is sufficient to fund operations through 2022. Though the enrollments of new patients have been impacted by COVID-19 for 1 or 2 trials, we are largely on track to achieve key milestones for this year. These include the initiation of the Phase III pivotal trial with AL001 in frontotemporal dementia patients with progranulin mutations. We also plan to initiate a Phase II trial in Alzheimer's disease with 002. And we'll present data, Phase Ib data, from 003 as well as Phase Ia results from AL101 later this year. And finally, we plan to submit our IND for AL014 in the next 12 months while continuing to progress our research pipeline. We thank you for your continued support and for your belief in us. We will not falter. We will continue to work relentlessly and show up for those who are depending on us to bridge the gap between despair and hope. Thank you.

Great. Thank you so much for your time today. We have reached the end of our presentation. Thank you.