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

It's a Day 2 of the Bank of America Healthcare Conference. I'm Greg Harrison, one of the SMid biotech analysts here. At this time, we have Alector to present. And on behalf of Alector is Marc Grasso, CFO. Take it away, Marc.

Thanks, Greg. We appreciate the opportunity to present Alector to you today. Before we begin, just to make a note that I will be making some forward-looking statements, and I'd encourage you to review our SEC filings and our statement here for more information. So at Alector, we're passionate about making brain disorders history. This is not just a bold vision, but it's also based on transformative science that Alector has been pioneering over the past decade. And I'm going to talk today about a number of our late-stage clinical programs that have significant data readouts in the coming years. And we're doing this with an experienced team, world-class pharmaceutical partners and a significant base of financial resources. Importantly, it's also a very exciting time for Alector as we're advancing these programs through key derisking events. This includes events that are occurring this year. We are intending to engage with the regulatory authorities mid this year around our pivotal late-stage latozinemab program in frontotemporal dementia patients with a GRN mutation. We're also going to present additional Phase II data for this program later this year in the setting of frontotemporal dementia patients with a C9 mutation. And we intend to complete enrollment in the third quarter of this year for our AL002 program addressing Alzheimer's disease and activating TREM2. This data -- the data from this program is going to read out in Q4 of '24. And we intend to have data from our latozinemab pivotal Phase III by early 2025, and we're now anticipating, pending regulatory feedback, that we can have a BLA filing by the end of 2025. So now just a word on the unmet need. So on the right-hand side of the slide, we see some of the larger indications, and many of us are touched very directly by some of these. In Alzheimer's disease in particular, we're excited about the recent progress in the field with the anti-A-beta-targeted therapies. Alector's approach seeks to actually build and expand upon this exciting progress. And on the left-hand side of the slide, you can see for latozinemab in the setting of frontotemporal dementia, it's a less well-understood form of dementia but a very significant unmet need when that has a dire prognosis and no approved therapies. As you know, this is the indication perhaps that you know that Bruce Willis was recently diagnosed with. And it's a very rapidly progressing and devastating disease. Underlying everything that we do is a strong genetic underpinning. And this ranges, as shown on the bottom of the slide, from causal genetic mutations to clear genetic risk factors. And this is the basis for our approach, which is harnessing the brain's immune system to deliver a therapeutic benefit. And this is, in many ways, a parallel to the significant transformation of the treatment of cancer in the context of immuno-oncology. So what this found is that many of these genetic changes, genetic mutations and genetic risk cluster in the genes that are regulating the immune cell in the brain, which is called the microglia. And what happens as we pass through reproductive age is that the evolutionary selection pressure for this cell type tends to subside. So you have what were previously healthy functioning microglia that in the case of neurodegenerative disease become less effective and less beneficial. And since the brain is a very significant metabolic organ and it's constantly creating unwanted proteins that are accumulating, it's critical that you have healthy functioning microglia to help clear these proteins and maintain proper brain health and function. And again, we've seen encouraging results in the context of the anti-A-beta therapies. But that's just one type of misfolded protein, and we see multiple different types of these in different brain disorders. And our approach is seeking to address all of these. In addition, there's other activity that the microglia play. Besides just removing unwanted or misfolded proteins, they're critical to maintaining proper neuronal health, proper interaction between the other cell types of the brain, astrocytes, oligodendrocytes, and importantly also maintaining the vasculature in the brain. So we see an opportunity to have a broader effect in a therapeutic context in multiple different neurodegenerative disorders. So here's our pipeline, and I'm going to talk today in a high level about our late-stage progranulin-elevating programs, which are shown on the top. This includes latozinemab, which I mentioned is in development in the context of frontotemporal dementia, in particular for patients with a GRN mutation and also patients with C9 mutations as well as our AL002 program, which is being developed in the context of Alzheimer's disease and activates TREM2. In addition, we have a strong pipeline of novel first-in-class programs that are approaching the clinic, and I'll touch on some of that today. And importantly, whether it's for the progranulin-elevating programs or the TREM2 program, these are the most advanced of their kind in clinical development. And we're not doing this alone. We have world-class pharmaceutical partners. For the progranulin-elevating programs, we have a partnership with GSK. This is a worldwide partnership that had a $700 million upfront payment associated with it, has $1.5 billion in potential milestones and has a U.S. 50-50 profit share and tiered double-digit royalties outside the U.S. Our TREM2-activating program is partnered with AbbVie. And this had a $220 million upfront payment associated with it. A $17.8 million milestone was recently received, and we have substantial additional potential milestones, including a $250 million payment from AbbVie if they choose to opt in on the back of the Phase II data that we should be having in the near term. This partnership is a global 50-50 profit share if they choose to opt in. And then even outside of these partnerships, the company currently has $669 million in cash, and this is runway through 2025, which is a full year beyond the key clinical readouts I mentioned earlier. So I'd like to just talk a little bit now about our latozinemab program and progranulin elevation. So progranulin is a key immune regulator. And there's a clear association between the genetics underlying progranulin expression and neurodegenerative disease. In the context of frontotemporal dementia with the GRN mutation, if you have a homozygous mutation, you die at a young age and it's very devastating. If you have one good copy and one bad copy, you produce approximately 50% of the levels of progranulin the body normally has and the brain normally has. And what we're doing is blocking a key degradation receptor, and that allows the progranulin levels to go back to a normal level. And this degradation pathway is called sortilin. Our antibody binds to this. So in many ways, it's analogous to enzyme replacement therapy. We're returning the levels of progranulin back to normal. So we've completed Phase I and shown that it's safe and tolerable. We've largely completed a Phase II in symptomatic frontotemporal dementia patients with a GRN mutation as well as symptomatic patients with C9 mutations and asymptomatic patients. And we've shown encouraging activity in the context of biomarker activity, in terms of lysosomal activity, reduction in brain inflammation, improvements in markers of neurodegeneration. We've also shown benefit from the standpoint of volumetric MRI imaging. And importantly, also, we've shown a benefit as it relates to clinical outcome assessment. So here is some of the top line data from the Phase II. And this is in the context of frontotemporal dementia patients with a GRN mutation. And you can see an approximately 50% slowing of disease progression over a 12-month treatment period for -- as compared to age-matched historical controls. This is supported also in the context of the FTP patients with a C9 mutation where again, for a 12-month treatment period, you see an approximately 50% slowing of disease progression. And in the C9 context, this is very relevant because these are patients that have a normal level of progranulin at baseline. And what we're showing here is a potential protective benefit for elevating above baseline. And this speaks to a broader opportunity that we see not just in the frontotemporal dementia context but in other neurodegenerative diseases as well, including Alzheimer's, ALS and Parkinson's. So we've now embarked on a Phase III study that's been underway for a number of years. This is a randomized prospective placebo-controlled study in frontotemporal dementia patients with a GRN mutation. As mentioned, we're planning to meet with the regulatory agencies here mid this year around our statistical analysis plans for this study. And pending that regulatory feedback, we anticipate that we'll have pivotal data from this program by early 2025. We're measuring clinical outcomes assessment, similar to as we measured in the Phase II. And we're measuring additional biomarker activity in imaging. Again, this is the most advanced program of its kind for progranulin elevation. So in addition, we have another molecule, AL101, that also elevates progranulin with a longer half-life than latozinemab. And this is being developed in the context of Alzheimer's disease. And we're advancing this into a Phase I together with GSK here in the short term. And again, the genetics underpin what we're doing here. So it's clear that progranulin is a risk factor. Mutations and genetic changes in progranulin can be a risk factor for Alzheimer's. And in disease model studies in mice and other settings in preclinical, it's clear that by overexpressing progranulin, you can have a benefit in these models. So in the time remaining, I'm just going to briefly touch on our TREM2 program. This is very exciting. TREM2 is a prominent risk gene for Alzheimer's disease. And TREM2 is an important signaling molecule on the microglia. You can think of it as a damage receptor on the cell surface of the microglia. And when there's misfolded proteins or other evidence of damage in the brain, typically, this signaling cascade would be started. And what we're doing with TREM2 is helping boost this in the context of a setting in the neurodegenerative context where the signaling cascade isn't working as well as it should. So by binding to this TREM2 molecule on the cell surface, it elicits broader activity in microglia. And again, this is not just removing misfolded proteins but also, importantly, all the other activity of the microglia that are healthy and beneficial in the context of the brain. So we've completed Phase I. We've shown clear dose-dependent target engagement, and we've shown clear evidence of microglial activation. And we're now in the midst of a multi-arm Phase II that's going to enroll approximately 300 patients and has 3 dose arms. And we're measuring clinical outcomes assessments as well as important biomarker endpoints, imaging and PET scans as well. This is a randomized, placebo-controlled prospective study. And again, it's the most advanced of its kind in the context of TREM2. So in the final minute remaining, I just want to touch on our discovery platform. So again, this is based on extensive genetic data and the genome-wide association studies that are being done worldwide. We take this information and feed it into our iterative machine-based learning engine and apply our proprietary biologics to bring forward novel drug targets that we can then advance to be clinical candidates. We're also doing this in the context of proprietary blood brain barrier technology, which Alector has been progressing. And while we have strong brain penetrants and activity with our late-stage clinical programs, we do see blood brain barrier technology as additive and potentially beneficial in certain contexts for enhanced brain penetrants. And we're continuing to advance this alongside our novel first-in-class programs. So with that, I hope I've given you a helpful introduction to Alector, the significant opportunity that we have with our late-stage programs and the important data readouts that we have in the coming years and the strong base of financial resources and partnerships we have to progress it. Thank you.