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

Welcome to the Cantor Global Healthcare Conference. I'm Pete Stavropoulos, a biotech analyst with Cancer. With us, we have Alector, and I'm pleased to introduce Dr. Arnon Rosenthal, CEO. Let's start off with an introduction of yourself, followed by a snapshot of the company and just sort of touch on the milestones that are going to shape the company over the next 6 to 12 months or 12 to 18 months.

Great. Thank you for hosting me, and welcome, everyone. That's one of the more crowded fireside chat that I've been at. So Alector is a sort of neurodegeneration focused company. We've been around for a decade now. We've taken 6 drugs to the clinic. We are now developing a portfolio of antibodies, enzymes and nucleic acid therapeutics that are propelled by our blood and barrier technology. Our most advanced drug is an anti-beta antibody that we think combined like possibly best-in-class features. It's recognized the pyroglutamate epitope on the Abeta that seems to be the most potent epitope for A-beta plaques. It has a potent blood and barrier technology that uses the transferrin receptor as a Trojan horse, using a unique epitope that maximize brain penetration and at the same time, significantly reduce the anemia risk that's associated with transferrin-based brain shutters. It has a full effector function that would ensure complete removal of A-beta plaques. And because of its potency, it's targeted to be delivered monthly subcutaneous. And this drug is designated to be in the clinic by April next year. Our next set of drugs are brain-enabled siRNA Programs. We have tau siRNA that can knock down siRNA and that knock down tau mRNA in nonhuman primate by over 70%. Again, it's going to be monthly subcutaneous delivery. And we have an Alpha-Synuclein siRNA that knocked down mRNA in nonhuman primate by over 90%. Again, it's going to be subcutaneous every 3 or 6 months delivery. And we have a GCase, which is a lysosomal enzyme replacement therapy. GCase is the most prominent genetic mutation that leads to Parkinson's disease and Lewy body dementia. We are the first, I think, and as far as I know, the only one who are able to engineer a very unstable enzyme to make it 50 to 100x more stable and linking to our potent blood-brain barrier technology, enabling peripheral delivery of this lysosomal enzyme. So we have a portfolio of, again, enzymes, antibodies and nucleic acid therapeutics that are going to the clinic.

All right. Can you just give us an overview of your ABC platform? What makes it -- that may make it able to address the hurdle of the blood-brain barrier as well as target selection for transporting therapeutics across the blood-brain barrier and modalities that can leverage it?

So our platform is based on the transferrin receptor. As you know, the transferrin receptor is expressed on the blood-brain barrier. The brain requires iron for functioning. And we, as multiple other companies are using the transferrin receptor that normally transport iron from the blood to the brain as a Trojan horse to deliver drugs to the brain. We are using this shuttle, again, to deliver antibody therapeutics, primarily anti-Abeta antibodies, enzyme therapies, GCase is an example, and multiple nucleic acid therapies like we are, again, as I mentioned, developing tau siRNA, Alpha Synuclein siRNA, NLRP3 siRNA and is a major anti-inflammatory or inflammatory mediators in neurodegeneration as well as multiple other targets. So we tailored the technology for each drug modality. Although we are not the only one who are using transferring as a Trojan horse, what's unique with our technology is the tunability means for -- again, for each drug modality, we are using different shuttle structure, different affinity. And most fundamentally, we are using a unique epitope from the transferring receptor that again maximize brain penetration while minimizing the intrinsic side effects associated with transferring receptor, which is the anemia specifically the epitope that we are using on the transferring receptor significantly reduces the ability of the drugs to simultaneously bind reticulocyte and immune cells. So anemia with this technology is caused when you have a drug that on one end, bind the transferring receptor and on the other hand, has the ability to recruit immune cells to the drug. You need it because in the brain, for example, when you want to remove A-beta, you want that drug to bind the beta from one side of the antibody and then recruit immune cells to it or remove the A-beta plaques. But the same mechanism also recruit immune cells to reticulocytes and that's what causes the anemia. The specific [indiscernible] epitope that we are using largely prevent that or avoid it when the drug binds reticulocytes, its ability to, at the same time, recruit immune cells is significantly reduced. At the same time, when the drug binds Abeta plaques in the brain, it retains full ability to recruit immune cells. So we have a full functionality with regard to removal of Abeta plaques, but significantly reduced adverse effects. So what's unique in our technology is really the epitope. The epitope enables us to use a much larger range of affinities, which enables optimized brain delivery for different drug modalities. So we think we really have proprietary good technologies, again, that can deliver antibodies, enzymes and nucleic acid to the brain at very high potency and safety.

So let's get into your amyloid beta program, lead candidate is 137, which is, as you mentioned earlier, it's going to enter the clinic in April. Let's just go into the details of this molecule and why you believe it's designed to overcome shortcomings of the first, second and third-generation amyloid betas.

So the first generation of anti-Abeta antibodies, as you know, are antibodies without brain shuttles. These are lecanemab and donanemab. And both of them shows basically remove A-beta plaques over a period of 18 months. They show modest clinical benefit of slowdown in cognitive decline of like 25% to 30% over 18 months. Until very recently, they were delivered by intravenous application, which is not very convenient requiring infusion centers. And the main safety issues with this type of drugs is the ARIA. Basically, the antibodies likely bind Abeta plaques on blood vessels, recruit immune cells to the blood vessels, the immune cells, reduce inflammatory mediators cause leakage of blood vessels, and that's what caused basically brain inflammation and blood leakage that's a major side effect of the first-generation drug. So Roche developed a second-generation anti-Abeta drugs with a brain shutter. This brain shutter-enabled drugs remove Abeta Plaque at least 3x faster than the naked antibodies. It removed the Abeta Plaque more extensively. The ARIA-related side effects largely disappear likely because of the mode of entry of the antibody drug to the brain. But instead, what they now see is cases of anemia and significantly higher cases of infusion reaction. And the drug is still being delivered intravenously. And because of the infusion reaction, patients require IV steroid pretreatment. So even though the drug shows significantly increased potency, it's still being delivered IV, which is not convenient, and it is associated with anemia and infusion reaction related adverse effect, to overcome these issues, there is, in a way, a third-generation group of drugs that Denali, AbbVie, Korsana are developing, where in order to reduce the anemia risk, they crippled the ability to recruit immune cells. So they basically reduce the potency of the antibody to bring immune cells to the target. This indeed leads to better safety like there is reduced anemia, but the same mechanism that recruit immune cells to reticulocyte is also required to recruit immune cells to A-beta plaques. And as a result, you basically increase safety, but you significantly reduce efficacy. We didn't really want to pay in efficacy for safety. So that's why we really developed a unique epitope on the on the transferrin receptor that enables us to really retain a full ability to recruit immune cells with significantly reduced anemia risk. So we think we have the best of both worlds. We have maximal potency because we have a full ability to recruit immune cells, and we have a very manageable safety because our epitope on the Abeta -- on the transferrin receptor enable like significantly reduced anemia. So again, the potency of our antibodies will enable very low dose subcutaneously monthly delivery. The unique epitope, we think will reduce both the anemia-related adverse effects and the infusion reaction related adverse effect. And again, sort of the unique epitope on the Abeta we think will be significantly more potent or possibly more potent than trontinemab.

So 137 targets PyroGlu3, donanemab derisked the target. But what's your rationale for choosing that versus another A-beta species -- sorry, epitope.

It's a great question. Like if you look at the naked antibodies like if you compare donanemab to lecanemab, donanemab, which binds the pyroglutamate versus lecanemab, which binds like general and terminal aggregated Abeta. -- sort of donanemab reduced Abeta faster and incrementally showed some better clinical outcome. So it suggested that sort of the pyroglutamate, which donanemab is targeting is a better target. The pyroglutamate is only present in A-beta plaques -- and in fibrils and protofibrils, it's not present as part of like monomeric Abeta. So we think it's specifically targeting the toxic versions of A-beta, which tends to aggregate and it spares the monomeric Abeta that's not toxic and it's present also in the blood or in the serum. So targeting this epitope, I think, will lead to faster A-beta plaque removal. It's not going to be sequestered in the periphery because this epitope is not present in the periphery. So overall, I think that sort of it's a better epitope. It's a good question whether the brain shutter will really nullify this differences.

All right. Going into some of the details of the exposure levels in preclinical models, sort of what gives you confidence that you tune the affinity of a transparent binding module for optimal delivery to the brain?

Yes. So we sort of we compare the whole range of affinities and we compare to what's published in the literature and what we can be [indiscernible] from the trontinemab exposure. And from what we can tell from nonhuman primates, our technology can deliver several fold more antibodies to the brain compared to any competitor that published data in nonhuman primates. If we look at brain exposure, if we compare trontinemab to our drug, we see significantly better brain exposure sort of half the dose of trontinemab when we deliver subcutaneous versus the IV delivery of trontinemab. So basically, based on multiple nonhuman primate studies and based on multiple modeling that we have done and based on published information that we have collected -- the epitope that we are using, the affinity that we are using, the binding kinetics that we are using to the Transferrin receptor leads to several fold better brain exposure compared to other drugs that we know.

All right. So the epitope, the transferrin binding module binds to may impact safety profile like we discussed earlier. Preclinical data, what it sort of suggest about 137 in terms of safety?

Yes, we see if we compare sort of the same affinity of binding to transferrin receptors, what we call the exposed epitope that Roche and Denali and Korsana and AbbVie are using to our masked epitope, we see that at the same affinity, our epitope is significantly safer. Like in nonhuman primate, the companies that are using the exposed epitope means we see significant reduction in red blood cells, significant reduction in hemoglobin. We don't see it with our mask epitope. So we think that our epitope is significantly safer. And this enables us to go to significantly higher affinity of transfer binding, the higher affinity enables, again, several fold better brain penetration. So basically, we can gain much better brain penetration with much more manageable safety profile.

Part of the target product profile is a monthly low-dose subcu. What are the properties of the antibody that will facilitate this? And how can a low dose impact the adverse event profile versus other transparent binding platforms?

Yes. the properties of the antibodies that enables that, again, it's a very high potency brain penetration and sort of the general drug features, it's easy to concentrate it to at least 150 mg per ml, which enables subcutaneous delivery. means yes, we calculate that sort of with 2 ml injection, we can reach significantly above the calculated efficacious dose. So the potency of the antibody, the ability to enter the brain at high concentration and the ability to concentrate the drug that's pharmacokinetic feature is sort of ensuring that we can deliver it subcutaneously. And I think that a significant portion of the side effects, for example, the anemia-related adverse effect are associated with what's called the Cmax, the highest level of the drug can reach in the serum. When you inject intravenously, you reach much higher level of sort of maximum level of drug in the serum compared to subcutaneous injection. There is at least tenfold in the -- what's called Cmax or the higher level of antibodies that can be reached. So subcutaneous delivery as a result, is much safer. You don't reach higher level that elicit adverse effects. You reach a much lower like chronic dose. And so in the periphery, our drug doesn't reach high dose and it's therefore, much safer. But in the brain, the exposure is much better than IV delivered drugs. So we have a really good combinations of low exposure in -- relatively low exposure in the periphery that mitigate adverse effects and very good exposure in the brain that facilitate efficacy.

Right. So you are starting a Phase I in Australia in April. How wide of a dose range will you be evaluating? And is it going to be IV or subcu?

It's -- all our doses are going to be subcu from the very beginning, like in healthy volunteers. And then in patients, we are only delivering subcu, like based on our nonhuman primate studies and modeling, we are quite certain that we can reach efficacious dose very easily with regular subcutaneous delivery means we are planning to test at least like 4 dose cohorts, both in the healthy volunteers and then in the patients that are like threefold increments. And again, we have extensive modeling of what we consider to be the efficacious dose. So it's going to be 2 doses from each side of the efficacious doses like threefold increment.

Okay. So hematological AEs will likely be the key event that you'll be looking out for. Were these AEs observed in other Phase I [indiscernible] studies for other platforms? And what percent of subjects experienced, if so, these AEs? And what will you find sort of as an acceptable level?

So adverse hematologic events are considered if you reduce your red blood cell count or hemoglobin, I think, by more than 15% or 20%. We have not seen it in our nonhuman primate studies we see transient reduction in reticulocytes that recover very quickly and do not lead to adverse events in red blood cells or hemoglobin. In the clinic, sort of Roche with trontinemab reported somewhere between 10% and 20% anemia rate in their sort of Phase I and Phase Ia or 2. And I think that sort of they argue that it's manageable. The fact is that in the clinical trials in all the Alzheimer's clinical trials, there is significant underestimation of the anemia rate. In Alzheimer's patients, the anemia rate is about 30%. In the clinical trials, the anemia rate is about 15%. A lot of the more severe anemia patients are being excluded as part of the general sales exclusion criteria. So I think the clinical trial really underestimate the issue around anemia. And I think once Roche or other companies going to the real-world treatment, the anemia rate could go significantly higher. So it is an issue even though in the clinical trial setting, it is manageable.

Key gating factors to us actually initiating the Phase I?

Yes. The only key gating factor for us now is completing the manufacturing. We have a very good manufacturing process of very high yielding cell line. Again, we are able to concentrate the drug to high concentrations that's very amenable to subcutaneous delivery. So it's just the time that it takes to manufacture clinical drug to start the clinical study.

Then you are planning to move into a Phase Ib MAD study in Alzheimer's patients 3Q. Is that correct?