Alkermes plc (ALKS) Earnings Call Transcript & Summary

Good day, everyone, and welcome to the Mural Oncology Investor Call. Today's call is being recorded. At this time, I'd like to turn the call over to Dave Bora. Please go ahead.

Hello, and welcome to Mural Oncology's investor presentation. I'm Dave Bora, SVP of IR and Corporate Affairs from Mural, and I'm pleased to be joined by CEO, Caroline Loew VP Clinical Research Oncology, Jessicca Rege; Director of R&D, Josh Heiber and Principal Scientist, Mark Whitmore. We look forward to telling you more about Mural is protein engineering capabilities, how our lead asset in nemvaleukin differs from other IL-2 approaches, now are exciting candidates in our pipeline. We'll leave time at the end for Q&A as well. Today, we'll be making forward-looking statements about our business, including our pipeline assets. Just to note, of course, that this is an inherently risky business, and we do our best to articulate the risk that we face but for more information we'd always point you to our SEC disclosures. Here's a look at what we plan to cover today. Caroline will start with a broad overview of Mural, our pipeline, upcoming catalysts and the team we're assembling. She will also cover our proprietary protein engineering capabilities in general terms. Josh will describe the specific scientific rationale for nemvaleukin. Jess will cover the clinical results we've shown to date then Mark and Josh will discuss our IL-18 and IL-12 candidates. Finally, Caroline will finish with a brief overview of our financials before opening up the call for Q&A. Now I would like to introduce our CEO, Caroline Loew. Caroline?

Thank you, Dave. In the past 10 years, cancer treatment has made some amazing advances I was very fortunate to being part of that in my leadership role in BMS as we built the ipi/nivo portfolio of indications. Now while those steps are incredible, they still left many patients underserved and the promise of additional mechanisms and modalities even in mono combinations still haven't been realized. And this is the reason that they came to Mural. Despite the kind starting with IL-2 represents an extremely well-known area of biology and a known set of problems, which is the key here. We know that IL-2 is potent, and we know the specific drawbacks that make of IL-2. And when you have a problem like this, you can work to solve it. It's a known known. What excites me about Mural a few simple specific and unique elements. Mural has taken a deep understanding of biology, a unique protein engineering approach and is designed of cytokine of fusion protein that seeks to address the problems with native IL-2. That protein today is in late-stage clinical development in not 1 but 2 registrational studies designed and powered for approvability based on early stage data. And finally, Mural has a pipeline. Built using its protein engineering capabilities of 2 additional programs in IL-18 and in IL-12. Mural is the leading late-stage cytokine company, and that positioning will allow us to build, starting with nemvaleukin, a portfolio of products and indications that will give us the flexibility to create the next wave of much-needed regimens for cancer patients. So to review our pipeline we have 2 global registrational studies. The third in platinum-resistant ovarian cancer is reading out in the first quarter of 2025. The second is in mucosal melanoma, a rare disease with no can treatment and is also reading out in the first quarter of 2025. With [indiscernible] IV dosing regimen where we'll recommend Phase II dose selection in Q1 of next year. And so far, we're very encouraged by what we see in that study. Preclinically, we have 2 programs, both approaching candidate nominations and IL-18 and in IL-12, we both take the same protein engineering approach we have used with IL-2. We're very excited about both of these programs, and Mark and Josh will go into more detail on them later. I'm very excited by the people that I listed on this slide. We're assembling a Board with many years of relevant experience in oncology drug development. Susan Altschuller is currently the CFO at Cerevel, and was previously CFO of Immunogen. Dr. Francis Cuss with the EVP and CFO at Bristol Myers Squibb. Ben Hickey is currently the Chief Commercial Officer at Mirati and was previously the Chief Commercial Officer at Halozyme. As our Chairman, Scott Jackson, who's the CEO of Celator from 2008 to 2016 until it [indiscernible] Our management team is coming together extremely well, and I'm just delighted about the team that we've assembled. Vicki Goodman who's actually here with us today and will be available during Q&A. Will be joining the company in November. She was most recently the CMO at Exelixis and before that, held senior positions in oncology clinical development at Merck and BMS. Maiken Keson-Brookes joined our team earlier this summer and previously with the General Counsel and Chief Legal Officer of several biotechs, including Rubius, Synlogic and uniQure. We've also hired a CFO and will be announcing him before the spin and also we are getting very close to hiring CFO, and I look forward to announcing that shortly as well. Finally, a little bit about me. I'm an organic chemist by training. My experience ranges from most recently being the CEO of the platform Biotec superior in large pharma, including crystallize Squibb and Merk. And I was very fortunate during that time to be at the center of the IR revolution. So [indiscernible] IO therapies have been incredibly effective on widely adapt in cancer. But even with this impact, their limitations are significant and real. Some patients that respond and others who do respond end up progressing. Cytokines play a critical segment and role in your immune system, both innate and adaptive immunity. And in the context of oncology, they really have a lot to offer. And so Mural, what we're doing is enhancing back cytokine biology for building the treatment of oncology patients. The result of our approach is that we're developing proteins that have activity with prior therapies, such as checkpoint inhibitors failed and thus opening up the cancer market beyond today's available treatment population. So let's delve into how we do this a little more deeply. First, we built a deep understanding of the biology of interest, in this case, cytokine. Cytokines represents a natural, powerful known biology but they also have identifiable problems that we know can be aggressive with our technology. We focus on targets with strong biological rationale as a start point. IL-2 is a great example of this. It's clinically derisked, we know it's potent, it just has a specific problem solved for therapeutic window. We then use our unique protein engineering capabilities to try to address the issue with the target. This is a unique approach across the industry within screening and hit to lead within marking with same therapeutic window being a aggressive pegylation. Those factors are all valid, but they don't have the specificity of approach or the technical robustness of our approach. The results of our approach is a module that works with our activation that works with extreme [indiscernible] to deliver the efficacy benefit of target a uniquely [indiscernible] So in summary, the approach we're taking is a platform to engineer novel cytokines, and it represents our key long-term value driver. So how did this approach translates into our programs? Let's first look at IL-2. The issue with native IL-2 is binding to the high affinity of the IL-2R receptor that leads to T regs expansion. All fusion protein is sterically blocked from that binding and binds only to the intermediate IL-2R receptor upregulating CD8+ T and NK cells. For IL-18, historically, this molecule has shown limited clinical efficacy due to the IL-18 BP strongly binding to the IL-18 receptor. We've addressed that in our program with an engineered IL-18 design that has a half-life extension and these resistances strong binding of the receptor. Mark will describe our IL-18 team program later in the presentation. Finally, IL-12 use have been limited due to systemic toxicities and issues that we take to address in our program with a very elegant in situ assembly of the IL-12 subunits. And Josh Heiber will provide more detail on that approach later in the presentation. Taken together, we have a portfolio of 3 modulators. They can be either alone or in combination and there's a rational reason to combine them with, for instance, checkpoint inhibitors as we have with nemvaleukin. We view this as a robust tests of built portfolio. Now we'll discuss our lead program, Nemvaleukin in more depth. Nemvaleukin is to post the child for the approach that Mural has taken a cytokine development. We've engineered a stable active fusion protein that activates the IL-2 recepticide that drives CD8+ T and NK cell activation while sterically blocking the high affinity [ recepticide ] that causes T reg activation and the adverse events seen with the native IL-2. To date, we had some critical milestones in this programs. We've shown pharmacological proof of concept. We have clinical validation in mono man combination therapy and importantly, we've recapitulated the response of gene in native IL-2. And now we're in registrational studies, the 2 indications with the potential for broad expansion. Let's talk more about the mechanism of nemvaleukin and what makes it so unique versus other IL-2 approaches. I'm pleased to introduce Josh Heiber. Josh is a lead scientist on both IL-2 and IL-12 and can speak in depth about the science. He joined Alkermes from Corus in 2017 and has been instrumental in the development of both assets. I'm delighted to turn it over to Josh. Thank you.

Thank you, Caroline. This slide compares our IL-2 approach on the left to other high dose IL-2 approaches depicted on right. Nemvaleukin is an IL-2 receptor alpha fusion protein that is sterically prevented from interacting with the high-affinity IL-2 receptor alpha on regulatory T cells or T regs. This allows for the preferential and specific binding to affect our cells of interest, CD8+ T and NK cells at much lower doses than native IL-2. All of this, we believe, results in an enhanced therapeutic index. Importantly, unlike alternative strategies, Nemvaleukin is a stable fusion protein, intrinsically active and does not degrade to naked IL-2. On the right, we are highlighting the challenge of IL-2, which is the preferential binding to the trimeric high affinity receptor complex expressed mostly on T regs. This could actually benefit the tumor by creating a more immunosuppressant environment. As a result, high doses of native IL-2 are needed to achieve antitumor activity by dosing through the T reg window to stimulate CD8+ T and NK cells. This can be a stretch as tolerability becomes a problem at higher doses not needed with nemvaleukin alpha. This slide nicely illustrates how nemvaleukin's design hypothesis described in the previous slide, is confirmed by clinical pharmacodynamic data. Clearly, the CD8+ T and NK cells expand dramatically while the T regs remain essentially flat. This is clearly encouraging as we think about differentiation might appear in our clinical results. And now to talk more about the clinical trial progress we've made, I'm pleased to introduce Jess Rege. Jess joined Alkermes in 2020 after serving one year as clinical trial consultant for the company. Jess?

Thanks, Josh. This is the overall artistry program for the development of Nemvaleukin. ARTISTRY-1 was our foundational Phase I/II study that established our monotherapy and combination activity with pembroluzimab and set us up for our current registrational studies. In addition, we have 2 alternative dosing studies, ARTISTRY-2 and 3, exploring subcutaneous and less frequent IV dosing regimens. We're focused on the less frequent IV dosing and are expected to have a recommended Phase II doses declared by Q1 2024. ARTISTRY-6 is our registration-enabling study as a monotherapy treatment in mucosal melanoma patients in PD-1 pre-treated with or without the CTLA-4. And ARTISTRY is our combination registration-enabling global Phase III study with nemvaleukin plus pembrolizumab compared with investigator choice chemotherapy in platinum-resistant ovarian cancer. ARTISTRY-1 is our foundational study. It has 3 parts. The first part was the dose escalation, which enabled us to establish our recommended Phase II dose as well as our proof of mechanism. The second part, Part B was to establish monotherapy activity and established tumor types in which high-dose IL-2 is proven clinically active. And then the third part, Part C was to test nemvaleukin in combination with pembrolizumab in 2 major cohorts, the PD-1 approved and unapproved tumor types. Now let me walk you through some of the established clinical data. This is our ARTISTRY-1 overall safety slide. predicting the monotherapy on the left and the combination on the right. Our safety profile is consistent with what is to be expected of a cytokine with the most common adverse events being fever, chills, neutropenia and hypertension and the most coming grade 3 events for neutropenia and anemia. It's important to note that these events were transient in nature, not requiring growth factor support nor were associated with any neutropenic fever. This is consistent when we look at the overall discontinuation rates associated with the adverse events, which were in the low single-digit percentile. Looking at the table on the right, when combined with pembrolizumab, there were no additional toxicities noted. As we talk about the efficacy data, this is important as you'll see the safety profile has enabled our patients to be treated over extended periods of time. Depicted here is the ARTISTRY-1 overall summary slide of our efficacy data. We saw a variety of responses in multiple tumor types. Most notably in established diseases where cytokines are known to work with responses in renal cell carcinoma and melanoma. Recall our monotherapy responses are patients previously treated with a checkpoint inhibitor. Quite a different study population with high-dose IL-2 was approved. In addition, this was heavily pretreated study population. That most had exhausted all other treatment options before joining this trial. Therefore, this is really promising clinical activity in a wide variety of tumors. It's worth highlighting that we had 24 patients with objective responses and 2 complete responses in platinum-resistant ovarian cancer, which is quite unexpected when you think about checkpoint inhibitors alone. Lastly, we had a combination of responses with pembrolizumab in tumors where checked inhibitors are approved or not approved. As the data from ARTISTRY-1 has allowed us to move directly into our registrational study, but it has also laid the foundation of our next stages of clinical development beyond ovarian cancer and mucosal melanoma. Now let me walk you through some of the combination of monotherapy data within the ARTISTRY-1 trial. As you can see here, this is the overall combination data in the checkpoint inhibitor unapproved cohort with a focus on the ovarian cancer patient data, let me highlight a few key elements on the slide. We had multiple responses in platinum-resistant patients, most notable 2 complete responses and 2 partial responses. And this responses were very durable in nature with a median duration of 65 weeks. Our objective response rate was 28.6% and a disease control rate of over 70%. This in contrast to standard of care chemotherapy, which is lower responses and a median progression-free survival of only 3 months. Speaking of this, I want to highlight a few patients on the swimmer spot here. Focus your attention on the third swim lane. This woman had 5 prior lines of treatment for her ovarian cancer before joining our study. When she was on our study, she had very durable stable disease and was on treatment for almost 2 years. This emphasizes the importance of disease control in this population. Now let's highlight patient OC1, the top most lines of the swimmer spot. She came on our study as a 6 line ovarian cancer patient. She achieved a complete response at cycle 8 and remained on therapy in response for a total of 220 weeks. Finally, allow me to highlight one of the complete responses in the ovarian cancer, OC2 in the next slide. This patient was an 83-year-old woman when she came on our study as a third-line treatment. She had a large 100-millimeter hemipelvic mass. After about 2 months of treatment, the lesion has shrunk by over 50%, indicating a partial response, and she continued to have a deepening of that response over time. Almost a year later, the tumor had a 100% reduction in mass, as you can see, no longer visible indicating a complete response. She tolerated the treatment well for 2 years with this response. But unfortunately, she did pass away due to an unrelated event. Novus data lays the foundation for ARTISTRY-7 study, which I'll speak about in a minute. But first, let me walk you through some of the monotherapy activity. Shown here is the ARTISTRY-1 monotherapy efficacy in melanoma patients. Recall, our intentions of our monotherapy tumor choices of renal cell carcinoma and melanoma were to recapitulate the monotherapy activity consistent with high-dose IL-2. Although our patients were heavily pre-treated, in all were checkpoint inhibitor experience. So in essence, we set a higher hurdle than prior high-dose IL-2 trial. Let me highlight a few key features of the data. In the table on the right, the overall response rate for mucosal melanoma was 33% with a disease control rate of 67%. Again, a clinically meaningful result in this rare disease with no other treatment options beyond checkpoint inhibitors. On the swimmer spot, one patient noted as M1 on the slide, who has been on treatment for almost 3.5 years and continues to remain on treatment today. This data presented here supported our FDA orphan and fast track designations in mucosal melanoma. And displace the foundation for the ARTISTRY-6 study design. This is the ARTISTRY-6 study design in which the registrational component of the study is highlighted here in pink. This study is aligned with the FDA as a single-arm study in mucosal melanoma patients with prior PD-1 with or without CTLA-4 treatment. The key endpoint of the study is objective response by central review. The additional 2 cohorts allow us to expand on the future development plan with nemvaleukin, particularly with alternative dosing flexibility for our patients. Like all biologics, we wanted to explore alternative dosing options of subcutaneous and less frequent IV dosing. We're particularly focused on Cohort 3, which could allow us to expand the study to inform future registrational studies in cutaneous melanoma. Now let's walk through our combination study in platinum-resistant ovarian cancer. Again, the ovarian data from ARTISTRY-1 has led us to the design of the ARTISTRY-7 trial. This is a global registrational trial designed in consultation with the FDA to compare Arm 1, the combination arm to Arm 4, the investigators choice chemotherapy with the primary endpoint of investigator-assessed progression-free survival. This is a well-powered and novel combination study. Other key elements of the trial are 2 single arm to be able to demonstrate a contribution of effect with built-in futility boundaries is lack of activity seen in those arms. This study is well underway and is anticipated to have top line results in Q1 of 2025. Now that I've had a chance to walk you through the foundational study data, the designs of our registrational trials. Let me end with speaking a bit about our future plans of our strategy behind our dose optimization. Our development pack has been delivered and focused on delivering our 2 near-term registrational indications, mucosal melanoma in platinum-resistant ovarian cancer. Both for patient population where there's no current treatment for mucosal melanoma, a rare disease of around 2,000 patients annually and for platinum-resistant ovarian cancer around 13,000 patients annually. Importantly, these initial indications are foundation for our market evolution in 2 key directions. The first, we plan to demonstrate efficacy potential of our IL-2 to and then expand into earlier treatment lines or into other indications such as RCC. Second, as a cancer treatment combination of choice, will add nemvaleukin to the armamentarium of cancer treatment options with a strong biological rationale for how to augment existing regiments. This leads us to believe there's a very broad potential for nemvaleukin as either a monotherapy or combination therapy across a wide range of patient populations. Now let me finish by talking about our alternative dosing strategy we are building into our development plan. When nemvaleukin first enter the clinic, we wanted to control a number of variables, and we saw the frequency of dosing and something we wanted to emulate from the previous approved high-dose IL-2. So the once-a-day dosing for 5 days is modeled after high-dose IL-2. We understood alternative schedules like less frequent IV would be preferable, but also acknowledge we needed to walk before we could run. We're optimistic about the potential for our less frequent IV dosing and the progress that the teams are making on ARTISTRY-3. As we shared earlier, we're expecting to have our recommended Phase II doses, no later than Q1 of 2024. This less frequent dose schedule will build upon the foundational efficacy that we've seen with our ARTISTRY-1 program, and we implemented in our next phases of development. Now it's my pleasure to hand the mic over to Mark Whitmore. Mark Whitmore us from Genzyme over 5 years ago and has been particularly instrumental in the development of our IL-18 molecule which we're all very excited about. Mark?

Thanks, Jess. I'm really excited to talk about this program. It's worth mentioning that this program is relatively new. It was started in-house only a couple of years ago and was built with our in-house protein engineering capabilities. IL-18 has a very distinct biology from both IL-2 and IL-12. And was initially discovered as an interferon gamma inducing factor. It has many powerful antitumor traits, but one big problem historically. The big problem is IL-18 binding protein or IL-1 BP. It's a strong binder to IL-18, which blocks its full therapeutic potential. This is a real barrier to meaningful efficacy in cancer. Fortunately, we believe we have a way to engineer around that. Using our in-house engineering capabilities, we are engineering an IL-18 variant that is designed to have an extended half-life and to be resistant to IL-18 binding proteins. In pre-clinical studies debate, our resulting IL-18 variant has shown the desired effect with a relatively low toxicity profile. This slide is a good indication of what we're seeing [ pre-specifically. ] We have designed 2 versions of our molecule that differ only in potency compared to wild-type IL-18. As shown on the chart on the left, wild-type IL-18 bound prolifically to the binding protein, while no binding was detected between our 2 variants of IL-18 and the binding protein. On the right, you can see potency of our variance relative to the wild-type version in the presence and absence of a high concentration of IL-18 BP. Most importantly, we did not detect any suppression of our variance by IL-18 BP. In contrast, the wild type version has to be dosed quite highly to break the chain for the binding protein. We are enthusiastic about this program and expect to publish meaningful preclinical data in the next year. We also intend to nominate a lead candidate in the next year as well. Now I'd like to hand the mic back to Josh for a brief description of our IL-12 program. Josh?

Thanks, Mark. So IL-12 has been a challenging target in oncology drug development, mostly due to a narrow therapeutic window. IL-12 is a heterodimeric cytokine composed of p35 and p40 subunits. It is a potent stimulator of both the innate and adaptive immune systems and is extremely well-validated preclinically. Additionally, clinical activity has been observed in humans however, naked IL-12 has a narrow therapeutic index where safe doses are generally sub efficacious. There is significant interest in IL-12 and many strategies are looking to improve upon the therapeutic index. Many focus on tumor-localized approaches higher either via targeting or intratumoral injection, but these have also thus far had limited success. We have engineered a potential solution designed to be delivered systemically, but with limited systemic exposure and enhanced localized exposure of IL-12 in the tumor and tumor microenvironment. First, we split IL-12 into its p35 and p40 subunit, thereby inactivating the molecule. We then fuse these subunits to 2 noncompetitive antibody fragments targeting the same tumor-associated antigen. Now let me explain our dosing strategy that has been used in preclinical models. First, we dosed p35. We then wait for p35 to clear systemically. p35 is, however, retained in the tumor and tumor microenvironment via targeting. Only after allowing most of the p35 to clear systemically is the second subunit P40 administer. This limits the systemic formation of functional IL-12. However, levels of functional IL-12 conflicts are maintained in the tumor and tumor microenvironment via targeting to our selected tumor-associated antigens. In summary, these subunits are designed to preferentially assemble and activate in the tumor and tumor microenvironment. The figure on the right is our first demonstration that our strategy of injecting p35 and p40 subunit separately in sequence works in vivo. We conducted this study in humanized mice. As you can see, the vivo group, the first bar, has a low level of interferon gamma. Indicating that T cells have a baseline level of activation in this experimental system. Single-chain IL-12 second bar is control to verify that the system is responsive to IL-12 and additional interferon gamma is produced in response to IL-12 stimulation. The 2 right most bars demonstrated a dose response to the sequential administration of our targeted IL-12 subunits. This data is very exciting as only functional IL-12 can stimulate an interferon gamma response. This means that in the serum of these mice, sequentially administered p35 and p40 bound together and maintained function. As mentioned previously, we intend to nominate an IL-12 candidate next year. We are very excited about this program. At this point, I'll give the mic back to Caroline, who will run through our financials before wrapping up and opening up the line for Q&A. Caroline?