Alligator Bioscience AB (publ) (ATORX) Earnings Call Transcript & Summary

[Audio Gap] with your meeting.

Thank you. Welcome to this webcast on our year-end report 2019. I will start by giving an overview of significant events during the last quarter and on our pipeline strategy. So Slide 2. And as usual, the presentation includes some forward-looking statements. Let's move to Slide 3. This is a summary of the key events of the year. As of October 28, Alligator regained full rights to mitazalimab, previously ADC-1013. We've conducted a thorough technology transfer from Janssen and now have full control of the data, the IT and the clinical material. That's intensive planning undergoing to bring mitazalimab, or mita, into the next stage of clinical development, clinical Phase II. We plan to submit CTA for a Phase II combination trial during the autumn. Partner discussions are ongoing, both for the purpose of co-development and for potential out-licensing. That said, in order to build value and not to lose speed and time, we will bring mita into Phase II with or without a partner. I'd also like to give a brief update on the progress of the ongoing Phase I trial for ATOR-1015. It's progressing well. We're currently evaluating doses that are higher than the competitor product, where it's been stacked due to its toxicity. And I'll get back to this in more detail shortly. Another update in today's report is first human entry for ATOR-1017. In December, we dosed the first patient successfully, and dose escalation continues. In addition, Alligator and our co-development partner Aptevo are engaged in partnering discussions to allow start of Phase I, the clinical Phase I for our bispecific ALG.APV-527, or 527. With a massive increase in our clinical development pipeline, we have also strengthened our internal clinical development capacity. In January, we were glad to welcome Dr. Malin Carlsson as Chief Operating Officer and Head of Clinical Development at Alligator. So let's move to Slide 4. This is an overview of our pipeline. One year ago, we had one clinical Phase I program, and which was run by an external partner. Today, we have 2 proprietary clinical programs, mita and ATOR-1015, both approaching clinical Phase II. And we have ATOR-1017 in clinical Phase I and in addition, 527 ready to start clinical Phase I. In addition, there is a partner program for HER2 antibody, AC-101, in clinical development in China Through our partners AbClon and Henlius. These clinical development programs should give a continuous clinical efficacy news flow from 2021 and onwards. Let's move to Slide 5. So what about mita? This product strengthens one of the key components of the immune system, so-called antigen presentation. That's a nonredundant process that allows the immune system to identify what to attack, that is the tumors. Mita is likely to be synergistic with any cancer therapy of a damaged tumor cells, and by that causes release of tumor antigens or tumor components. In addition, mita has been demonstrated to make tumors, tumors that previously do not respond to this class of therapy sensitive to PD-1. This is another opportunity that we would like to explore in clinical Phase I -- Phase II, sorry. And we do have the product. In fact, we have pharma quality clinical material sufficient to run multiple clinical Phase II trials. And with successful Phase II trials, first launch could be as early as 2026. So let's have a closer look at those plans in Slide 6. We believe the quickest route to market will be in pancreatic cancer, where there's potential for becoming first line of therapy. The Phase II study in this indication would typically involve less than 50 patients and could read out already within 2 years. Pancreatic cancer is obviously a challenging indication. But given the impressive data presented last year by a similar CD40 antibody in pancreatic cancer, we feel very optimistic about the potential to demonstrate clinical benefit of mita in this indication. And in addition, we are planning for smaller clinical studies with combination modalities that should be highly synergistic with CD40, such as neoantigen vaccines or adoptive cell transfer [ or similar ]. ATOR-1015, that's a first-in-class tumor localizing CTLA-4 antibody. That's Slide 7. Why develop a CTLA-4 antibody that accumulates in the tumors? If we start by looking at the clinical presence, the current CTLA-4 therapy is effective, but severely affected by serious immune-related toxicity. The toxicity is related to the fact that widespread CTLA-4-induced overactivation of the immune system makes it attack normal tissues in the body. This put limitations on both dose levels and number of doses for Yervoy, which is a competitor product. In melanoma, it's Yervoy, that is. It's restricted to 3 mg/kg for up to 4 doses. And in lung cancer, it's administered at 1 mg/kg with a 6-week interval, and this is to reduce toxicity. Still, there is clear benefit of Yervoy, especially in melanoma. We believe that most of the toxicity is related to systemic, that is general activation of the immune system, while the positive effects of Yervoy are related to activation of immune cells in the tumor area. ATOR-1015 is developed to achieve the latter, that is local activation of the immune system in the tumor area by physically localizing the tumors. And we see a great opportunity to improve efficacy by improving tolerability to a level where long-term dosing at therapeutic dose levels is possible. Let's take a look at the progress of our ongoing clinical Phase I trial. Slide 8. The first patient was dosed in March 2019, and the status progressed rapidly since. Nine dose levels have been clear to date, and we are now starting evaluation of the 400-milligram dose, and this is about 6-milligram per kilo. This is a potentially therapeutic dose level and can, of course, be compared to the 1 or 3 mg/kg doses of the approved CTLA-4 antibody Yervoy. So we are today dosing at significantly higher levels than our competitor. And thus far, 1015 seems to be well tolerated. But we should, of course, be cautious. CTLA-4-induced toxicity usually takes 1 to 2 months to develop. So we need to evaluate more patients and for longer time before we can assess the safety and tolerability profile for it. Slide 9. This is an overview of our clinical development plan for 1015. We will continue dose escalation and evaluation of 1015 during the year and plan to report the full safety data set in the autumn, probably in Q4. We also plan to file a Phase II CTA before end of the year, which will be a Phase II combination trial with PD-1 in malignant melanoma. In addition to this, we plan to initiate a Phase Ib study of ATOR-1015 in monotherapy in PD-1 refractory melanoma. And that study can, in fact, be run as an expansion of the ongoing Phase I trial, meaning that it can be initiated even earlier, probably in Q3. This gives an opportunity for an early Phase Ib efficacy readout of the monotherapy mid-2021 with a potential Phase II efficacy readout of the PD-1 combo study in mid-2020. So Slide 10, ATOR-1017. That's our monospecific 4-1BB antibody that started dosing in the first human trial 2 months ago. It's a standard Phase I dose escalation trial in up to 50 patients with advanced cancer. It's being conducted at 3 clinical sites in Sweden, and we expect to continue with dose escalation throughout the year. With that, we can take a closer look at our financials. That's Slide 11. A key figure is our cash position. That is, we have about SEK 250 million in the bank at the end of the year. With the current strategy, this will take us into the second half of Q1 2021, that is a bit more than 12 months ahead. Slide 12. The cost level has increased during the last 2 years, mainly attributed to the advancement of ATOR-1015 and ATOR-1017 to the clinic and also the expansion of internal clinical organization. Going forward, cost is expected to stabilize on the current level. Slide 13, this is the last slide. A brief summary of upcoming key events during the year with the important readout of our clinical Phase I study for ATOR-1015 and with both mita and ATOR-1015 entering clinical Phase II as the most significant events. So with that, I would like to open up for any questions. Thank you.

[Operator Instructions] Our first question comes from the line of Joseph Hedden from Rx Securities.

Just a quick one on the Phase Ib expansion in melanoma. Could you possibly give any more details on how many patients you plan to enroll there? And perhaps talk a little bit about what the kind of comparative therapies in a PD-1-resistant population? And then just on the dose level reached now in the Phase I of ATOR-1015. Could you confirm, have you -- has any patients actually started on this level yet? Or is that the level you've reached and it's imminent that this is going to happen? And if that's the case, what was the last dose level tested?

Yes. So you may have to repeat some of those questions. But I can give a brief account on -- if we start with the Phase Ib expansion. So what we are planning to do is to add on arm of that study, which will be a separate sort of Phase Ib trial in malignant melanoma. And the whole point is to demonstrate efficacy in a population that's more likely to respond. So it will be patients that have failed on PD-1. That is the patients that can be included in such a trial. And the number of patients [ we test ] -- can include after 30 patients, but it would be somewhere, I guess, in the range of 20 to 30 patients in that [indiscernible]. Then -- so the whole point of doing this is, of course, to add additional opportunity to demonstrate efficacy out -- on top of the PD-1 combination. And the advantage is that we do not have to wait for a recommended Phase II dose, but we can expand the current clinical trial since we are already at dose levels that are significant and expected to be at therapeutic levels. We think we can initiate this in, say, within 6 months. And then I believe you also asked on the PD-1 combination studies. Could you repeat that question?

No, sorry, it wasn't on the PD-1 combination. It was on the dose level that you've reached now in the trial. Have any patients received that yet? Or is that imminently to happen?

Yes. So we don't really comment on the ongoing -- outside the report. But so the previous dose level at 200 mg/kg -- sorry, 200-milligram has been cleared. And we are starting recruitment for the 400 mg and then we will not communicate during this. But it's now a 3 plus 3 design, and we expect to continue dose escalation and may even continue beyond this dose level. So it all depends on the data coming out.

And the next question comes from the line of Erik Hultgård from Carnegie.