Alterity Therapeutics Limited (ATH) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the Annual General Meeting of Alterity Therapeutics. [ indiscernible ] online just got some more people arriving into the meeting. I'd also like to welcome shareholders and guests joining us via webcast. My name is Geoffrey Kempler, and I'm the Chairman of the company. Can I please ask everyone to place their electronic devices on silent. I'm advised that the notice of meeting has been properly dispatched and that a quorum of members is present. Accordingly, I declare the meeting formally open, and thank you all for your attendance today. And I'm pleased to introduce my fellow directors, Mr. Lawrence Gozlan, Non-Executive Director; and Mr. Peter Marks, a Non-Executive Director and Chair of the Remuneration Committee, is joining us by Zoom; Mr. Brian Meltzer, a Non-Executive Director and Chair of the Audit Committee, has provided his apologies for this meeting. Also present is Mr. John Roberts, our audit partner at PricewaterhouseCoopers and the teams and the company's share registry, Computershare, who will be assisted -- will assist in polling votes. Thank you. and our Company Secretary, [ Phillip Hanes ]. The order of events for today's meeting will be as follows. I'll first say a few words about the past year of Alterity. We will then proceed with the formal business and the resolutions of the meeting to consider any questions on the resolutions. And then we'll hear from our Chief Executive Officer, Dr. David Stamler via Zoom from San Francisco. So we're all very much looking forward to his comments. I'm pleased to share with you my Chairman's address for our financial year '23 Annual General Meeting for Alterity Therapeutics. We're hosting this meeting both in person in Melbourne and virtually, to ensure all of our shareholders, employees and corporate partners are able to join us. We've had a strong year at Alterity with progress at many fronts as we move closer to our goal of improving outcomes for people with Parkinsonian disorders, including multiple system atrophy or MSA. Let me discuss -- let me start by discussing our clinical progress. Most importantly, we successfully completed enrollment in our ATH434-201 Phase II clinical trial, a double-blind placebo-controlled study participants with early-stage MSA. This is a significant milestone for Alterity as we moved 1 step closer to bringing a new oral therapy to people with this devastating condition. Because MSA is a rare disease with no approved treatments, targeting the underlying pathology of the disease, the interest in our trial was extremely high, and we confidently exceeded our enrollment target. Study treatment will conclude in the fourth quarter of 2024 and the results from that trial -- from the trial will clarify the path forward for potential approval of ATH434. The trial is being conducted at over 20 sites in the U.S., Australia, New Zealand and Europe. Physicians across the board have received the trial enthusiastically, as they implement Alterity's novel methods to diagnose, evaluate and treat early MSA. In July, we passed a critical catalyst in the trial when we received feedback from an important data monitoring committee, who reviewed clinical data from an initial cohort of [ indiscernible ] participants. The committee expressed no safety comments and recommended that our trial continue without modification. During the year, we also commenced a new and separate Phase II clinical trial known as ATH434-201. This open-label biomarker study will allow us to assess the efficacy of ATH434 in participants with greater MSA severity given the double-blind study and will give us valuable information the next phase of development. Because the trial has the same key biomarker endpoints used to assess efficacy in the double-blind study, it may give us an early indication of efficacy. Clearly, clinical measures important to MSA will also be assessed. And finally, our bioMUSE natural history study is helping to improve patient section and identify appropriate biomarkers that will inform clinicals in MSA, including our own ATH434-201 study. The study continues to generate valuable information by assessing a diverse set of biomarkers to augment clinical criteria or MSA that will greatly improve the diagnosis of this devastating disease. Data presented also demonstrated that wearable sensors can quantify impairments in MSA patients that is not captured by neurological examination, an important component to those living with the disease. We also continue to generate promising data on our lead asset, ATH434. Earlier this month, we presented new data indicating that ATH434 can preserve mitochondrial function after oxidative injury and exert direct anti-oxidants activity independent of its iron-binding properties. While we have long known that ATH434 is able to reduce [ indiscernible ] iron, the demonstrated mitochondrial protection may reveal additional mechanisms that augment its ability to slow disease progression. Our research team also continues to produce novel patentable compounds covering several neurodegenerative diseases. In August 2023, we secured a new composition of matter patent in Europe, providing broad protection over a new class of buying chaperone drug candidates for treating major neurogenerative diseases, including Alzheimer's and Parkinson's disease. In March 2023, we licensed the use of a separate patent family of more than 100 compounds along with our product candidate PBT2, Professor Colin Masters to advance the compounds for the treatment of Alzheimer's and related diseases. Professor Master's research on the beer amyloid protein that forms the cerebral plaques in Alzheimer's disease has laid the foundation for extensive research on the disease and recently approved treatments. Our collaboration with Professor Masters broadens the opportunities for our clinical development efforts, and I'd like to thank Professor Masters for being here today. I'd like to thank our CEO, Dr. David Stamler and his executive team as well as our scientific and operational staff for their work and dedication to advancement of our development programs to our shareholders, thank you for your support, as we gear up for another exciting and productive year for Alterity. We look forward to updating you on our progress for fiscal year 2024. Thank you. That brings me to the end of my comments. We'll now -- we'll now move back to the formal business. I noticed that the notice of meeting has been appropriately dispatched to all shareholders and other persons entitled to receive it within the notice period. The matters requiring consideration today are outlined in detail in the notice of meeting. the notice will be taken as read. Alterity Therapeutics, financial statements for the 2023 financial year and the auditor's report are in our annual report, which is available on our website. Resolution 1 is a nonbinding resolution that requires at least 5% of votes cast by shareholders to be in favor of the resolution to pass. Resolutions 2 to 4 are ordinary resolutions that require more than 50% of votes cast by shareholders to be in favor for the resolution to pass. Resolution 5 is a special resolution that requires more than 75% of votes cast by shareholders to be in favor of the resolution to pass. Today's voting will be conducted by way of a poll on all business items. If you have not already voted, or wish to change your vote, please submit your proxy card to the Computershare representatives at the end of the formal meeting. Proxy votes submitted prior to the meeting will be set out on the slides shown for each resolution. For context, Alterity currently has approximately 2.4 billion shares on issue. Proxy card votes cast during the meeting will be counted after the end of the meeting, and the results will be published on the ASX and on Alterity's website. Shareholders have appointed the Chair of today's meeting, myself, as proxy voting either for, against or with discretion for all resolutions. And as indicated in the proxy form in the notice of meeting, my intention as Chair all discretionary or undirected proxies I hold in favor of each resolute. The first item is to receive and consider the company's annual financial report for the financial year ended the 30th of June 2023, together with the declaration of the directors, the director's report, the remuneration report and the auditor's report. The company's auditor from PwC is available to answer any questions concerning the conduct of the audit, the audit report, the company's accounting policies or the auditor's independence. Are there any questions in relation to the financial year 2023 annual report or of the auditor or management.

There are no questions at this time.

As there are no further questions, I [ hereby table counts ], and we shall move on to the resolutions. The first resolution is to adopt the remuneration report, and I'll take the resolution as read. The proxy results are available on screen and will be determined by a poll at the conclusion of the meeting. Are there any questions related to Resolution 1?

No questions.

Resolution 2 is the reelection of Director, Mr. Peter Marks. The proxy results are available on the screen and will be determined by poll. Are there any questions with regard to this resolution?

No.

Sorry. I couldn't be there. I just got a cold and sort of flue, [didn't want to] -- and everybody be offline [ indiscernible ].

Thanks, Peter. Next resolution is the reelection of Lawrence Gozlan as a director. The proxy results are available on the screen. Are there any questions with regard to this resolution?

No questions.

No questions. Thank you very much. Next resolution is the ratification of prior issue of shares. The resolution appears on your screen. I'll take it as read. The proxy results are available on the screen. Are there any questions with regard to this resolution?

No questions at this time.

Thank you very much. And the last resolution is the [ indiscernible ] of the 10% placement issue. The Resolution 6 approval to the additional 10% placement capacity available under the ASX listing rule as set out in the notice of meeting. I'll take it as read. The proxy results are on the screen. Are there any questions in relation to this resolution?

No questions in relation to the resolution.

Thank you very much. So we now have an opportunity prior to hearing from our COE, to see if there are any general questions that are not related to the resolutions that our shareholders have asked. Moderator, do we have any?

None [indiscernible].

We have that. Okay. So as there are no questions, there any questions in the room. As there are no questions, I'd like to thank shareholders for your participation today and your ongoing support for Alterity Therapeutics, and include -- this concludes the formal business of the meeting. Please, submit your proxy forms to the Computershare representatives now. The final results of the polls will be released on the ASX as soon as they are available. And I now declare the meeting closed. I'll now hand over to Dr. David Stamler to make the presentation to provide an update on the company's research and development activities. Thank you, David.

Well, thank you, Geoffrey, and it's nice to speak with you again about the great progress we've made over the last year. As with Peter, I'm very sorry, I can't be there in person but I'm definitely there in spirit. And I'm excited to tell you about the great things that have happened over the course of the last 12 months. As I bring on my presentation, I'm going to wait and just make sure it's loading properly. And I will now move it to -- these are forward-looking statements. I encourage you to review any and think about our risks in our 20-F filed with the SEC or the Australian equivalent. Okay. So as many of you have heard before, Alterity is an English word that means the state of being different, and it really captures what our mission is, which is to change state for people living with these terrible neurodegenerative diseases. And our goal is really to modify the course of the disease through our development of disease-modifying therapies. Our lead product of ATH434, which I will refer to just as 434. And this is our novel drug candidate for targeting proteins that are implicated in neurodegenerative diseases such as Parkinson's disease and related disorders. One of those related disorders is referred to as multiple system atrophy MSA, which is a Parkinsonian disorder that is a rare disease and there's no approved therapy for it. It is an orphan of disease and has the designation for orphan status from both the U.S. FDA and the European Commission. We've made excellent progress over the last 12 months with our Phase II program, and we have 2 ongoing Phase II trials. One is the randomized, double-blind, placebo-controlled study that Geoff referred to and is addressed and the other is a biomarker trial in more advanced patients, and I'll be updating you on these trials in greater detail. We also have made continued progress in our patent portfolio with filing and approval of new patents. And as we as we have progressed after our development of this compound, I've been very happy to have participation from our Head of Nonclinical Development and our Head of Clinical Development, who, with me, have achieved success in bringing 3 neurology-related drug approvals through the FDA. Now I'll be talking about Parkinsonian disorders, which represent a very significant unmet need in many diseases. So Parkinsonism is a syndrome of motor symptoms that we've all seen in friends and family members. And this includes the slow movement, stiffness or tremor. And it gets its name from Parkinson's disease. That's why it's called Parkinsonism because Parkinson's disease is the most common cause. And it is a major source of disability, especially as the disease progresses. Now in addition to Parkinson's disease, there are other disorders that have the same motor manifestation, and that's why they're called Parkinsonian disorders. One such disease is our lead indication, multiple systematrophie MSA, they have prominent motor symptoms, but they also have prominent nonmotor symptoms. I'll tell you more about -- and importantly, they have a limited response to available therapies. These therapies that are available do not address the underlying pathology of disease, and that's really what we're hoping to do with our treatment. This is a snapshot of our portfolio. The first 2 trials here are the trials I've told you about, the double-blind trial in early-stage disease 201 and then the 202 study, which is the trial in more advanced patients. We've also continued to reap great rewards from our bioMUSE natural history study that we've been conducting since 2020. And we will be presenting soon some data on the evaluation of 434 in animal models of Parkinson's disease in a primate model since disease. And this is an investigation that was done in collaboration with Michael J. Fox Foundation here in the United States. Lastly, we have continued to make excellent progress with our drug discovery efforts to date as mentioned within our patent filings. So talking about a little bit of the biology of the diseases that we're treating. Our biologic target is this protein called alpha-synuclein, which may be a mouthful for some of you. But it's a very important protein that's present in all neurons. And it really helps these neurons communicate with 1 another. And to do so, it exists in this unfolded state that you see pictured in this cartoon on the slide. However, in diseases like Parkinson's disease or MSA, the protein aggregates. Therefore, it can't do its function, nerves don't communicate well with 1 another and you get neurologic symptoms associated with that impaired communication between the nerve cells. So our strategy is to really prevent that misfolding and aggregation of the protein that you see pictured in the bottom part of the slide. And we addressed this by targeting the excess iron that is increased in areas of pathology in the brains of these patients. Now this is a study in autopsy study looking at the brains of patients with both Parkinson's disease and MSA. And what you see is a comparison of affected areas in the brain of patients in blue, versus controls of the same age in green. And you can see in Parkinson's disease, there's elevated iron in the areas of pathology. And in MSA, we see similar increase. But as the name implies, we have multiple systems or multiple brain regions that are really affected. And it's this excess iron that we're really targeting with our therapy. Now if you fast forward about 25 years, there have been great advances made in MRI techniques so that we can actually look at this iron in the brain of a living patient. And what you see at the tip of the orange arrow, the excess iron that we're measuring in the autopsy study that I told you about a minute ago. That dark red [ indiscernible ] material actually is the increased iron. And this is important for 2 reasons. Number one, this helps us identify patients that we want to come into our clinical trial. So it improves our selection of patients. It also represents our key endpoint in our patient studies, really the change in the iron in these brain regions. Iron itself is critical in disease pathogenesis and both iron in that protein. I told you about alpha-synuclein are strong contributors to the pathology. The iron itself promotes that misfolding and aggregation or clumping of the opposite nuclein protein -- and it's also the root cause of oxidative stress. And if you take this diagram on the right side of the slide, you get a sense for what's actually going on -- so in the center of the circle, you see the misfolding and aggregating protein on the opposite of new protein. This iron imbalance you see on the right side, really contributes to generation of these free radicals that you see pictured. And that oxidated stress actually injures intracellular components like DNA or lipids. And that leads to the host trying to clear that abnormal response and inflammation. So what we're really trying to do is to break this vicious cycle. And in essence, we're by targeting the excess iron in the central nervous system. We're aiming to reduce that protein clumping or aggregation, reduce the oxidated stress ultimately with the aim of rescuing neuronal function. And the aim is by rescuing these neurons, we want to modify the course of disease, slow the progression and help patients live a more functional and productive life. So let's turn a little bit to talk about 434, which is our disease-modifying drug candidate. This is a small molecule drug, which is important, meaning it's a tablet that people can take at home. They don't require an infusion or any injection into their body. So it's an oral drug. And it acts as an iron chaperone, which means that it binds the iron in places where it's in excess and it helps move that iron outside of those cells so that it can be put to good use. And the drug we know is readily absorbed and reaches the site of action in multiple animal studies as well as in man. And I don't have time to review all the animal studies, but we've shown in animal models of Parkinson's disease animal models of our lead indication MSA, multiple different types of studies that we've seen very nice efficacy. I've mentioned that we have potential to treat various Parkinsonian disorders associated with increased iron. And as mentioned, we do have orphan drug designation in the U.S. and the European Union. And we've had numerous discussions over the years with the FDA as well as with various regulatory authorities in Europe. So turning to multiple system atrophy. I want to tell you a little bit about the disease if you're unfamiliar with it. It is a rare disease. It's highly debilitating and unfortunately, it's rapidly progressive. The clinical impairments are summarized here as well as in the diagram on the right. So we've talked a little bit about the Parkinson's and that's the slowed movement the patients get. Patients also have unimpaired balance and uncoordinated movements that contributes to increased falls, which can cause serious injury in patients. As mentioned before, patients also have impaired autonomic function, which really means the autonomic nervous system controls things that we don't think about, our blood pressure, our respiratory rate and the like. So these patients actually have reduced ability to maintain their blood pressure. They have impaired bladder function, sometimes leading to urinary incontinence requirement to catheterize. They have impaired ball function, which can lead to protracted constipation. So these are nonspecific symptoms that really impair patient's qualities of life. Now what you see on the right is kind of how patients manifest. Initially with these nonspecific symptoms, then they tend to come to the attention of a neurologist when they have Parkinson's or the uncoordinated movements, governed by the cerebellum. And then they ultimately progress to requiring a wheelchair in more than half of patients. And unfortunately, patients have a median survival of 7.5 years. So we really hope to slow this progression and really preserve function. And these are the patients we're really aiming for the patients who have the motor symptoms but don't yet require these walking aids. Now 1 other thing I'll show in a subsequent slide is that the excess brain iron that we see in these patients, both we've shown this and others have shown it, does correlate with disease severity. So it really supports our approach towards targeting the excess iron in these brains -- in these patient's brains. Now we've successfully completed Phase I a couple of years ago, where we achieved drug concentrations associated with efficacy in multiple animal models that I've told you about. We've also had a very nice safety profile. There have been no serious adverse events in this Phase I study or adverse events leading to withdrawal. They were all mild to moderate in severity. And there are no findings in the ancillary tests like laboratory procedures or on clinical labs or ECGs. So now I'd like to tell you about the natural history study, which I think is an aspect of our development program that distinguishes us from most other companies that are working in this area. As mentioned, we started the study a couple of years ago with the aim of aiding in the design and the derisking of the Phase II trial that is now ongoing. And the goal is to really identify biomarkers to use in this treatment study as well as to fine-tune our protocol to a were getting just the right patients. So we targeted the same patients we're targeting for Phase II. We observed them for 12 months. We looked at multiple biomarkers, imaging biomarker biomarkers, the wearable sensors that Geoffrey mentioned in his presentation and then all the clinical endpoints that assess the impairments in these individuals. And that's with the aim of understanding what we could expect in the clinical trial. So these are kind of the summaries of kind of what we wanted to do. We wanted to optimize patient selection in subsequent trials, learn how to assess these endpoints and improve the precision with assessing those end points and then pilot clinical measures to make sure that we could detect abnormalities in a patient population that we're targeting so that if we have something abnormal, we can actually improve it. So regarding optimized patient selection, these are the advanced MRI methods that I showed you before, but these are now in early-stage patients. And we showed that we could identify an iron signature in the early-stage patients to use as our end point. We also showed that we could distinguish between MSA patients and Parkinson's patients in the natural history trial, which really allowed us to optimize the patient selection in the Phase II study. Now our collaborators at Vanderbilt University that have great expertise in this area have been helping us develop a new MRI template to implement for measuring the iron in specific brain regions with great precision. And we've been looking at various methods or quantifying the iron in these affected areas. And I'll show you another slide on this with a little more detail in a moment. And then as mentioned, these are the clinical measures that affect some of the symptoms of greatest importance to the patients that we piloted in the natural history study. The wearable sensors that look at -- this is just the amount of walking time over the course of the day in an individual patient. And you can see that there's a very clear change. And then also, we're able to look at urinary symptoms. So we took these measures that we piloted in the natural history study and felt confident about implementing them in the Phase II study. Okay. So let's talk a little bit about that Phase II study. It looks very similar to the natural history study except now this is a treatment study. It's a randomized, double-blind, placebo-controlled study, really the gold standard for demonstrating efficacy and characterizing safety in these patients. Again, we're looking at early-stage patients, those that are ambulatory, don't require walking aids and that do have biomarker evidence of MSA. We targeted 60 patients. But as Geoffrey mentioned, due to the great interest in our trial as well as our molecule, we enrolled a total of 77 patients in multiple regions as indicated here. And patients were randomized to 12 months treatment with 2 dose levels of 434 or placebo. And as I've referenced before, our primary endpoint in the study is the change in nucleir content in the brains of these patients as measured by the specialized MRI method. We obviously looked at clinical endpoints in the study as well, those that we would hope to see and expect to see some change in clinically to demonstrate the benefit to patients. So this is a diagram of the 2 treatments versus placebo treated for over 12 months. And this is some of the data supporting our choice of primary endpoint, which is the change in brain iron on MRI. And here, we took data from our natural history study, where we looked at the iron content on the Y-axis compared it to the clinical symptom severity as measured by something called the unified MSA rating scale. Which showed a very nice correlation. This really supports our approach about why we want to prevent or reduce the iron accumulation in the brains of these patients to try and improve their symptoms. I mentioned these -- the methods that our collaborators at Vanderbilt are developing. And this is a nice depiction of this. So we've learned from the natural history study that the brain distribution is increased iron varies from patient to next. So you can't really apply a one-size-fit-all approach towards measuring the change in brain iron, Otherwise, it might be too insensitive. So what we've done is we've really taken the patient's individual age and their MRI. And then we plotted the amount of iron they have in their brain, and we compared it to control patients of a similar age. And that helps us generate a patient-specific map where you see in this color scheme areas of increased iron. So the dark red material is the strong increases in iron whereas the blue green areas are moderate increases. And this allows us to look at changes within these different regions with great precision. And the other thing that's really important is that every patient because every patient the individual map, we're going to be able to look at change in the brain iron in those regions for each patient. And that's going to give us the greatest precision of measuring this change in iron. Now just pivoting quickly to our second Phase II trial. This is our biomarker trial. And this is a single arm open label trial. So even though it's a treatment study, there's no placebo. We did this for a couple of reasons. We wanted to understand target engagement again, like in the double-blind trial. But we also wanted to get a sense as to whether or not patients who are more advanced than those in the double-blind trial also saw a clinical benefit and if we could see reductions in iron. So the target population is more advanced than the other study. It's to refer to as clinically established MSA, but they also have to have biomarker evidence. We're targeting a total of up to 15 patients. Again, treating them for 12 months and looking at the same primary end point. So as Geoffrey mentioned in his address, we think this can give us a good insight into what we can expect from our double-blind trial because this endpoint, even though this is an open label study is an objective measure with no opportunity for introducing [ bio-gen ] assessing it. And that's why we think we can get an early look at what we can expect from the Phase II study. We have continued to look at the commercial opportunity. Many companies that are interested in MSA have come and gone over the last couple of years. There's just a few of us left. And the clinicians that we've talked to over the years recognize the substantial need based on the fact that we're targeting the underlying pathology of disease and not just symptomatic treatment, they have a strong intent to prescribe. They like the oral drug and the monthly infusion or bi monthly infusion. And based on updated orphan pricing and current prevalence numbers, we now estimate potential peak sales in the U.S. of over $1 billion, and that's just for MSA and just in the U.S. So rest of world would obviously augment that substantially. So just in summary, we are targeting an orphan disease that has no approved treatments. We've got 2 very nice Phase II trials ongoing. We've got a very strong development team that I'm really pleased to be working with. They are really, my partners in drug development it's a true team effort, and we're very confident in the progress that we've made and our potential for future success. Regarding cash balance. We last reported AUD $16.7 million at the end of the month and many of you know we've recently undergone a capital raising of $4.8 million. And we have announced securities or share purchase plan at the same time as that cap raise, and that will be subject to shareholder approval towards the end of December. Clinical milestones are depicted here on the right, I won't go through all of these. But as Geoffrey mentioned, we do plan to include enrollment sorry, treatment in the fourth quarter of this year, and we'll be working our best to bring the study in as soon as possible after that last patient finishes. And as I'll mention on the next slide, we do expect to have preliminary data from our natural history study -- I'm sorry, from our biomarker study in the first half of next year. So these are the key milestones that we're aiming for. I did mention the enrollment completing. We've recently presented bioMUSE data at a scientific meeting adn we will be presenting in December data with 434 in a primate model of Parkinson's disease. We're very excited about these results. And then these are the 2 milestones I mentioned, preliminary data from the open-label study should be available in the middle of the year, and then we expect enrollment to complete by the end of the year -- sorry, not enrollment treatment. Thank you for your time and your attention.

Thank you very much. I appreciate the presentation and also it's an exciting year ahead. Some big milestones coming up and congratulations to you and the team, David, on a tremendous amount of extremely complex work that's been together through to this point. And with that, I'd like to close the informal part of the meeting. Once again, thank you for your presentation. Thank you, everyone, for attending out here or online, and we look forward to communicating with you again as we progress. Thank you.