Alterity Therapeutics Limited (ATH) Earnings Call Transcript & Summary

Good morning, everybody, and thank you for joining Alterity Therapeutics Investor Webcast this morning. Presenting on the call today is Alterity's CEO, David Stamler, who will be providing some additional insights into the efficacy data that was released to the ASX on Monday, 4th of December. He'll also provide a review of clinical progress made so far this year. [Operator Instructions] So with that, I thank you again, and I'll now hand over to you, David.

Great. Thank you, Hannah, and welcome to all of our shareholders and other interested parties. I'm really excited to be able to share the recent data that we've disclosed regarding our lead clinical candidate. And I'm also excited to tell you about the great progress we've made over the last several months regarding our clinical program. These are our forward-looking statements, and I'd encourage you to refer to them regarding any potential risks. So what I want to talk about on today's call is really the new primate data that we just disclosed to the market. This is an exciting study for us, and it really does help advance our clinical program and our understanding and I think validates our approach. So I'll talk about that a bit later. I also do want to talk about our ongoing clinical programs and what we can expect from those. And then also I want to talk about our plans for 2024. We've got several value inflection points coming and I think it's a really exciting time as 2024 becomes a pivotal year for the company. So before I talk about the primate data, I just wanted to review a little bit about our clinical strategy as it relates to how our drug works. And I thought that would really help set the stage. So as many of you may know, we address Parkinsonian disorders. And this is a group of diseases. It gets its name from Parkinson's disease. And all these diseases have Parkinsonism as a feature. And Parkinsonism is simply the motor features that you've probably seen in a friend or a relative if they're older and that's the slowed movement or the tremor that they may experience. And this causes a lot of disability in these individuals. And it gets its name because Parkinson's disease is the most common cause. Now there are other diseases that manifest the same motor symptoms, and those are referred to as Parkinsonian disorders because of the motor symptoms. And one of those diseases is we refer to as multiple system atrophy or MSA. That is our lead indication so that's why I'm bringing some attention to it. It is an orphan disease with no approved therapy. So it's a huge unmet need for these patients. And accordingly, it also represents a significant opportunity for investors with success. One thing I want to comment on before talking about the animal data in Parkinson's disease that we generated is that Parkinson's disease and MSA share similar underlying pathology, which is why these new data are so important, not only for 434 potentially in Parkinson's disease, but also for our ongoing programs. So this is a study from patients with Parkinson's disease. And then you'll see on the right side of the slide, these are individuals with MSA -- or multiple system atrophy or MSA. And this is the amount of brain iron in the areas of pathology in these patients. And what you see, the patients are in blue, the control patients that are of the same age or in green, and you can see that there is increased iron in the brains of these individuals. And you see this both in Parkinson's disease and MSA. And this is really what we're targeting with our therapy. Now if you fast forward about 20 to 25 years, there have been great advances in the specialized MRI methods where you can actually measure the iron in the brain of a living patient. The graphs you see are from autopsy studies. And what you see at the tip of the orange arrow is the dark red staining material that's so important for helping us to not only diagnose the disease for people coming into our clinical trial but also as a key end point for our drugs. I'm not going to spend too much time talking about the science, although I do love talking about it. But I would draw your attention to the right side of the slide, which is really what this excess iron is doing in these areas of pathology. It kind of creates this vicious cycle where the imbalance leads to generation of free radicals that damage things like DNA and mitochondria and lipids inside the cells. And that ultimately leads to an inflammatory response which is -- also injures the cells. But also the excess iron actually causes this protein alpha-synuclein to form clumps, and therefore, it can't do its business. So what our overall strategy is trying to do is to redistribute the excess iron in the central nervous system in areas where it shouldn't be, and in doing so, reduce this important protein alpha-synuclein to stop it from clumping and to block the oxidated stress with the overall aim of rescuing neuronal function. And based on this approach, we have the potential to modify the course of disease. And if you will, this is really the strategy that everyone is looking at that I shouldn't say the -- not the entire scientific strategy, but disease-modifying therapy is really the approach that many companies are looking for. All right. So let's just talk a little bit about 434 which is our disease-modifying drug candidate. As mentioned, it redistributes excess iron and it reduces this alpha-synuclein clumping in the brain. Importantly, it is an oral agent, so it can be given easily at home. No infusion is required as many potential competing therapies do require. It can treat multiple disorders. I've told you it has an orphan designation, and we have had numerous discussions with regulatory agencies, both in the U.S. at the FDA and in the European authorities who have endorsed our clinical development approach. Okay. So now let's talk a little bit about the new primate data which is so exciting for us. So this is a study that we did in an established model of Parkinson's disease. And this is important because -- and primates in particular are important because they are closer to humans, both in their neuroanatomy and their physiology and also they have behaviors and deficits in -- with experimentally induced disease that really mimics what humans experience. And for all these reasons, this study is quite important and increases -- overall increases our confidence level about what we're doing in the clinic. So what we showed, and I'll walk through the data on the next slide in a moment, but what we showed was that 434 improved the motor skills and the general behavior, sometimes it's better to think of it as general function, in these animals with experimentally induced Parkinson's disease. Now importantly, from our -- from the drug's action, the favorable impact on these Parkinson's symptoms in the animals was observed in -- with lower brain iron in the areas of pathology. And if you recall from that human slide I showed you, there's -- we don't want to target all the iron, we want to target just the excess iron which is contributing to the ongoing pathology. We also showed that 434 treatment increased levels of a protein called synaptophysin, which is a mouthful, but it is a protein marker that reflects the functional connections that exist between neurons. And that's really important for neurons to be able to communicate. So I won't show the data on synaptophysin. It's a pretty data-intensive study, but the poster is at our website, and I would encourage all of you who are interested to go investigate that and read about it in greater detail. So this is an outline of the monkey Parkinson's study. After the animals were kind of allowed to adapt to their environment and the experimental disease was induced, we then assessed the animals at baseline with a motor scale, and then we repeated that periodically over the course of the study at 8 weeks, 12 weeks and then at the end of therapy, we measured brain iron. Now animals received what we sometimes refer to on the next slide as vehicle, but vehicle really means placebo or on this light blue is 3 milligrams per kilogram, you'll see that, and then of a higher dose of ATH434 that's at 10. So keep those in mind, those 2 dose levels versus vehicle or placebo. Now I realize there's quite a bit of data on this slide. So just bear with me for a moment while I walk you through it. So on the left, we see these are the general motor symptoms. And on the right, this is the general behavior or functional items. Now before you look at the data, if you take a look at what I've circled in the orange box, the motor function we looked at are fine motor skills, eating, eye blink. And we also looked at gross motor skills on the side that was affected. Now regarding behavior or function, if you then look at these things, whether it's appetite, response to food, activity, balance, climbing, all these are things that are quite analogous to behaviors that humans may display. And that's part of the reason that the study is so important. Now dark blue represents the high dose, light blue the low dose. And what you see here is day 2 is baseline that after 12 weeks of therapy, we see all the animals treated with 434 had a significant reduction in their motor symptoms, which reflects improvement. And you compare that to the 2 out of the 3 placebo patients -- or monkeys that actually got worse. And 1 animal didn't change, they didn't get much of a -- of experimentally induced Parkinson's. On the right, the same thing is the case. We see that there -- all the animals treated with 434 had significant improvements over the course of the 12 weeks of treatment compared to the 2 animals that didn't improve or -- functionally were stable. Now the question you ask is, this is all behavior, what about iron? So now we did also look at the iron in the brains of these animals. And those animals have improved, whether it's all these 434-treated animals or that lone placebo-treated patient that didn't have much, the lowest iron levels were associated with the greatest clinical improvement. So the combination of the lowering of the iron, along with the improved clinical symptoms in this higher order animal, which is closer to humans is why we're so excited that these data really portend good things for our clinical program. All right. So in summary, you see this box at the bottom, 434, 5 out of 5 animals had improving scores both in general motor and general function scores. And then 2 out of the 3 vehicle animals had worsening or stable scores. Okay. So now -- so the study that I just told you about is at the bottom of this slide. This is the study led by Dr. Bradbury, who I've worked with for several years on several drug approvals. And -- but this is a summary of the various experiments we've done in animals over the years. And I think this recent study augments what we have been seeing all along. And you like to see this, multiple different animal models, multiple different disease models and in all of these studies, we see reduction in iron. We see reduction in synuclein, where it was measured. We couldn't measure it in this latest study. But we also see improvement in the number of neurons or in the functional connections between those neurons. And importantly, all these -- in all these studies, we saw improved motor performance, which is such an important symptom in these patients with Parkinson's disease or Parkinsonism. So that's what I want to tell you about the preclinical. I now want to pivot and tell you a little bit about the progress we've made in the clinic. So the first line on the graph is our double-blind study, I'll refer to it as 201. And that's our definitive trial or our gold standard trial because it's a randomized, double-blind and placebo-controlled study in our lead indication MSA. And as you probably know, enrollment in that study is complete. The second study here, the 202 study, is also in the same indication, MSA, but in a more advanced patient population. And that study is enrolling nicely. And I'll tell you more about when we expect to have some data from that. We are concluding our natural history study, which has been so helpful in derisking our Phase II program. And then I just finished telling you about our -- the animal study in Parkinson's disease. And just to remind everyone, this study was supported by a grant from the Michael J. Fox Foundation, which is one of the premier research foundations in Parkinson's disease in the world. So this is a snapshot of our clinical trials. I think the thing to focus on is in the first 2 columns. As I mentioned, the 201 study in the first column is really the gold standard as a randomized double-blind and placebo-controlled study. We're examining the safety and efficacy of 434 in early-stage patients. We enrolled 77 patients at global -- 23 global sites. And those patients are being treated with 2 dose levels of 434 or placebo. And then our primary endpoint based on all the data we've shown with clinical -- with our animal studies and the drug's action were focused on the primary endpoint being the change in the iron content by brain MRI and also in various clinical endpoints that are going to be important for demonstrating benefit in patients. The other Phase II study, the 202, is a single-arm open-label study in a more advanced population, also receiving 12 months of treatment with just a high dose. And the primary endpoint, and this is worth noting, is the same as the endpoint in the double-blind trial. And because this is an objective measure, this is going to be important in helping us understand what we may be able to see in the double-blind study. So we're really excited to get a look at these data in the first part of 2024. And we'll also look at the relevant clinical endpoints. We -- as I mentioned at the beginning, there is a tremendous unmet need for these patients that have no disease-modifying therapy. And based on that and the significance of this disease, we do have a very significant opportunity with a successful drug. Clinicians had a very strong intent to prescribe because we're addressing the underlying pathology and they really appreciated the fact that this is an oral agent. And based on relatively modest assumptions and contemporary pricing of orphan drugs, we estimate peak sales at $1.1 billion per year in the U.S. alone, and that's just for MSA alone, not for Parkinson's disease. So these are our key milestones for the next year or so. These are the things that we've recently accomplished with the enrollment, the presentation of data and then the -- both of the animal data as well as the bioMUSE study data. We expect preliminary data from the open-label study in the middle of the year. And we expect with the enrollment completing in November of this year in the double-blind study that we will complete the study in November of 2024. So in essence, what we are -- we're really excited about the data that we have generated in this primate model. It's -- this model is closer to humans and we think really validates our clinical concept for what we're trying to do, both in MSA as well as in Parkinson's disease. We've made great progress on our clinical program over the course of the year, and we're looking forward to completion of the 201 double-blind study as well as the open-label biomarker study where we expect to get data in the first half of next year. So with that, I will conclude, and I'll be happy to take your questions.

Thanks very much, David. [Operator Instructions] So David, we have a few questions that came in, in advance, and we've got a few already that have been asked live. I'll start with the ones that came in before today. The first one being, can you please talk about your cash position?

Yes. So we are grateful for the support that we've received from investors over -- with the recent fundraising. We obviously have some long-standing investors and new investors who participated. So we're very happy that we announced that last month. We're looking forward to bringing in additional cash through the placement of tranche 2, which we expect will occur at the end of December. I think many shareholders may know when we announced that fundraising, we also were able to announce our plans for a share purchase plan or SPP that, with approval, we expect will commence during the month of January and investors will be able to participate at the same -- under the same terms as the investors who came in, in this last round. You may also know from that announcement that we issued with the placement some short-dated and long-dated options. The short-dated options are really tied to our confidence level of results from the open-label biomarker study, and we expect that has potential to bring in significant revenue by around the middle of the year. And with all these things in place, even before the exercising of any future options or bringing in additional money, we are -- we've been able to establish our cash position taking us into the second half of this year. And along with this and the fact that we're looking to carefully manage our cash, we're confident about our future regarding funding of the company.

Thanks so much, David. We do have a few questions here that are quite similar. So I'm going to group them all into one. And it is, in essence, are you able to quantify the impact of a study in monkeys versus studies that have been done in rats in terms of confidence in showing the same effect in humans?

Yes. So as I really tried to highlight during my talk, the -- we always try and progress from some smaller animal experiments to larger animal experiments and always to humans. And in that evolution, especially in going to the primates, we're very happy to see the efficacy data in the higher-order animals because, as I mentioned, the brain structure, its evolution, the neuroanatomical connections are much closer to how humans' brains are wired and how they function than the rodents. So we always start with the rodent studies, whether it's rats or mice, and then we progress to larger animals like the primates. So because of the similarities between the monkey brain and the human brain for all those reasons, this is -- these are exciting data, and that's why we're so confident about the potential for 434 in our clinical trials.

All right. Thanks very much, David. The next one, how does reducing iron translate into helping patients?

Yes. So that's an important issue. I want to point out that patients with Parkinson's disease and patients with MSA don't have total body iron overload. There are diseases that exist where patients do have total body iron overload. But Parkinson's disease or MSA do not. They just have, if you will, maldistribution of iron in certain regions of the brain. Now we don't know exactly why the iron gets increased in those regions, but it's a clear observation. And we also know that the excess iron that is there does correlate with disease severity. So we know it's doing something harmful to the cells in the brain where it's accumulating. So what we're really trying to do with our therapy is to take that iron and, if you will, pull it out of those regions, out of those cells where it's causing the malfunctioning, if you will, that's causing that damage that I showed on one of the slides. And we're trying to, by taking out of the cells, restore those cells, help or save them and then allow them to function properly. So it's really by targeting the iron, and then remember that protein that I mentioned, we're also -- what we're really trying to do is improve the neurons functioning. And by doing that, we think that we can actually improve the patient's functions. So targeting the iron actually translates into potential for clinical benefit.

All right. Thank you very much. Again, there are a few similar questions and to group them, it is if the Phase II study is to be successful, what would the next steps be following that? Would it be a Phase III or communication with the FDA?

Yes, that's a great question. So it could be either of those. And I think one of the things that's happened in orphan drug development in the last several years is a willingness of the FDA, in particular, to entertain strategies of accelerated approvals with demonstration of beneficial effects on biomarkers. And certain biomarkers have been -- provided the basis for supporting those accelerated approvals. So based on our results from the Phase II study, we very well may be able to have such a conversation with the FDA about accelerated approval. Obviously, it's always driven by the data. But it's something that a few years ago, I couldn't -- I wouldn't have wanted to make a statement like that. But now the FDA is realizing the difficulties in treating these diseases, the terrible nature of these diseases and they really want to try and do what's prudent and pragmatic to bring these treatments to patients as soon as possible. The flip side of that is if we don't have that conversation with the FDA, if the data doesn't support it, we would then, yes, proceed to have a study -- a discussion about another clinical trial that would be larger, potentially larger than the one we're doing to support an approval. So that's -- those are the 2 main options that we would entertain.

All right. Thank you very much. The next one is how common is it to measure up motor improvements in Parkinsonian disorders in [ hemi ] Parkinsonian primates? How predictive or indicative are these data sets in your opinion?

Yes. Well, I think put it this way, it's certainly of more value than the smaller animals. And I think that's part of the reason that we're so excited. Predictive value is a more difficult question because you need hundreds of experiments with drugs that succeed and fail that have all these tests done. And in order to have a reasonable -- to have a reasonable positive predictive value. So I wouldn't want to try and make that claim because no such data exists. But as I had referenced before, the existence of data in the higher order animal that does have functional behavior similar to humans as well as neuroanatomical structure similar to humans or closer to humans than the other studies. That's why our confidence level is so high.

All right. Thank you very much. Just a few more before we finish today. Can you please remind us when we are going to see any data results from the Phase II study preliminary or otherwise?

Yes. So the -- there's 2 Phase II studies, just to be clear. The biomarker study which is the open-label study, we have plans to have data in the middle of next year, as mentioned on my time line slide. The other Phase II study, the double-blind study is one that the study completes in November. And depending on how quickly we can clean the data and lock the database and bring that in-house, we hope to have data either at the end of '24 or in the early part of 2025.

All right then. Thank you. Has Alterity got any plans to partner with any pharmaceutical companies in the future?

We are always open to discussion with partnering with companies. We have several ongoing discussions with both small and larger companies that have continued [ the main ] interest over the years in our program. Whenever we have exciting data like we just released, it kind of stimulates them to reach out to us again and to talk. So yes, the short answer is we do have these discussions that are ongoing, and we will continue to entertain partnership discussions.

You have developed a number of new investigative techniques in assessing iron levels in different parts of the brain. Would you consider commercializing this IP?

Yes. That is a discussion that many -- much of the expertise that developed this technology sits in -- at Vanderbilt University. They've been our thought partners in this program, and they are really developing these techniques. They have been published before. So it's not clear that there is IP. However, how we're utilizing them and the methods by which they're applying them are proprietary, if you will. So there -- it's not something off the shelf that anyone else can do, but we will entertain the potential for looking to develop intellectual property around them.

All right. Two more here, and then we'll finish up for the day. Does the open-label biomarker study derisk the broader Phase II study? And might this impact any future conversations with the FDA?

So yes, the -- and I didn't spend too much time talking about the biomarker study in the interest of time. But yes, it does significantly derisk the Phase II study. To remind everyone, that study commenced in the middle of 2020 during the pandemic, and we recruited patients that were very similar to those that we ultimately enrolled into the Phase II study. And what that allowed us to do is to select the endpoints that we thought were most reliably measured and where we had the greatest potential for demonstrating an effect on the biomarker itself. It also had the added benefit that although we enrolled -- we aimed to enroll about 20 patients with MSA, initially, we wound up including about 4 to 5 patients who turned out to have Parkinson's disease. So we could go back and take from that study those learnings and incorporate them into the Phase II study before it started enrolling. And as a consequence, we could enrich our patient population with bona fide MSA patients, which is so important. You don't want to mix Parkinson's patients in with MSA patients because that can confound your results. So yes, it really did help design the study and significantly derisk it by allowing us to make sure we got just the right patients and to make sure that we included the right endpoints where we could -- where we had the greatest opportunity for demonstrating a benefit.

All right. Thank you very much. So there's just one final question here. And it says, can you talk briefly about previous attempts by the industry to remove excess iron from the brain tissues and why those attempts were not successful?

Yes. That's a really good question. I think the one thing to say about it is not all drugs that target iron are the same. There are 2 different forms of iron and that a chemist would know about. And you can target one form or the other. You can also target those forms of iron by binding tightly or binding loosely. Now if you bind tightly, you tend to leach iron from the body and remove it. And that's not something we want to do in this disease. So there are drugs that have looked at these diseases but they act differently. And they also have -- they act differently in terms of how they bind to iron, but they also can have certain off-target activity. And the off-target means kind of an undesirable side effect that can cause other problems for patients. So other drugs that have looked at these diseases may have been able to bind iron, but they don't bind it in the same way that we do, and they have different off-target activities. So there might be a study out there where there's no benefit. But you can't really rely on that because these drugs really are different even though they have similar activities.

All right. Thank you very much, David, and thank you to everyone who joined us. We have run out of time today. I'm very sorry. Again, if you do have a question that we didn't get to or you would like some more clarity on your answer, please e-mail me directly. My email address is at the bottom of the announcements. David, before we wrap up, do you have any closing remarks?

Yes, I'd just like to say thanks again for everyone for participating and for your continued support. I think we've got an exciting year ahead of us both with our 2 studies, and we're really excited about not only what we can bring to patients, but the value that we can bring to shareholders.

Thank you very much, David, and thank you, everybody, for joining. Goodbye.

Bye-bye.

Goodbye.