Alterity Therapeutics Limited (ATH) Earnings Call Transcript & Summary

Good morning, and welcome to our session this morning on Alterity Therapeutics. I'm Rosemary Cummins. I'm one of the health care analysts at MST. I'd like to extend a very warm welcome to our guests this morning, Dr. David Stamler, CEO, Alterity Therapeutics. With that, I'll hand over to David, who's going to give us a presentation and then, there'll be questions and answers at the end. If you do have a question, please submit it through the link at the bottom of the screen. Thank you. And over to you, David.

All right. Thank you. By the way, I'm sorry, my camera is turned off right now. I'll probably turn it on, hopefully, during the Q&A session. Anyway, good afternoon to those in the U.S. and good morning to those in Australia. I'm very happy to give you an update on the clinical development program for ATH434-202. And these are our forward-looking statements. So what I'd like to cover today is just a brief review of the indication that we are pursuing and our overall development strategy, just to remind those who have heard this before and also to introduce to new listeners. I do want to spend time reviewing the new data from the open label, biomarker study referred to as ATH434-202. I do want to also discuss the relevance of those new data for our ongoing double-blind trial. And then lastly, I'll just conclude talking about the time lines. After that, I'm sure Rosemary may field some questions or have some questions of her own for me. So this is just a snapshot of our overall development program. And our focus today is going to be the 202 study, which is in MSA patients, or multiple system atrophy, which I'll define in a little greater detail momentarily. And as a reminder, we do have the ongoing 201 study that's due to read out at the beginning of next year. And we have completed and recently reported on our natural history study called bioMUSE, and I will just refer to those data briefly to set the stage for what we'll talk about. Very briefly, we are focused and interested in Parkinsonian disorders, which get their name from this motor manifestation referred to as Parkinsonism that comes from Parkinson's disease. And this is what we've all seen in friends or family members, the slow movement, the shuffling gait, the stiffness. It's a major cause of disability in all of these patients. Now the most common Parkinsonian disorder is Parkinson's disease itself. But there are other rare forms called -- that are referred to as either MSA or there's another one called PSP. Our target disease, our target indication is MSA, multiple system atrophy, which is a rare disease. And I'll tell you more about that in a moment. Of importance is that both Parkinson's disease and MSA have similar underlying pathology. All right. So as mentioned, MSA is a rare disease. It's highly debilitating and unfortunately, it progresses quite rapidly. There is no approved treatment for the disease. And in the U.S., it's estimated that there are between 15,000 and 50,000 patients with the disease. Now the key clinical manifestations are the motor symptoms I mentioned, the Parkinsonism, but they also have uncoordinated movements and difficulty maintaining their balance, which leads to falls, an important source of morbidity in the population. They also have, importantly, autonomic function, which is the nervous -- part of the nervousness that controls things automatically. So blood pressure, bowel function, bladder function. And this also causes a lot of disability. And lastly, as mentioned, the median -- the disease is rapidly progressive. So patients survive on average, 7 to 8 years after symptom onset. So our strategy is we are interested in targeting both iron and this important neuronal protein called alpha-synuclein. And both of these are important contributors to the pathology of MSA. You see in the diagram on the right that there's this vicious cycle that really starts with imbalance of iron that you see on the right lower side. Now iron in the body comes in 2 forms. There's the so-called labile iron that's needed for cellular metabolism and normal function. And this does generate damaging free radicals inside the body, generally in low levels. The other form of iron that were -- that's present in our bodies is in the store form, also denoted there with Fe3+. Now in diseases like MSA and Parkinson's disease, you get this excess labile iron. And what that does is that leads to cellular dysfunction, that leads this protein alpha-synuclein to aggregate, and then neurons can't function well without that protein behaving normally. It also generates oxidative stress or free radicals that you see on top of the cartoon. And ultimately, these 2 processes lead to cell death, and that cell death leads to dysfunction and impaired ability to conduct normal activities. Now it's worth noting because I'll show you a little relevant data to this, that the hallmark of MSA pathology is this protein aggregating in both nerve cells and in the so-called glial cells, which are really important cells that support the neurons. And when both of these cell types die, you really get atrophy in multiple regions of the brain. And that's really what we're interested in slowing down. So our overall approach is to really target this excess labile iron that's present in MSA to reduce this important protein from forming clumps and becoming nonfunctional, to reduce oxidative stress with the net result of rescuing brain cells as well as neuronal function. In this context, we hope that 434 will modify the course of disease and improve function in these individuals. Okay. So now let's turn to the clinical development program. As I mentioned, there's 3 studies that we have ongoing or one concluded. This is -- the first one is the natural history study, and this was really a study designed to characterize early-stage patients that we enrolled in our definitive, double-blind trial and to really derisk the overall Phase II program. We looked at multiple biomarkers you can see listed there. I won't go into those in too much detail, but some of those I'll talk about today regarding the open-label study. The next study in the table is the double-blind trial, that's in early-stage patients, similar to the bioMUSE study that's completed enrollment, very similar biomarkers to bioMUSE study. And then the final study on the right side of the slide is the open-labile study that we referred to as 202. And this is looking at efficacy and safety of 434, but in a more advanced patient population than we enrolled in either of the other 2 studies. These patients were treated for 12 months and essentially, we looked at the same biomarkers, both MRI and fluid biomarkers and clinical measures as the other trials. A word about bioMUSE before we go on to 202. This study was critical in helping us design and derisk the Phase II program. This really helped us optimize patient selection in the Phase II trials using advanced MRI methods that you can see depicted there on the screen as well as using state-of-the-art biomarkers. This is on this protein alpha-synuclein and spinal fluid. Sophisticated laboratory methods are needed to really characterize that. And this was important because this really helped us fine-tune the criteria for enrolling patients in the trial, excluding patients who might have Parkinson's disease and really improving our chance of success. On the bottom part of the slide, you see some of the great work that's being done at Vanderbilt by our collaborators there, where they're really developing new methods for measuring volume and quantifying iron with precision. And these are both important measures in our treatment studies. Okay. So I'm now going to move on to the 202 study, which, as you recall, is an open-label study in up to 10 patients. Now although 10 patients are enrolled, what we're looking at is an interim data cut and we have data available for 7 participants who have received 6 months of treatment. Now the first endpoint that we reported on about a week ago is what's called the UMSARS, and that just stands for the Unified MSA Rating Scale. And that is an activity of daily living scale. And of note, 43% of the patients where we reported data had improvement over 6 months. This was unexpected as, in general, patients decline and do decline rapidly. Now just to give you a little flavor for what we're looking at, these are the 12 areas of function that are assessed with the UMSARS. So you can see things like speech, swallowing, dressing, hygiene, walking. And then as I mentioned, those orthostatic symptoms, urinary function, et cetera. So these are all really critical domains that are affected in MSA, and showing improvement on these is really important. Now the next endpoint that we -- the one thing -- I'm sorry, one thing I'd like to comment on because I was asked after we released our data, "Why did we only look at part one where there are multiple parts to the study?" And there's a long answer to it. But the reason that we looked -- focused on this one, the short answer is that this is the clinical endpoint that the FDA and other regulatory agencies are interested in because they really care about how patients function or how they feel. So that's why we focused on this component of the UMSARS. The other subscales are less relevant and others are not so good at assessing other symptoms that is part of the disease. Now we also looked at Global Impression of Change. And this is a rating scale where patients are basically asked to rate their symptoms compared to just before starting therapy. Now the same question was put to both the patient and to the treating clinician, and they were asked to rate their overall neurologic symptoms. And we see that 29% of the patients reported stable or improved treatment. And then finally, regarding safety, which we're always interested in, we did not report any serious adverse events that were attributed to study drug. The drug was well tolerated, and we detected no new safety signals in this study. Now turning to the biomarkers. We looked at several of these biomarkers. So just to remind you, on MRI, we had 7 patients that were followed for 6 months. And we also had 3 patients that had 12 months of data. And in these patients, we were able to look at iron and volume, as I mentioned before, and also this chemical or metabolic marker called myoinositol. And that's something that we're exploring as a marker of pathology in the brain. And as mentioned before, glial cells are cells that are significantly affected in this disease. So we wanted to look at this marker and see if we could affect it as well. And we also looked at a protein biomarker called Neurofilament Light Chain. We looked at this in 5 patients. We had data on 5 patients that had data from both 6 baseline and at 6 months. And as mentioned, this is a marker of neuronal injury, and we looked at this in spinal fluids, spinal fluid levels. One comment. Although we didn't mention this in the press release, we didn't report on alpha-synuclein. And part of the issue is a technical one is that the state of the art is not able to quantify levels of alpha-synuclein in spinal fluid. So we do have those specimens banked for future analysis if those methods do become available. So from a results standpoint, in clinical responders, and these are the people who stabilized or improved on all the clinical assessments, we compared those to the individuals who declined. We saw the brain volume was stable between 6 and 12 months in those 3 patients, although all the patients, in general, did decline between baseline and 6 months. That's not unexpected because this is a progressive disease and 6 months may not really be enough treatment time to observe an effect. Regarding iron, we did see that iron content in the substantia nigra, and that's a region of the brain that's largely affected in MSA. Almost all patients do have pathology there. And also, that's the area that's affected in Parkinson's disease. And we saw stable iron levels over 12 months in these patients. Regarding myoinositol, that's the exploratory biomarker. There were smaller increases in the clinical responders compared to those who declined, suggesting, not definitive proof, of course, but suggesting that we may reduce the pathology in glial cells with treatment. And then finally, NfL levels were stable on average in the clinical responders when compared to those patients who declined who had increases. So overall, the biomarker results were quite reassuring, and we did see these changes, most notably the stabilization or improvement in the patients who had clinical improvement. So in summary, 43% of patients -- or participants, excuse me, showed improvement on the Unified MSA Rating Scale and activities of daily living that looks at function, 29% of the patients had stable or improving neurologic symptoms. We had objective biomarker evidence of improvement that was consistent with the clinical findings and, in general, ATH434 was well tolerated. I think one final point to be made and emphasized is that the patients who did the best in this trial that stabilized or improved, have less advanced disease than those that progressed. And I think that is a very good indication for -- and I think makes me very happy with the design of our Phase II double-blind trial, where we did aim to recruit earlier-stage patients. And also, as I mentioned about the clinical observations are supported by objective biomarker data. Obviously, we don't have a placebo control in this study, which is what we need to be definitive. But the objective biomarker data reinforces those findings as well as, I think, our data do compare favorably to historical controls of untreated patients that I referenced in the press release. So with that, I'll stop there, and thank you for your attention and then turn it back to Rosemary. Hopefully, I can get on camera for the Q&A session. So give me a second.

I think you're back.

All right. I am hopefully back. Let's see. There we go.

Certainly. Thank you. And thank you, David, for the presentation. Great summary. I just thought, and again, please submit any questions through the Q&A panel on the screen. One of the questions I'd like to start with, if I may, is just looking at the, obviously, the ongoing trial program, pivotal trial program from the 201 to presumably the 301. In terms of endpoints, it's obviously a big -- you had made some enormous progress in understanding the pathology of the disease and what the relevant markets there. But also at the moment, the standard of care has been a functional assessment. How do you see that going forward for your 301 program?

Yes. So for the double-blind trial, we have specified that the -- currently, that the primary endpoint is change in iron in these regions affected in the brain of MSA patients, substantia nigra and then 2 other regions that have complex Latin names that probably don't mean a whole lot to people. So those are still -- that's still very much our interest. And as our key secondary endpoint, we have the Unified MSA Rating Scale. So we are still looking at these data. What we reported was just the initial look at the data as we promised to the market. And based on our final review of those data, we'll make a determination. So I imagine that our endpoint will be very similar to what's in the 202 study right now -- or sorry, the 201 double-blind study now. It's possible we could switch it to volume. But right now, I don't have a firm answer. I think we'll know. And if we do make a major change to that endpoint, we would likely disclose that to the market in an update. But right now, we have no specific plans to change that endpoint as yet.

Okay. Great. And in terms of from the FDA perspective, what do you see? How will they look at the start coming through and what the perspective would be?

Yes. I think -- so the FDA will -- they'll be very interested in the UMSARS as an endpoint. I think we know that from our initial regulatory interactions, they've been very clear that they're very interested in how a patient feels, how they function or whether or not you prolong their survival. So we were never of the opinion that the iron stabilizing or changing iron in the brain would necessarily support approval without a clinical benefit. Now that we see that there's really good potential for a clinical benefit in a small number of people, I'm really encouraged overall and look forward to taking these and the double-blind data to the FDA. Right now, we're going to make our determination on what to do with the double-blind trial based on this. And I don't know that we'll have an FDA interaction on the double-blind trial until we get the final results.

Okay. In that case, then with the UMSARS, obviously, to date, there hasn't been a positive Phase III trial that the FDA approved. And presumably, all those trials would have gone through a positive Phase II UMSARS. Is there anything in your UMSARS data to date that stands out that's different to what's gone before in terms of the results and confidence in a Phase III?

Yes. Well, so I guess the first thing I'd like to comment on is, has anyone really had a positive Phase II trial. I'm not really aware of one. I mean I don't want to get too far into the weeds on the competitive landscape. But a few years ago, there was a trial by Biohaven that had -- it was a myeloperoxidase inhibitor and they didn't really have a -- they had a Phase II in Parkinson's disease, which may have shown a benefit. And then when they went into MSA, they were negative. Lundbeck has recently completed a monoclonal antibody study. In that trial, they did not hit their primary endpoint. They hinted that in a post hoc analysis, they saw something and they're going forward. So I don't think that trial was positive. So I don't -- and then historically, about 10 years ago, there was a Phase II study with rifampin -- or rifampicin and rasagiline trial. And those were both pretty sizable trials, but negative. So I don't know that anyone has seen a robust effect on the UMSARS. Regarding what we saw, we hadn't looked at -- I haven't looked at the components of it yet. I think one thing to be mentioned is it's important to take the scale as a whole because patients -- it's a very heterogeneous disease. Some patients may have more orthostatic symptoms. Other may have more problems with falls or swallowing. And some people, if they have more pathology in those areas, may demonstrate greater benefit or stabilization over time. And that's why I think it's important to look at the scale that assesses all the components of dysfunction.

Okay. That's great. And actually you reminded me with your introduction in terms of the patient numbers, so 15,000 to 50,000. Obviously, that's a fairly broad number, and that reflects the disease and the difficulty in actually diagnosing its level of disease effectively. So I'll just maybe think, look, if there is no definitive test, hence, the wide spread of numbers, do you see the drug if it is approved in MSA being used sort of quasi off-label in terms of a lot of these conditions, which it's very nebulous and difficult to diagnose and give a proper handle to it. They like to be used in a wider population in strictly the MSA patients given the commonality of the pathology.

Yes. So while we would never encourage use outside of an approved indication, I would agree that it's likely that Parkinson's patients will be treated with the drug. Because early on, these patients with MSA can very much look like Parkinson's. And it's only a couple of years if they start demonstrating more orthostatic symptoms or if they progress more rapidly, or if they become unresponsive to levodopa, all of which are very uncommon in Parkinson's disease, does a neurologist think this may not be garden variety, Parkinson's. So -- and because it's difficult to diagnose, it's quite possible that patients will be treated. I would not be surprised given the similar pathology to Parkinson's disease and MSA because there's elevated iron in Parkinson's patients. They have alpha-synuclein accumulating in areas of pathology. I would not be surprised if some enterprising clinicians would want to use the drug. And obviously, we have interest in doing Parkinson's disease trials down the road. So I would expect that there would be additional uses outside of the approved indication.

Two questions that have come through, I'll just read them. Two other clinical responders had 12 months of treatment. For those participants, is the improvement results at 6 months or 12 months? If at 12 months, what was the result for the third 12-month participant?

Yes. So we don't have the clinical data on those patients. We only have neuroimaging data on those patients at this point, 2 improved and 1 declined. So it's those 2 that improved -- or I should say, stabilized or improved, where they were clinically stable or improved at 6 months and they had stable MRI findings between 6 months and 12 months on volume and on iron.

Okay. And last question, thinking of some of the other approaches being studied, including GLP-1, is it possible that ATH434 could be used in conjunction with other approaches? And would that make ATH434 an attractive target?

Well, I think so. I think everyone who does work in neurologic diseases know it's very hard to find a magic bullet. If you look at Alzheimer's disease, a lot of excitement over the monoclonal antibodies that target beta amyloid. But they don't stop the course of disease. They slow it. So anything one can do to combine drugs with different mechanisms, whether or not you get an additive effect is -- would be great, a synergistic effect, if you kind of target 2 different components of the same pathway, you could potentially get an even more robust change. So yes, I think this, like many other neurologic diseases, is going to require multiple drugs that hit different targets. And I think the drugs that are most advanced in the clinic right now are the 2 antibodies, one from Lundbeck and one from Takeda. There are a couple of other small molecules with less of a track record, if you will, but they have different mechanisms than 434. So I do believe that there will be potential for combining 434 with any of those drugs.

I'm sorry, there is one more question. Will Alterity still have enough money to get us to the results of the double-blinded placebo study results in January 2025 if the [ 0.7 cents ] options aren't taken up in August? Sorry, it's a very...

Yes. The short answer is we are capitalized to complete both trials, the open-label study that we've just been talking about as well as the double-blind trial that's going to read out in January of next year. So yes, we are fully funded for those studies.

I think there are no more questions. Thank you very, very much. They're great news. Obviously, great news. I'm sure clinicians and patients that will be looking will be following Alterity going forward. This is great news, of course.

It's true. Yes. Thank you. It's true. The one thing I will add is that since we released the data, there have been increased numbers of inbound inquiries from patients and even clinicians asking about open-label extensions and compassionate use. So those are things that we would love to do, and we're looking at that.

All right. I've just read some questions that are just coming in. So we'd extend this for a moment. Based on the progress so far, we don't seem to have any visibility on the -- in the market on our recent successes. What are we doing to create interest or retail institutional investment? Is there any interest from pharmaceutical companies based on the recent trial results?

Yes. So lots of questions there. Yes, we are actively planning our -- a significant retail strategy going forward, primarily focused in Australia, where we have good visibility into our investor base and there's a lot of excitement. We are also planning on doing retail activities in the U.S. speaking at conferences. I would add, there is a lot of interest to present these data at upcoming scientific congresses, both these data as well as data from the double-blind trial. Even though it's early, it's only baseline data, there is a lot of excitement. And finally, on the partnership front, yes, we have a lot of interest. We have ongoing discussions with many partners, big and small. They obviously like to see data, and we are in follow-up discussions with those companies based on these results. So yes, exciting things going forward.

And then all the news coming, news flow, I could just add will certainly generate even more, I'd imagine. One, just to add on to that was the -- I see in the past, you've received funding through the Michael J. Fox Foundation. Is that another potential funding source?

It is. And what -- we have explored that and now that we have some data, some efficacy data, accumulating safety data, we will be going back and talking to the Fox Foundation about funding a trial in Parkinson's disease. I think that's really where their interest...

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That's why the biomarker data is so important along with the data.

Yes. It's obviously a much bigger patient population so that would be a great interest. Thank you very much, David. And again, congratulations. Really great news from not only investment point, obviously, but very much for patients going forward. So well done, and thank you.

Great. Thank you, Rosemary.