Altimmune, Inc. (ALT) Earnings Call Transcript & Summary

Greetings. Welcome to Altimmune, Inc. ALT-801 interim data call. [Operator Instructions] Please note, this conference is being recorded. At this time, I'll now hand the call over to Stacey Jurchison. Please go ahead, Stacey.

Thank you, Rob, and good morning, everyone. Thank you for joining us. Members of the Altimmune team participating on the call today are Vipin Garg, Chief Executive Officer; Scott Harris, Chief Medical Officer; Scot Roberts, Chief Scientific Officer; and Will Brown, Chief Financial Officer. Please note that we issued a press release this morning, which is the subject of our discussion today. You may find a copy of this press release on the IR section of our website. Before we begin, I'd like to remind everyone that remarks about future expectations, plans and prospects constitute forward-looking statements for purpose of safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Altimmune cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated, including those related to COVID-19 and its impact on our business operations, clinical trials and results of operations. For a discussion of some of the risks and factors that could affect the company's future results, please see the risk factors and other cautionary statements contained in the company's filings with the SEC. Any statements made on this conference call speak only as of today's date, Wednesday, June 16, 2021, and the company does not undertake any obligation to update any of these forward-looking statements to reflect events or circumstances that occur on or after today's date. As a reminder, this conference call is being recorded and will be available for audio replay on Altimmune's website. With that, I will now turn the call over to Dr. Vipin Garg to begin today's call.

Thank you, Stacey, and good morning, everyone. We're very excited that you could join us today to review the positive interim Phase I clinical data for ALT-801, our GLP-1/glucagon dual receptor agonist under development for NASH. These study results were announced in a press release this morning. We are very encouraged by these data, which suggests that ALT-801 could be a compelling treatment option in the multibillion-dollar GLP-1 therapeutic class, should future clinical data continue to reflect the trends observed in the initial stage of our first in-human clinical trial. The global market opportunity for the GLP-1 receptor class of drugs is very large and continues to grow. Most experts believe that this growth will continue for the foreseeable future as strength in obesity and lifestyle factors fueled the rising incidence of metabolic diseases. It is well-known that the obesity epidemic, principally evident in developed nations, has contributed to the development of many diseases, many of which like NAFLD and NASH have no approved therapies available. The development of new therapies holds tremendous promise for these patients. If ultimately approved and successfully commercialized, we believe that ALT-801 could experience enormous success. First, we believe ALT-801 holds the promise of a potent therapeutic via its dual mechanism of action. It is designed to combine the activity of GLP-1 to reduce appetite and insulin resistance with the activity of glucagon to increase energy expenditure. This may limit the synergistic effect of diet and exercise that so many of us used to control our weight. Second, the prior preclinical data and the emerging clinical data suggests ALT-801 could have a PK profile that results in improved GI tolerability. This could be a significant attribute as GI intolerability is a major patient compliance issue within this class of drugs and the single greatest reason behind treatment discontinuation among patients. For these reasons, we are very encouraged both about the profile of ALT-801 and the latest clinical data, which are beginning to provide insights into the potential benefit of ALT-801's dual agonist approach. I will now turn the call over to Dr. Scott Harris, our Chief Medical Officer, who will review the interim Phase I clinical data. Scott?

Thank you, Vipin, and good morning, everyone. For our call today, I will begin with a review of the data we reported this morning. Following that, I will talk about our clinical development plans for ALT-801, including proposed NAFLD and obesity studies. The results we shared this morning are from a 6-week interim analysis of our ongoing 12-week Phase I placebo-controlled single and multiple ascending dose study of ALT-801. The study is currently being conducted in Australia under a clinical trial application and is enrolling overweight and obese volunteers. We have completed the single ascending dose phase of the study in the first 2 cohorts of the multiple ascending dose phase of the trial. The results we have observed so far have been impressive and have exceeded our preestablished treatment target of 2% absolute weight loss, implying a 1.8 milligram subcutaneous dose once weekly, administered without the use of dose titration, which is the common practice with GLP-1-based agents. We achieved an absolute mean weight loss of 5.4% in just 6 weeks of treatment with ALT-801 compared to a weight gain of 0.9% in the placebo group, corresponding to a net change in weight between ALT-801 and the placebo groups of 6.3%, which was highly statistically significant. At a lower weekly subcutaneous dose of 1.2 milligrams, subjects receiving ALT-801 achieved an absolute mean weight loss of 1.8% at week 6, which was also statistically significant. Importantly, ALT-801 was well tolerated, even in the absence of dose titration with nausea experienced by only 14% and 22% of subjects at the 1.2 and 1.8 milligram doses, respectively, with all cases of nausea at the 1.8 milligram dose being mild and no reports of vomiting, diarrhea or constipation. Notably, gastrointestinal events have required other GLP-1 based candidates to dose titrate over 16 to 20 weeks to maintain adequate tolerability. Based on the relationship between weight loss and liver fat reduction observed in other GLP-1-based studies and the additive effects of glucagon on liver fat metabolism, we are optimistic that ALT-801 could be an effective therapeutic agent for NASH and that the reduction in liver fat in the planned 12-week NAFLD study can parallel the impressive weight loss results reported today. Although we believe that the 1.8 milligram dose could show an attractive combination of efficacy, safety and tolerability, we do plan to explore higher dose cohorts in the ongoing trial, and we anticipate announcing the 12-week dosing results in the third quarter of 2021. Because this was a young nondiabetic population with a mean age of only 29.8 years, the proportion of recruited subjects with MRI-PDFF greater than 10% was insufficient to perform an analysis of liver fat reduction. Consequently, we plan to conduct a 12-week Phase Ib study of subjects with NAFLD in the United States. This study will expand the enrollment criteria used in the first in-human study that's currently ongoing in Australia to include diabetic and older subjects and commence in the third quarter of 2021. In addition, we expect to initiate a 52-week biopsy-driven NASH trial early next year. Based on the highly encouraging weight loss results from this interim data, we plan to file a second IND in obesity in the third quarter of 2021 to supplement our ongoing NASH program. The filing of the previously announced IND in NASH is also planned in the third quarter of 2021. Recall the preclinical data for ALT-801 demonstrated superiority to semaglutide in overall weight loss, reduction in liver fat, NAS improvement and effects in liver fibrosis. If these results can be substantiated in the clinic, and we are now on the path to evaluating this, and that ALT-801 were to receive FDA approval, we believe that ALT-801 could become a compelling treatment option in a multibillion-dollar metabolic disease space. Turning briefly to AdCOVID. We continue to expect top line data readouts from our Phase I study in June. This will include IgA, IgG and neutralizing antibody data at all dose levels. Based on our current sample processing time estimates, we expect the data will be available around the end of the month. So I'll now turn the call back over to Vipin for his closing remarks. Vipin?

Vipin, you're on mute if you're speaking.

Thank you for that overview, Scott. We have a significant opportunity before us, and we have ambitious plans to continue clinical development to further expound upon and explore these initial observations. The metabolic space represents a substantial opportunity, and we believe that the unique attributes of ALT-801 could position it as a highly differentiated therapeutic agent in this category. We are especially pleased to have the opportunity to share this data with you, and we look forward to additional data readouts and to advancing ALT-801 in a comprehensive clinical development program in NASH and obesity. Operator, that concludes my formal remarks this morning. Could you please instruct the audience on the Q&A procedure?

[Operator Instructions] Our first question comes from the line of Yasmeen Rahimi with Piper Sandler.

Congratulations on the fantastic data. I have a number of questions for you this morning. Maybe the first question would be, can you provide a little bit color on what was the baseline BMI in these patients' weight? And then second question is, can you comment on if -- why we didn't see maybe no nausea, no vomiting even at 6 weeks. So historically, should we have picked up GI tolerability at 6 weeks? And then I have one more follow-up.

Happy to answer your questions. The average BMI in the study was in the low 30s. We'll have all of that data presented when the final readout occurs at the end of 12 weeks. But we allowed subjects in the study between the range -- BMI of 25 to 40. And the second is, you are correct, GI intolerability is not always but almost always seen in the first 2 weeks of dosing. So while we may still see adverse events in the study, the weight of adverse events should occur early on in the first couple of weeks.

Did you have any patients discontinue? And what was the size of the study of the interim analysis that you read out? If you could just provide color around the dose. How many patients who are poor arm in the treatment as well as in the placebo?

Right. So we had approximately 10 to 15 per cohort. And the randomization ratio was 4:1. And the discontinuations that occurred were -- that did occur were not directly related to drug as I know it. We need to get all of that data in and analyze it.

And then were you able to -- maybe it would be helpful to put a historical rate in context. So typically, at 6 weeks and over -- in an overweight patient population that's nondiabetic, what is the rates that we have seen for nausea, vomiting and diarrhea?

Well, there are a wide range of data, Yasmeen. It depends on how the study is conducted with titration, without titration and the dose and the like. The rates have ranged widely between 20% and 40% or higher, 45%, even approaching 50%. With the predominant average rates of nausea in the study is usually in the 30s and sometimes 40s. But again, it depends on the duration of the study.

And then one last question. I -- what is the rationale for moving the doses higher? So you're getting really phenomenal weight loss at the highest dose. If you could just provide a little bit of color of how high of a dosing range you're planning to go in future studies, and that would be helpful? And I'll jump back in the queue.

Before we start the study, we did pharmacomimetic modeling in order to estimate our dose range. And quite frankly, we were approximately right on target for that. So we think that the 1.8 milligram dose based not only in the model, the actual data is probably the dose we will have going forward, and that's why we announced this morning. However, there is an opportunity to explore the characteristics and attributes of the drug in terms of further weight loss levels at which we might have adverse events. And we think that going forward in expanding studies to large numbers of people with greater heterogeneity, it will be valuable to have this data.

Our next question coming from the line of Seamus Fernandez with Guggenheim.

Great. And congrats on the data, guys. So a couple of things, first off, just in terms of the actual dropout rate in the study. Could you just maybe clarify -- I mean, I would assume that the dropout rate was quite low, given the small number of patients and the 6-week duration. But if you could just clarify the number of dropouts. One other question -- the analysis. Was the analysis on an ITT basis, I assume that it's not on an ITT basis, but I just wanted to clarify that. And then you mentioned the 3% was achieved, I believe, in all but 1 patient in the press release at a high dose. Just hoping that in terms of the directionality, so if you look at the weight loss curve at 6 weeks, what was the frequency of measures? Do you just have measures that every 2 weeks or was it every week? And what does the curve look like at 6 weeks? Are we still seeing -- I assume we're still seeing evidence of continuing weight loss. If you were to predict using your PK analysis, what would be the hope for weight loss at 12 weeks? It looks like we're on a very impressive path here.

Right. Well, thanks, Seamus. The dropout data that I presented is all the data that I have right now. Obviously, this was conducted on an ITT basis. If there were dropouts, however, we did not impute data. So there was -- somebody dropped out. And I know that one drop had occurred because someone had to go back to work, for example. That we didn't use that weight loss there because it wouldn't make sense to impute missing data in a small study. So while there was intention to treat, the actual weight loss was based on the observed. But I don't think that the dropout data, or the dropout rates really affected the messaging that we're giving today. Regarding the weight loss curves, they were continuous. Obviously, everyone is interested in knowing how they project and these curves suggested continued weight loss. What I would emphasize is that the weight loss that is indicated at 6 weeks should project over the entire course of treatment, which in the real-life world or in clinical trials would be towards 52 weeks. And we believe that based on the 6-week data, we'll achieve levels of weight loss comparable or at least it would, if not better, than the other drug. But rather than trying to estimate a point of 12 weeks, I'd rather say that in terms of the more meaningful effect, which is the effect of a weight loss with prolonged treatment, we think it's going to be highly impactful.

Got it. And just maybe two last questions. As we think about the opportunity for a partner, Vipin, I think you have talked about this as a clear partnering opportunity with good weight loss data. Just wondering if given the robustness of these data, your bias is to partner a little bit later rather than sooner to kind of capture some of that incremental value. But obviously, these aren't particularly cheap programs to execute, so just wondering how you're thinking about the partnering opportunity and some of the timing dynamics?

Yes. Thanks, Seamus. Well, look, it's hard to speculate on that at this stage of the game, I mean, we need to continue to generate data. Of course, we will look at any partnership opportunities as they emerge. We know that there is a lot of interest in this class of compounds. Multiple companies have had such programs internally. Many of them still do and there is room for multiple products in this category. So this is -- to me, this is a mega blockbuster class. And if our data continues to look good as we do the 12-week data, we do the NAFLD study and the biopsy study next year, we think all of that is going to increase the value of this program. So I would say we are very excited about it. And we think our potential strategic partners will also be very excited about this data. So we'll keep you posted as things develop. It's hard to speculate right now. But obviously, we'll look at every opportunity to partner at the appropriate time.

Okay. And then maybe just one last question. When would you -- should we expect to see these data, the 6-week data at EASD or another obesity medical conference in the next few months, just when might we see the full data set presented?

Yes. Let's Scott answer that question. I would just say that we would probably want to wait for the entire 12-week data and really present that in a more holistic way as opposed to just 6-week data. But Scott take it away.

Yes, I would agree with that answer, Vipin. And obviously, we'll present the data. We haven't chosen the conference at this point.

Our next question comes from the line of Kelechi Chikere with Jefferies.

Congratulations on the data here. Just a couple of questions on my end. I guess first, can you speak to the [indiscernible] in the nausea rate going from the beginning of the trial to, I guess, at this particular point, 6 weeks. Did you see an improvement or a reduction in the incidence of nausea -- or any color around that would be great. And my second question is just related to, given that this patient population appears to be on the younger side, does that influence the GI tolerability or the nausea rate all in your view?

Thanks for the question. As previously discussed, the effects, the nausea been seen was early on. And we continue to get the impression from our study as with other GLP-1-based compound studies with the nausea and vomiting, if they occur, would occur early on. The nausea that we observed was predominantly early nausea, right at the beginning of dosing. In terms of the younger age of the individuals and GI tolerability, that's a really good question. I don't have the specific answer for that. I can speculate as a gastroenterologist that younger people actually have more intolerability just based on my clinical experience, but I think that's how I speculate that. I think it's an excellent question.

The next question is from the line of Liisa Bayko with Evercore.

Congratulations on the data. Just to follow-up on a couple of other questions -- I don't think were really actually answered. Discontinuations, what -- how many discontinuations were there? And how many of the 1.8 mg dose?

Liisa, I'm going to have to get back to you on that data. I don't have it in front of me right now. And I will get back to you. But I don't have that data. I don't have numbers, per se, right now. But I would like to emphasize that it was not meaningful from the overall data. I just don't want to be harping on exact numbers. But I would tell you overall that any number I provided, and I think it's quite small, it's not going to impact the messaging from the call today.

Okay. And baseline BMI, I think Yasmeen asked about that. Could you tell [indiscernible]

Yes, it's in the low 30s.

Okay. And then was there any exercise or other kind of background things? I know you have placebo that kind of helps you understand the relative, but just curious about some of the single centers we've seen in other NASH studies that like investigators really into like diet and exercise. So just wondering what other kind of treatments will go on in the background [ that's uncommon ]?

Yes, that's extremely important. So as you know, in the obesity trials that were done with semaglutide, they were done against a background of either diet and/or exercise. Diet meaning caloric restriction and/or exercise and even behavioral modification. And that these impacted the overall amount of weight loss because they showed up in the placebo groups as much as 2%. And we did not implant that in this study. So what you're seeing are raw weight loss weights without diet that is caloric restriction or exercise or other lifestyle modification.

Okay. Got it. And you said the GI tox, typically for GLP-1 occurs in the first couple of weeks. Did you see that trend here, too, that the majority of the events that you saw were early on?

Yes. That's the pattern that we observed.

Our next question is from the line of Mayank Mamtani with B. Riley.

Congrats on the strong early data on the dual agonist. So in follow-up to the prior discussions, I just wanted to also ask kind of maybe a few other non-invasives that you may have looked at? I think you provided some color on the PDFF, for instance, you just didn't have that to start within this population. Can you just maybe comment on even other biomarkers like ALT or any fibrotic non-invasives you may have looked at, including on -- at baseline? And as you're continuing to follow this at 6 weeks and 12 weeks, any color on that would be helpful.

Sure. Thanks for the question. So this was, aside from being overweight or obese, this was a healthy population. We did allow ALTs mild elevations up to twofold lower than you would typically see in the NASH trial. We'll assess that, but we don't have that data at this point. The important aspects of this study [ collectively ] are looking at things like lipid metabolism over 12 weeks, inflammatory markers. As you know, basis of overweight of these people have elevated levels of inflammatory markers at baseline to see if that would go down, measures of insulin resistance, glucose metabolism and also measures such as adiponectin are being assessed in the trial as well as markers of glucagon metabolism, these are all being assessed. But we will not have the results until we unblind the study at 12 weeks and have a full robust analysis.

Got it. And then on the higher dose that you're looking at did you -- sorry if I missed the number, like what higher doses you're going up to? And then just to clarify, you would be reporting on all these biomarkers in addition to, obviously, weight loss and GI when you come out with the 12-week data in third quarter, is that correct?

Right. That is correct.

And specific higher dose, which -- how high are you going with the [indiscernible]?

Yes, we haven't announced on that so far, but that data will be provided when we unblind the study.

Got it. And my final question maybe for Vipin. You clearly have a very well-defined NASH next steps development plan laid out, including the large but expensive 52-week biopsy study. Do you also have a similar development plan that you're willing to talk about in obesity. Just given the regulatory and commercial dynamics might be very different and maybe more attractive in obesity?

Yes. No, absolutely right, Mayank. We have been thinking about that for quite some time now as more and more GLP-1 mechanism-based compounds are showing promise in obesity. And obviously, we know of the recent approval in obesity. So that path is sort of well laid out for us. Obviously, the first step for us is to file an IND, which we are preparing for now, and we'll file that obesity IND. And that would really begin the FDA discussion and sort of the regulatory path that we would have to follow in order to pursue the obesity indication. But we agree with you, there is a very attractive opportunity in obesity and the mechanism of action has already been demonstrated as validated for obesity indication. So we will share more details as that becomes more clear the path. But we think that, that path for obesity could be even more faster than NASH, given the invasive biomarkers that at least one has to focus on, endpoints that one has to focus on at the moment that might change in the future. But we're looking at obesity indication as a very attractive opportunity.

Our next question is from the line of Jon Wolleben with JMP Securities.

Congrats on the data. I might have missed this earlier, but I'm just wondering if there's any nausea observed in the placebo arm?

No, there was no nausea, Jonathan, observed in the placebo arm.

And when we're thinking about next steps in subsequent studies, are you comfortable with the rates and the characteristics of the nausea you're seeing at the 1.8 mg dose? Or would you want to implement a titration strategy to even knock it down further. Just wondering how you're thinking about that as a differentiator against the field?

Well, the differentiator against the field is clearly the fact that we didn't have to dose titrate to get to those adverse event rates, which are impressive. These adverse events, these -- the drug was given without dose titration and the importance of dose titration to patients and not having to do it, not only in terms of inconvenience, but the ability to achieve weight loss even faster, which is extremely important for compliance and acceptability. So we really want to highlight the absence of dose titration in this study, the low adverse event rates because of this. And we are considering the possibility of dose titration. Obviously, we consider that before we started the trial. The results that we're reporting out on right now is with straight dosing. And which we believe is the dose that we have, we believe that we've captured a viable dose, which is 1.8 milligram straight dosing to take forward, going into future studies.

That's helpful. One last one for me. The release this morning mentioned expanding the enrollment criteria. And I just wanted to be clear, does that -- how are you expanding the enrollment criteria? And then does that mean that we will see liver fat data in the update in 3Q or will that not be until the next Phase Ib study, where you'll be including diabetics as well?

There's not enough patients who sign up MRI-PDFF to have a meaningful analysis of that data in the current study. So that's why we planned another study. And by including diabetics, we'll not only be including that the diabetics tend to be older. And we think that the availability in the COVID situation, which has improved greatly in the U.S., will allow us now to get these older people. So the primary expansion, Jonathan, is aged in the allowance of diabetics. And clearly, the incidence of fatty liver is much greater in older people and diabetics, and that's why we didn't have enough patients with high enough MRR-PDFFs to do an analysis in this study.

Our next question is from the line of Patrick Trucchio with H.C. Wainwright.

Congrats on the data. I just have a quick follow-up. So ALT-801 appears on track to demonstrate weight loss that's highly competitive with the competing GLP-1 agonist. And I'm wondering if it's a function of the bias towards GLP receptor affinity versus glucagon receptor agonism? Are there other aspects of the mechanism that are contributing to the apparent improved efficacy in combination with this lower burden of GI side effects that were demonstrated after 6 weeks?

Yes, Patrick, we will sort that out when we unblind this study. We're obviously looking at calorie counts. And we'll also do some markers of resting energy expenditure to allow us to look at the rate of energy burn. Based on the animal data from the studies that we've discussed previously, about 2/3 of the effects in weight loss, and this was a rodent study we did with a glucagon component. Now if that translates to human, that would mean that most of the weight loss that we're seeing in these patients is due to the glucagon effect. And that would make sense because of the low incidence of adverse events, which track more closely to the GLP-1s, that's why we're able to separate out the weight loss in the adverse events but having more of the glucagon effects. We don't have that data right now. We hope based on the analyses that I've talked about to have that data when the final results are discussed.

Yes. That's helpful. And then just in terms of the clinical development path in obesity versus NASH, I'm just wondering if it would be possible for perhaps the obesity program to advance quicker than the NASH program, just kind of given the precedent of some of these other GLP-1 agonists and obesity and then some of the other programs in NASH?

That's a hard one to call. What I would point out is that obesity trials are not driven by biopsies. The inclusion criteria were somewhat more relaxed, but also perhaps more cumbersome because of the comorbidities in the population. I think the important point to emphasize is that there's been a shift in the certainty around or the risk around the regulatory pathways in the last couple of years. When we initiated the development of ALT-801, our impression was that NASH was a more secure regulatory pathway in the obesity space was stigmatized by older compounds usually in catecholamine mechanisms with adverse events and very ineffective weight loss and many dropouts in the field despite approval. In the last 1.5 years to 2 years, Avista has really changed. We have seen the complete response letter that Intercept got, and that in the need for surrogate endpoints and the like. And in the meantime, we see the compounds in the GLP-1 space forging ahead with great weight loss data, which is going to create very interesting conversations that the agents and you saw just last week, semaglutide got approved without a complete response letter. So the regulatory space is really clearly shifting in risk -- less risk in the obesity space compared to the NASH space. I don't want to comment on the speed of the trials and the enrollment, but what I would say is that one has to look at obesity now as a very attractive space to be in, perhaps more attractive than NASH. Our strategy is to codevelop with filing INDs and both to provide 2 shots on goal. And as we've talked about repeatedly, ALT-801 is a platform and a drug. It gives us multiple multibillion dollar shots on goal.

At this time, I will turn the floor back to management for further remarks.

Well, thank you, everyone, for participating today. Have a nice day. We'll look forward to updating you further on our progress. Thank you.

Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.