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

Welcome back, everyone, to the second annual H.C. Wainwright HBV Conference. My name is Patrick Trucchio, and I'm a senior biotech analyst at H.C. Wainwright. It's my pleasure to introduce our next presenter, Scott Roberts, CSO; and Scott Harris, CMO of Altimmune, a clinical-stage biopharmaceutical company focused on developing treatments for obesity and liver disease.

So just maybe to start, if we could discuss specifically the HepTcell technology and the synthetic T cell stimulatory peptides. Is this a technology proprietary to Altimmune or was it in-licensed? As well what domains on HBV is HepTcell targeting?

Sure. Thanks, Patrick, for having us here today. I appreciate that. So HepTcell was acquired by Altimmune through the acquisition of Immune Targeting Systems. It was a U.K. company that had been using this proprietary peptide-based technology for a number of indications and including HepTcell when we acquired the company. The technology is designed to solve a number of problems that are associated with the use of peptides as immunostimulatory molecules. And that includes, first of all, having them stay put and not be degraded quickly or diffuse away from the injection site. So where the immune system and the antigen-presenting cells can't find them and begin to work on that. And so to accomplish that, we use long peptides that are derivatized with a special moiety. And that hydrophobic moiety allows the peptides following injection to basically crash out of solution and form a depot at the injection site. And so by doing that, they resist proteolysis, they stay there in the preclinical studies for a week or more. And that gives plenty of time for the antigen-presenting cells to find this depot of immunogen and respond -- and process it and respond to it. The other issue that is commonly faced with peptide-based immunotherapeutics is that you have this thing called HLA restriction. And that occurs because you may have T cells, epitopes represented on the short peptide that a subpopulation can respond to but not everybody. You may respond to that, but not myself. These are long peptides with a high density of T cell epitopes, and these are helper T cell epitopes and cytotoxic T cell epitopes. And by having a high density, we ensure that everybody can find something to latch on to something to respond to in there. And so we get very broad responses from a population level. So that's the technology. It consists of 9 peptides that represent primarily epitopes in the core and in the preliminaries region. We do have 1 region of [ S ] that's represented. But the majority of it -- and it represents almost 20% of the HBV genome with these long peptides are directed against the core and the preliminaries. And the regions that were represented in these peptides are selected so that they are highly conserved between the different genotypes. And the reason for doing that is those are often the best T cell epitopes because they're hydrophobic and they're very immunogenic. But also you get this breadth against the different genotypes. And we're able to demonstrate that against 4 of the major ones in our preclinical study. So that's kind of the technology in a nutshell.

Yes. That's a great overview. So I guess just taking a step back, with HBV, kind of what's come up repeatedly today is the idea that we may not fully understand the mechanisms by which the immune system becomes exhausted and allows the acute infection to become chronic. So I'm wondering just your level of confidence that the Altimmune approach is the right approach. And just in terms of kind of our understanding around the immune function with HBV with chronic infection.

Sure. It's certainly a difficult nut to crack, right? I mean, first of all, you're working with the liver, which is an immunotolerized organ to begin with. And then you have these saturating levels of surface antigen that tend to tolerize the T cells, so they're no longer able to see or respond to the infection. And that seems to broaden beyond the surface antigen involved to other proteins presumably through some sort of bystander effect. So it's a tough nut. I think that the approach has worked in a number of different indications preclinically and clinically. And so we were confident that we would have responses. And in our Phase I study, and Scott will certainly talk about this in a little bit, we saw a very pronounced T cell responses. We were getting over 5,000 -- between 5,000 and 6,000 spots per million cells of T cell responses from low levels prior to therapy. So not only does the design and the science makes sense, but now we've got the preclinic -- or the clinical data, I should say, that shows we are able to wake up these dormant T cells and have nice inductions in the level of T cell responsiveness by ELISpot.

Yes. So do you have an idea, or do we know which patients would therapeutic vaccine be most likely to demonstrate efficacy signal? Be it e antigen positive, negative, s antigen above or below certain thresholds or NUC experience, NUC, i.e., et cetera?

Sure. And I think that this will ring true with other talks that have gone on today. Everybody kind of wants lower -- low surface antigens like in cancer, everybody want smaller tumor sort of thing. But there's science behind that. And it's because of this mass effect of the surface antigen on the suppression of the immune system. And so certainly, subjects that have lower levels of surface antigen and by extrapolation, more competent immune responses to HBV probably represent the best patients to go after, certainly in early clinical trials where you want to see if this thing is really working, is generating responses. And so in the Phase I, we used a NUC-treated HBV-negative patient population, their surface antigens were in the low thousands. And we've got nice T cell responses there. In the upcoming study that Scott will talk about, we're looking at a population that has even lower surface antigen levels, and we're doing that for a couple of reasons having to do with that patient that population exists and they're in need of treatment. And -- but also it's really a surrogate for what a subject may present after, for example, direct antiviral therapy. And so again, all these approaches aimed at lowering surface antigen, getting the immune system kickstarted and then you come in with HepTcell and really rev it up.

Yes. Interesting. Okay. So why was immune complex or IC31 chosen as the adjuvant? What's unique or helpful about TLR9 adjuvant or some other TLR?

Sure. So with the adjuvant, we're trying to solve a couple of different problems in parallel. We wanted strong immune stimulation. But we also wanted an adjuvant that would form a depot and stay put with the HepTcell which is a depot-forming antigen. And so to solve both those problems, IC31 really seemed like the best -- had the strongest activity as an adjuvant of the ones that we screened. And it also has the nice attribute of forming a depot on -- administration also. So it's a DNA complex with the basic protein, so kind of also kind of sits there. So the combination of the adjuvant and the antigen together at depot, lasting for an extended period of time just made a lot of sense to us.

Yes. Yes. It makes sense. So can you remind us how the therapeutic vaccines being delivered and to which tissues are being delivered to?

Sure. This is a simple intramuscular administration that goes into the arm, and that's how we've been doing it.

Yes. So in a Phase III study that I guess was conducted earlier in this decade with the peptide-based vaccine, this is specifically HBs antigen, HBIG immunogenics complex therapeutic vaccine candidate with a YIC adjuvant. It was demonstrated with overstimulation, but the adjuvant did not increase, but rather decrease treatment efficacy due to immune fatigue. So -- and this was a study a while back now, almost 10 years ago.

Yes.

So other therapeutic vaccines have demonstrated efficacy on reducing HBV DNA and increasing anti-HBs though minimal impact on surface antigen. So I'm wondering what learnings from that 2013 study or others has ultimately taken into account with the therapeutic vaccine program. And what gives you confidence in a successful outcome this time.

Sure. So the 2013 paper with the YIC, it's really a different beast. It's not so much a peptide. Those recombinant surface antigen is made in yeast. They complexed it with immunoglobin specific for that antigen. Then administer that and hope that, that would be taken up by the adjuvants. So it's different in that respect. They did see a difference between their Phase II, which was like 6 injections versus the 12 over a year. And they think that, that was about overexpression. But the fundamental difference with that approach versus ours is that they were using alum as the adjuvant. Alum is a classic Th2-stimulating adjuvant. And so it's not really what you want. I mean, for a cytotoxic T cell response, you want a Th1 response.

Right.

So it very well could have been the fact that they had all this extra alum and extra 6 doses of alum in there, and that certainly didn't help matters. And on top of that, again, they're working with the surface antigen, which is already overexpressed in these subjects. And so adding to that probably wasn't the best approach. And again, that's why we're focused primarily on the core and polymerase with ours.

Yes. Yes. That makes sense. Okay. So then you had the Phase Ib trial. This was conducted in the U.K. and Korea. HBe antigen-negative patients well controlled on NUCs. Is there anything else that was notable about the baseline characteristics in the study? And can you discuss the outcomes from the study, transaminase levels, interferon gamma, et cetera, or quantitative HB surface antigen. Anything that was notable from the trial, that would be helpful.

Right. So Patrick, this was a Phase I study and its primary end points for safety. The secondary end point was immunogenicity, and it was not expected to be an HBsAG response. And the reason was this was a chronically immunotolerant population that was treated with NUCs, that was because you had to have safety. And it was designed that the subjects wouldn't have a flare. So being that they had log 3 hepatitis B surface antigen, as Scott had just described, these subjects were immune tolerant and not going to respond with the clearance of the surface antigen or flares. And in fact, the study was designed so that they wouldn't have a flare, and that will be associated typically with the reduction of the surface antigen. So we did not see a change in surface antigen, but we did not design the study to get that. But what we did see was very, very potent ELISpot responses, interferon gamma, sensitized by these peptides and their epitopes. And consequently, it suggested that we are waking up the immune system. That was only a 3-month study. And now we have moved in Phase II to a population we think we can get a response with the same amount of compound.

Yes. That was the next question I had was just what's the status of the Phase II trial?

Right. So this -- the hypothesis -- and it's been demonstrated in a variety of studies, especially interferon studies is that when hepatitis B surface antigen hits the log 2 that is 100 or less, the immune system starts waking up. And this would be a prime population in order to test the ability of a HepTcell to reduce or even eliminate the surface antigen. These are subjects who have never been treated before or what we call inactive hepa -- chronic hepatitis B. And they've got down there by gradually increasing their native immune responses and T cell responses to the hepatitis B virus. So consequently, they're just starting to wake up the responses, but not enough to actually clear the virus. So the primary of this end point of this study is a 1-log reduction in surface antigen, that would be appropriate for this stage of development. One of the key secondary end points will be actually functional cure, which would be the elimination of the surface antigen which would be the end point for future studies. So it's a monotherapy trial, but our goal is eventually to get to combination therapies with other agents that might start with patients who are more active, higher viral DNA, higher surface antigen, bringing those down with the direct acting agent and then eliminate the virus with the immunotherapeutic.

So in the Phase II trial, can you remind us what -- I guess, what level of surface antigen would -- are patients expected to have that baseline?

Right. So they're expected not to see 100 and we set a lower limit of 10 in order to be able to see a 1-log response. Also, subjects they are too close down to 0 on their surface antigen that tend to have higher placebo responses in terms of clearing the surface antigen. So they're between 1 log and 2 log or between 10 and 100 in the surface antigen.

So the primary end point is the 1-log reduction in surface antigen. Would you also be looking at kind of levels of surface antigen clearance as a secondary or...

Absolutely. Functional cure is actually what's a greater interest to us, but that's going to require a much larger study. And for this phase of development as an indicator or a signal of what's going on, a 1-log reduction would be quite appropriate.

So to achieve the primary end point, what proportion of patients have to achieve that 1-log reduction and -- yes.

So in this population, the 1-log reduction rate would probably be about in that 5% to 10% range, and we're probably about 30% getting that with the active treatment.

And I'm sorry, where is the study going to be enrolled?

So we're enrolling the study in the United States and Canada and 3 European countries.

Okay. And can you discuss at all, I guess, the pace of enrollment. Has it been impacted by the COVID pandemic? Or how does that -- how should we think about that?

Universally, all trials have been impacted. On the other hand, we're seeing signs of enrollment picking up very quickly. We expect to complete enrollment and have the data readout in the second half of next year. The delay is that there's 6 months of treatment and also the necessary follow-up period that comes after the last patient's enrolled. And that's the readout in the second half of next year.

Yes. That makes sense. So then what antiviral mechanisms -- I mean you mentioned that it would make sense, of course, to sequence with the antiviral -- Or what -- would you treat them at the same time, you treat the patients with the antiviral with the HepTcell at the same time or do sequence? And what are the novel mechanisms you've seen -- we've heard about a lot of the antiviral mechanisms today. Were there any that kind of stood out to you that would be interesting to combine with HepTcell?

Right. So as you know, what I just described is a monotherapy trial, we think it stands on its own. And quite frankly, for the patients, the chronic hepatitis B are actually inactive carriers who don't require treatment. So it's actually a larger population, although perhaps, Patrick, a population and lesser medical need because we currently don't treat them now. But don't forget that these subjects are the lifelong risk of hepatocellular carcinoma, even without treatment, any smaller but still a finite risk of cirrhosis and they also remain infectious to family members. But we think that the greatest unmet need, and I think the pharma community sees this as well to take patients who should typically get nucleosides but not achieve functional cure and give them a more potent agent. But there's more potent agents and -- that start with small inhibitory RNAs or oligonucleotides, things that drive down the surface antigen. You also have the capsid assembly modulators, which have greater effects on DNA. We think that mechanistically, in order to get a potent immune response, we got to get the surface antigen down. So if a subject starts at log 4 or even log 5 in the small inhibitory RNA or the other direct acting agent, like an oligonucleotide gets us down to 10 to the 2, that's enough for our agent in combination with that therapeutic to have an effect, the former knocking down the antigen. And then we come in and knock out the actual virus by the potency of cell response that's been associated with clearance. So to answer your question, we see this as probably being sequential, that are the combinations could be pursued.

So assuming that we see the outcome that we're expecting, the proportion of patients that achieved the 1-log reduction in the Phase II trial, it meets your expectations. What's the next step for the program?

Well, we have 2 options. One is that we continue to do a Phase III with monotherapy with this agent, recognizing that it's the largest hepatitis B population. And there is an unmet need for these people to get treatment. And also in combination with our combination therapy with a partner probably in the small inhibitory RNA or oligonucleotide space. It's a 1-2 punch to first get the energy levels down and then eliminate the virus. So there could be 2 swim lanes here, one combination therapy and the other being monotherapy for that select population.

Right. Perfect. Okay. Well, I think that brings us pretty much at the end of our time. Really interesting update from you. And we're looking forward to the data update next year. So thanks so much to Scott and Scott for providing us the overview. And thanks to Altimmune for attending our HBV conference, and thank you for everyone for attending the conference, and have a great rest of your day.

Thank you.

Thanks, Patrick. All right. Take care.