ALX Oncology Holdings Inc. (ALXO) Earnings Call Transcript & Summary

Hello, everybody. Welcome to another great session at the Jefferies Virtual London Global Healthcare Conference. I'm here with ALX Oncology. With us today, we have the CEO, Jaume Pons, with us here. We also have the Chief Medical Officer, Sophia Randolph. It's great to have you guys with us.

Hello. Hi.

Thank you.

Before we get into all the excellent data that was just presented at SITC, we won't do that just yet. I just wanted to maybe turn it over to you guys and ask you a broad question. The CD47 space, which you guys are involved in, has gotten a lot of attention recently. And there's been a lot of deals in that space. And I think people are starting to catch on. One of the common things I hear is that it's just crowded or there's just a lot of players. So maybe you could talk about why you think your program is differentiated, what you have there, and why it's not just another CD47 blocker. Maybe just start with that. What makes you different than everybody else?

Yes. So I think that ALX148 is the only CD47 blocker. That uses the pathway, we use CD47 purely as a checkpoint modulator, and is not trying to target cancer cells with an active Fc. So CD47 would have good tumor [ specific titration ]. ALX148 is very high affinity blocker and the inactive Fc prevents of target -- on target of tissue side effects. We designed the molecule to be use in combination specifically, to be combined with a wide array of anti-cancer drugs. Magrolimab that was used, for example, was designed to be a single agent. However, the only setting where magrolimab has shown significant activity has been in the combination setting with azacitidine or with rituximab. So in a way, I think that everybody is trying to make molecules that show single-agent activity. But at the end, they are going in the combination setting. I think in the combination setting, we're going to be superior. And I think the data of magrolimab would fail in solid tumors where we have very compelling data -- I'm sorry, tumor shows that.

Yes. And we'll get into that because I think that's the heart of what people are starting to catch on with. Do you believe that -- or I guess, what would you say to others who've started to put up some data in combinations where they claim they don't have anemia or they claim -- have differentiation? Because a lot of people are trying to say that now. So I mean I-Mab might be one of those. And to their credit, did a deal with AbbVie. Trillium is trying to say they don't have it. Is there any 1 or 2 things that we should pay attention to that would suggest that other than it's just early for I-Mab? But they did put up data and people are starting to pay attention.

Yes. So what I would say is, again, we are a little bit in the same direction. I think that single-agent activity and combination activity do not correlate. So you are actually using the mechanism in 2 different ways. In the case of single-agent activity, you are treating CD47 as a tumor-associated antigen, targeting cancer cells directly with an Fc. As a combination, you're blocking the checkpoint and then adding another molecule that is going to be enhanced by the inhibition of that checkpoint. The data from magrolimab in solid tumors where they had 2 PRs in ovarian as a single agent, and then they combine with avelumab and they had 0. So actually, the efficacy there was worse than magrolimab alone and worse than avelumab alone. That data, for me, is very telling that even in the clinical setting, single-agent activity does not correlate as good combination activity.

That's actually really important. So I will take that home, I mean, because that's really important. So if you have Fc activity, it's designed to be -- or conceptually designed to be a monotherapy drug with Fc activity. And they just believe they're dialing out the anemia. Right? Whether that's fine into different epitope or prime dosing or whatever that may be, they're just trying to go around that. But your point is, when you go into combination like with I-Mab or others, there would either be competition, right, for that activity, right? [indiscernible] go into all that science here, but if you try to combine I-Mab with another Fc-activated antibody, would that not work?

Yes. So especially in the solid tumor, is what we saw with magrolimab, and in preclinical models, that is what we see as well. So in the case of I-Mab, they will have to show if they have what they've done in activity in the combination setting in solid tumors. The point is that we already have very compelling efficacy data in combination in solid tumors.

Right. And so if you were to -- and I just -- I want to emphasize this point because I do think it's important, like if you were to combine them with another Fc-active antibody, is that right? Maybe Sofia's clinical background -- that wouldn't work as optimally if you did not have Fc activity with your CD47, is that...

That is what our animal models show and [indiscernible] preclinical models say, that not having [indiscernible] in Fc and actually, at the same time, having a really high affinity. So our molecule is very high affinity. At the same time, the smaller molecular weight of ALX148 that may enable better tumor penetration. Not having Fc. I think everything together and the ability to dose very high, right, to push the molecule into the tumor microenvironment. So I think all these characteristics together give us IHC -- sorry, solid tumors setting in combination with our drugs.

Great. Okay. So that's a good segue then. So we've talked about the differentiation. I think some of that is starting to play out, both with efficacy and dosing up and up. And so a lot of this was talked about this week at SITC. So maybe we could briefly summarize what is so compelling in gastric and what was so compelling in head and neck. Let's take those 2 separately because that's what was presented here, and people are obviously receiving it well. Necessarily do that based on the stock price, but obviously, that was well received. So do you want to summarize that?

Yes. Sophia, please?

Sure. Yes. So the data that we presented recently at SITC, just to underscore, was extremely significant and very exciting. And just as a take home message, I think to date, we are the only CD47 agent that showed this type of significant activity in the solid tumor setting and in a tolerable way. So it is exciting. So just to go through the data. So the first tumor histology that I'll summarize is the gastric cancer data.

And if you -- I think you can. But if you want to click Share Screen, you can. If you don't, that's fine, too, but if it happens to be open, it's okay to share. I think you can share if I think of it.

Okay. That's okay. I can summarize it verbally. And the poster is on our website, for those who want to download it later. But essentially, for the gastric carcinoma population, there's 2 groups that we looked at. The more recent data is coming from a second line HER2-positive gastric population, all except one who had previously progressed upon prior trastuzumab, which is their standard of care in the first-line setting. When we looked at our drug in combination with the current standard of care, which is ramucirumab-paclitaxel, looked at our drug plus trastuzumab on top of that standard of care. What we saw was, overall, a 64.3% objective response rate that compares well to ram-pac, which is through RAINBOW study, has a 28% overall response rate. So this is really exciting. I mean this is dramatically different. It's in 14 patients, and we continue to enroll into this cohort. This is on top of a second pot of data that we presented the update for at SITC. And this was also in the second line HER2-positive space for gastric. But here, we were looking just at the doublet, looking at ALX plus trastuzumab. In this population, we already know from the prospective randomized studies, notably the TACT trial, that in the second-line setting, after having failed prior trastuzumab, tras after tras, so getting tras again, adds nothing to backbone chemotherapy. So you could look at tras activity as less than 5% in that second-line tras after tras setting. In our population, ALX plus trastuzumab, whereas Jaume described, ALX is not designed to have monotherapy activity. And tras, we know, has no activity in tras after tras patients. Here, we're seeing a 21% objective response rate. And that -- and with good duration, 8.7 months of median PFS of 2, median OS of 8, these are numbers that you would see with paclitaxel single agent alone. Yet this is a chemo-free regimen. So with these 2 agents showing this type of activity together, which is consistent with ALX's mechanism of action in combination with the monoclonal antibody, we then take that active doublet and add it on to current standard of care ram-pac, which I just described. So I think together, these 2 pots of data for gastric, really underscore that as designed by dialing out to safety and with the other attributes to the molecule that Jaume already discussed with the inactive Fc, we're seeing quite significant activity in this population.

So that's right. And this was summarized, and I pulled it up here now. Slide 23 of the deck that you presented here. And you basically showed on tras and chemo and ramucirumab, 64%. You would normally expect 30-something percent with that type of result.

More like 28% even for Rainbow...

28%.

Yes.

28%.

28% for ram-pac. They had already failed trastuzumab. So adding tras again wouldn't have done anything. And you basically more than double the response rate. And even more likely because, again, you weren't getting tumor [indiscernible] -- just in trastuzumab/ALX combo, where you've already failed tras, you have a 21% response rate. And there's lots of evidence saying, you wouldn't have got anything there with tras alone. So that's not tras working there?

Yes.

Right. Right.

So given that -- and I asked this on the call, PD-1 is coming through here. PD-1 looks very good, but it's immediately going to go to the first-line with trastuzumab, I assume, right? So what are you -- how are you thinking about the next steps, given clear activity here?

So for us in terms of gastric, we are in the process of planning a study that should open by mid-year looking at the same population. So second line gastric, our drug with the drugs that we've just mentioned, trastuzumab, ramucirumab and paclitaxel. The first-line setting, as you've correctly described, there is really interesting data from the randomized or from the Phase II study coming out of Sloan Kettering looking at checkpoint inhibitor notably Keytruda plus tras plus [indiscernible] which is the current regulatory standard of care. And that is now in Phase III study and is going concurrently. So at some point, these patients will progress into the second-line setting. And as we've described, tras after tras, with our combination, we still have activity. We actually have had -- even within our group of patients, one of the patients who had confirmed PR actually had progressed on that regimen of tras -- tras checkpoint chemo in the first-line setting still had a confirmed response with us in the second line. So we do think that we have a space in that second-line setting. Given our data in head and neck, as we'll talk about a little bit after this, and the synergies that we're seeing with pembrolizumab, it is conceivable that we could move up in line of therapy. Certainly, we have the safety profile to allow for combining with these various agents. But it will depend upon what the regulatory standard of care ultimately is in the first line.

Right, right, right. Okay. So right now, you're going to start a second line study, replicating that again, trastuzumab, CYRAMZA, paclitaxel versus that with ALX148, and we want to show higher response rates. If we doubled that or so, you should be able to show -- it's a Phase II, it's not pivotal, but I might even ask that, if that could be accelerated approval, but PFS and overall response rate to support a Phase III.

Yes.

Yes. And it is a program for which we already have fast track designation from the U.S. FDA.

Kind of interesting now. I was thinking that given that data just with trastuzumab/ALX148, you could run a third line thing and just come back to these people who failed all of that CYRAMZA stuff because there is nothing, right, in third-line, that you could give it to them again with this. And you probably will get response rates in the third line after failing.

We do have many -- actually, particularly in that first group that I mentioned, the doublet earlier population of GC patients. We do have several patients who are third line or greater who are still responding to our drug. And it does open up possibilities for combining with other second-generation anti HER2-positive therapies such as in HER2 or other ADC-type compounds that are moving forward in the later line settings.

That's right. So let me think about that, because now that reminds me, I think [indiscernible] in HER2, is that right, is about to get approval in gastric?

They had a positive readout on their Phase III. So...

Yes. You see...

How do you find '21? Does the science make sense that if you adapt this standard of care in third line, you could take it back plus yours and beat that?

Absolutely. Yes.

That would work?

Yes, it should work. So basically, HER2 has usually one Fc, so would work on that. And we have already data that we can make chemotherapy better, right? So it makes sense mechanistically to combine with an ADC.

So great. So a lot of different things to interrogate there, but we'll get that Phase II underway to confirm that. What about head and neck? So this is, just for investors thinking about this, clearly there's proof-of-concept now, but in terms of market opportunity, definitely bigger than gastric. What did you see in the head and neck? And why is that compelling? And I acknowledge that this is also getting a little crowded, too. So this is really important to figure out the next steps.

So for head and neck data that we presented at SITC again, 2 groups of data, both showing dramatic responses. In the more recent group that we presented, we looked in the first-line head and neck population, so checkpoint-naive. Looked at our drug on top of the current regulatory standard of care, which is pembrolizumab, 5FU plus a platinum. Here, we had enrolled 4 patients. So it's early data. But out of those first 4 patients, 3 had objective response rates, including 1 with a complete response. So this is early data but extremely encouraging. And when you add it on top of our larger pot of data where we looked at in the second-line setting, and I'm going to hone in, in particular, on the checkpoint-naive patients in the second-line setting who received ALX plus pembrolizumab, there -- in that population, we had a 40%, 4-0, objective response rate that compares well with Keynote-040, where you would anticipate a 15%, 1-5, objective response rate in those checkpoint-naive patients. Certainly, checkpoint-naive patients in the second-line setting, they are becoming fewer and fewer because pembro has since been approved in the first-line setting. So our development plan within head and neck is to follow those checkpoint-naive patients into the first-line setting. And this preliminary data that we're seeing here is very encouraging. And we plan to start 2 Phase II studies, ALX plus pembro, ALX plus pembro chemo in the first-line setting in the head and neck, and those will start in the first half of next year.

Would some people get Keytruda in the first-line without getting chemo?

Yes. So it will be 2 separate Phase II studies. One study will just look at the doublet, and they're both randomized. So ALX plus pembro versus pembro. And then the second separate Phase II study will look at ALX plus pembro chemo versus pembro chemo.

Okay. So those were 2 studies there because there's 2 different options. You're saying some people don't get chemo. And so do you want...

Yes. It depends on the status of their disease, the aggressiveness of the disease, their CPS scores, PD-L1 scores. So...

Okay. That's interesting. Okay. Now let me ask an interesting question. There is, I guess, a lot of room for you to improve there, and this is showing good proof-of-concept with pembro. Are there other agents in a second-line setting as well that you could effectively improve? I don't know every second and third-line agent head and neck, is there another combination that you could look at in second-line since again, pembro is moving upstream. So in second line, what would you do there? Is it just even matter?

So for head an and neck, we would -- development would be to move as early in line as possible. So for head and neck, the priority would be first-line head and neck. But to your point, as we think about what are some of the other combinations and things that we can do, and it gets more into the development strategy of the drug, it -- for us, it's almost having to the challenges to be disciplined, right? Because there's so many different combinations we can do.