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

Good morning, and thank you, everyone, for joining us today. I'm Kat Lange, a member of the JPMorgan Health Care Investment Banking team. As a quick reminder, after the presentation ends, we will do a quick Q&A session. So if you would like to submit a question, please hit the blue button titled ask a question. And with that, I would like to hand it over to Jaume Pons, President and CEO of ALX Oncology.

Yes. Thank you, Kat. Good morning. I really appreciate the opportunity to share our data with you today. After the customary disclaimers in Page #2, let's move to Slide #3. When I started the company in 2015, I was very fortunate to be able to bring with me my dream team of professionals. Today, I want to introduce very specially, Dr. Sophia Randolph, our Chief Medical Officer, and she was a global clinical franchise lead for IBRANCE, the CDK inhibitor of Pfizer, that she developed all the way from first-in-human to global registration. This is very relevant because IBRANCE was developed as a combination agent and ALX148, our lead clinical candidate has been designed and is being developed to be used in combination. On Slide #4. ALX Oncology is a clinical stage immuno-oncology company that is focused in the CD47 pathway. Our lead product candidate, ALX148, is a CD47 blocker that is designed to be used in combination. This design have shown in the clinic a very good steady profile that enables high dosing and this higher dosing has in the clinic shown greater efficacy. At this moment, we have proof of principle in both hematological and solid tumors and our initial focus is on solid tumors, MDS and AML. On Slide #5, you can see that CD47 is highly suppressing cancer cells but also suppressing normal cells. In a way CD47 could be used as a tumor-associated antigen. So we could make antibodies that directly target CD47 expression cells and destroy them directly. The problem there is therapeutic window. What makes CD47 very exciting to me, is a second mechanism of CD47. CD47 is highly suppressed in cancer cells and interact with SIRPa, a receptor of macrophages and other myeloid cells and provides an inhibitory signal that we call don't eat me signal. Then in the presence of other drugs like anticancer antibodies that provide a positive signal, this don't eat me signal presents the full activity of other drugs. What's important here is that CD47 blockade by itself is not enough to activate macrophages. The eat me signal provided by another drug is required for macrophage activation. In the Slide #6, you can see that there are many companies that has decided to design molecules with single-agent activity against CD47 and design molecules that do both things. That block CD47 and at the same time, provide the required positive signal, for example, antibodies with inactive Fc. With this approach, it is possible to get some responses at low doses using CD47 as a tumor-associated antigen. However, at the same time, these approaches can destroy red blood cells, neutrophils, platelets, et cetera, that also suppress CD47. That produces a dosing limitation and in the combination setting, these kind of molecules cannot dose high enough to obtain 100% receptor occupancy of the CD47 pathway in the tumor, and they cannot maximize the activity of the combination agent. What we decided to do in Slide #7, is to design a molecule that only blocks CD47 and does not provide the positive signal. By doing that, we expect normal cells or red blood cells are not destroyed and then when we combine that with the anti-cancer agent that specifically target cancer cells, we can modulate the pathway, blocking it completely 100% inside the tumor microenvironment and unleashing the full potency of the combination drug. In Slide #8, you have the design of the ALX148. ALX148 comprises with what we call the high-affinity SIRPa that we licensed from Stanford. This is the extra [indiscernible] domain of SIRPa and the receptor of CD47 that has been affinity mature to bind CD47 with thicker molar affinity. Regular [indiscernible] SIRPa by CD47 with micromolar affinity. So we have thousands of fall, higher potency in terms of binding CD47 than natural world type SIRPa. We've used that to Fc domain that provided the full PK of an antibody, but it's inactivated in terms of Fc gamma receptor binding. So it's not able to provide the positive signal. Also so this molecule -- is have the molecular weight of an antibody. So we have twice the number of binding sites for CD47 compared with antibody. Our 10 mgs per kg would be equivalent to 20 mgs per kg of an antibody, and also the smaller size allows better tumor penetration. What is very unique to ALX148, it is cross-reactive to human monkey and mouse. So we can run mouse models where we can assess both the safety and efficacy at the same time. So this molecule is suppressed in a system exactly the same as an antibody. We have very high yields of 4.5 grams per liter. And it's a very stable molecule. At this point, we have 3 years of stability, 4 degrees selective formulation. Using our ability to do mouse models with cross-reactivity to the mouse cells, we've been able to show the safety of ALX148. In Slide #9, we are comparing ALX377, it is the same binding domain of ALX148, but with active Fc versus ALX148 with an inactive Fc. You can see that single dose of ALX377 reduces red blood cells, platelets and white blood cells, while ALX148 does not reduce any of the cell types. This experiment was a conclusive proof to us that the cytopenia seen by other anti-CD47 molecules were directly related to the use of an active Fc and the inactive Fc that we use is the core determinant of our safety profile. Also because we have cross-reactivity mouse modeled, we can both do genograph models and syngeneic models where the mouse has the full immune system. In the left, you can see the enhancement of activity of rituximab in a genograph model and in the right, you can see the enhancement of the activity of atezolizumab in the syngeneic model as we have data for PD-1 antibodies. So this mouse cross-reactivity allows a much better translation from the clinical models to the clinical setting. From there, we move to primate studies. In the GOP toxicology non-human primate studies, we dose up to 100 mgs per kg. We did not reach maximum tolerated dose, and we did not see observable adverse events. In the single agent part of our Phase I in humans, we did not reach maximum tolerated dose. We were now up to 30 mgs per kg per week. And out of 28 patients, we had 2 DLTs, one neutropenia and one to [indiscernible]. We presented it ASCO in 2018, and you can download the poster from our website. In the combination setting, we went up to 15 mg per kg weekly, and that is our recommended Phase II dosing in terms of exposure, which means that because we can dose higher because we have not reached maximum tolerated dose, we can dose higher in terms of CMAX to be able to extend the dosing interval. For example, if we combine with an agent that is dosed weekly, we will use 15 mg per kg weekly. If we dose with an agent that is dosed every other week, we'll do 30 mg per kg every other week. With Keytruda, that is dosed every 3 weeks, we do 45 every 3 weeks with azacitidine that is dosed monthly. We're planning to do 60 mg per kg every 4 weeks. By doing that, we increase the convenience for the patients. The PK of ALX148 is a typical PK of a molecule that have a sync. And this is the same PK that is seen for all the CD47 molecules that has shown PK in the clinic so far. That is shown by here in the left that you can see that low doses, for example, 0.3 and 1 mg per kg the half-life of the molecule is very short. And then at 3 years longer, doses of 3 mg per kg or higher is linear with a half-life of 30 days. That's a typical proof of a molecule with a sync. Then on the right, you have the [indiscernible] receptor occupancy. 1 mg per kg and 3 mg per kg do have 100% of receptor occupancy, but in a very short time. They don't cover the full dosing interval. Doses of 3 mg per kg or higher, so 3, 10 and 30 mg per kg, we have full receptor occupancy, 100% receptor occupancy across the dosing interval. For this reason, we started our Phase I studies at 10 mg -- combination studies at 10 mg per kg. On Slide 13 is a snapshot of our pipeline of clinical trials. We are developing ALX148 both in solid tumors and hematological malignancies, and we have preliminary positive data in all these indications. So for example, in head and neck, we have positive data in combination with Keytruda and in combination with Keytruda plus 5FU plus platinum. And we have fast track designation for this indication. In second-line, a gastric cancer HER2 positive, that has Herceptin in the first-line. We have positive data in combination with Herceptin and in combination with Herceptin plus Cyramza plus paclitaxel, and we also have fast track designation for this indication. These 2 studies will be moving into Phase II this year. Based on our positive data with Herceptin in gastric cancer, we have established a collaboration with Zymeworks to combine ALX148 with ZW25 in breast cancer, and this study we'll start this year. In the hematological setting, initially, we tested ALX148 in the individual patients that have failed rituximab -- in combination with rituximab. This study was important to us in terms of benchmark our activity -- with activity of magrolimab and we got a very similar data, but which makes better safety profile. And also in this study, we proved that there is a dose response so that dosing higher is better. And for this study, we've got the Phase II recommended dose. However, NHL is a complicated path forward and it's not part of our core development plan. And from there, based on the benchmark from the NHL study with magrolimab, we're moving into MDS and AML studies, and the MDS study has already started. In Slide #14. In terms of safety, in the combination setting, you can see the drug is very well tolerated. Here, you have data in combination with anti-cancer antibodies like rituximab or Herceptin, multiagent chemotherapy and also checkpoint modulators. And you can see that the most frequent side effect is fatigue, followed by rash. And you can see that the hematological side effects are single-digit percent, and we have formally demonstrated that cytopenias do not correlate with exposure, and you can also download this poster from our website. This safety profile really allows us to combine ALX148 with a broad combination of agents. In Slide 15, you have a snapshot of the clinical data so far in different indications. Starting from the left, in NHL, second-line, patients that have failed rituximab once or more earlier, we're combining ALX148 plus rituximab, and we have a 70% response rate at 15 mg per kg. That compares very well to the 48% response rate of magrolimab in the similar indication and similar patients. In second-line head and neck patients, there were checkpoints. So never treated before with Keytruda. ALX148 plus Keytruda shows a 40% response rate, that compares very well to the 15% benchmark of keynote 48 and also with a doubling of the PFS and OS. In the first-line, head and neck small cell carcinoma in combination with ALX148, Keytruda, 5FU, platinum this is a small study that is still enrolling, will have a 75% response rate that compares very well with a benchmark of 36% of keynote 40. In gastric cancer, second-line, HER2-positive gastric cancer patients that have failed already Herceptin in the first-line, it's been established that Herceptin in the second-line does not add anything. So the expected response rate is close to 0. If we add ALX148 to Herceptin, the second-line gastric cancer, we get a 21% response rate. And then you will get this active doublet on total standard of care for gastric cancer that is Cyramza plus paclitaxel, we get a 64% response rate that compares very well with a benchmark of 28% from the clinical trial table. So if we look all this data together, we are very confident that the activity of ALX148 is often enhancing maybe [indiscernible] of therapies, for example, chemotherapy, anti-cancer antibodies and also checkpoint moderators. Moving to Slide 16. The mechanism of action of ALX148 in combination with rituximab, CD20 antibody. Rituximab bind CD21 cancer cells, interact with Fc gamma receptor providing the required positive signal and then ALX148 blocks CD47 SIRPa interaction, unleashing the full potency of rituximab interaction with Fc gamma receptors. When we design this study as a kind of a stepping stone to be able to compare our activity with magrolimab's data that at that point was ahead of us in hematological malignancies. They had a 48% response rate in the Phase I, when we're dosing a second -- they were dosing 30 mg per kg weekly. At 10 mg per kg, we got 40.9% that compares very well with the initial data of magrolimab. However, later in the Phase II magrolimab reduced dosing to 30 mg per kg every other week and the response rate dropped from 48% to 29%. Then when we saw that we decided to increase the dosing from 10 mg per kg to 50 mg per kg. And what we saw was a statistically significant increases of response rate from 40.9% to 70%. So this is statistically significant dose response is to me a very good proof of the activity of ALX148. And also opens to the hypothesis that it is required to have a lot of free drug in the periphery to be able to push it into the tumor microenvironment. In both cases, 10 mg per kg and 50 mg per kg, we do have 100% receptor occupancy in the periphery. But even with that, 50 mg per kg is more efficacious than 10 mg per kg. So 50 mg per kg is from now on our recommended Phase II exposure, as I mentioned before. In Slide 18, you see the spider plots and waterfall plots for these 2 trials at 10 and 50 mg per kg. You can see that patients stay in trial for a very long time. The responses are very durable and tend to get deeper over time. And also, you can see that we have CRs complete responses both in aggressive and indolent lymphomas. And Slide 19 is the mechanism of action of ALX148 plus Herceptin. Here Herceptin binds HER2 cancer cells and provides the required positive signal by interacting with Fc gamma receptors in the macrophage and then ALX148 unleashes a full activity by blocking CD47 SIRPa interaction. In Slide #20, you can see data in the second-line HER2-positive gastric cancer for patients that had already failed Herceptin in the first-line. Here, as I tell you before, the TICT study has shown that Herceptin adds nothing to [indiscernible] in the second-line. So the expected response rate of Herceptin is very low or close to 0. So in combination with ALX148, we see a 21% response rate and a very long durational response. If we now get this active droplet, and we move into what is standard of care that for second-line HER2-positive gastric cancer after failure of Herceptin is [indiscernible], we see that we had a 64% response rate that compares very well to the benchmark of rainbow 28% response rate. In addition, here, in Slide 21, you can see that only one patient has tumor enlargement. All the other patients had tumor reductions. And these blue patients that are stable disease, and that is still in a study, they may transform into PR in the future as we have seen very often, that responses tend to deepen over time. With this positive data, we are moving into a Phase II study randomize to assess efficacy of ALX148 plus Herceptin plus Cyramza plus Paclitaxel compared with the standard of care. In Slide #23, you see the mechanism of fashion in combination with Keytruda. This is slightly different, the SIRPa of expression is in dendritic cells and the inhibition is CD47 with cancer cells, what it does is activates dendritic cells. Then the dendritic cells are able to cross present antigens to T-cells, T-cells get activated and in presence of their own checkpoint, for example, Keytruda, T-cells get activated and kill cancer cells. In Slide #24, I show the benchmark that we have to compare to. In this case, we have a very good benchmark from the Phase III studies, keynote 40 and keynote 48. So in the second-line, head and neck patients that has not been treated before with a PD-1 treatment, Keytruda alone produced a response rate of 15%. In the first-line, not much different, a 17% response rate. And if we add chemotherapy in the first-line on top of Keytruda, we have a 36% response rate. Our study -- our initial study in Slide #25 was in the second-line before Keytruda was approved in the first-line. So we are very, very lucky, we had 10 patients that were checkpoint naive in blue and 10 patients that were checkpoint experience in red. It will focus in the 10 patients that were checkpoint naive in blue, who have a 40% respond rate that compares very well to the 15% response rate of Keytruda alone in this line. From there, and also we had -- sorry, also we had a double of the PFS and the OS compared with Keytruda alone. If we move to Slide 26. Then we move into a Phase Ib, another one, moving now into a first-line, comparing 10 and 15 mg per kg and top of Keytruda plus 5FU plus carboplatin or platinum. In Slide #27, we see there preliminary results of this study. Previous study is still early and still enrolling. Out of 4 patients who have 1 CR and 2 PRs and I want you to notice that even we have responses in patients with a combined PD-1 score or CPS score of 0, where Keytruda is not expected to do much. So with this positive data, on Slide #28, we're moving into 2 randomized Phase II studies, in one of them, comparing Keytruda plus ALX148 versus Keytruda in first-line patients with a CPS score higher than 1. Aiming to get improvement or response rate from 17% to 33% or for patients that are CPS [indiscernible] to any CPS score, we're going to compare ALX148 plus 5FU plus platinum versus Keytruda, 5FU plus platinum. Again, randomized time to get a response rate of 54% above the benchmark of 36%. These 2 studies are powered to be potentially registrational. Finally, in MDS, the mechanism of action is that azacitidine, the combination drug regulates Calreticulin cancer cells and this Calreticulin interact with LRP, a receptor on macrophages and provides that acquire positive signal and then ALX148 blocks the CD47 SIRPa, unleashing the full activity of azacitidine. Magrolimab, Gilead's CD47 antibody obtained proof-of-concept in this indication where magrolimab in combination with azacitidine has a 42% CR rate that compares very well to the 17% CR rate of azacitidine alone in this indication. Magrolimab by itself, a single agent didn't do much, a 0% CR rate, and even with the strategy of our priming loading and maintenance dose, magrolimab has significant side effects, cytopenias related to the active Fc. For example, has 38% drug-related anemia, big part of it, grade 3 and grade 4, also neutropenia and thrombocytopenia. So our goal here is to get an efficacy similar or better than magrolimab, but with much better safety profile. We have corroborated in-house that azacitidine enhances the expression of Calreticulin, and that ALX148 is able to enhance the [indiscernible] doses that azacitidine on cancer cells. We have proven anemia models on Slide 32 that ALX148 is able to enhance the activity of azacitidine and produce 2 more regulation in this Leukemia model. And also in combination with Venetoclax in Slide #33, we see that ALX148 is able to enhance the activity of this VCL2 inhibitor, opening the possibilities in combination with AML. So based on the proof of principle, proof of concept of magrolimab in this indication and our competitive data with magrolimab in NHL and our clinical data, we're moving into a Phase I/II study in MDS where initially, we are doing a confirmation dose escalation for safety, giving up to 60 mg per kg every 4 weeks to combine very well with azacitidine that is either monthly and then move into a Phase II, where we're going to combine ALX148 plus azacitidine in the MDS patients that are high-risk or very high risk, with our objective response rate of CR and PR. Finally, as a summary, ALX148 tolerability profile enables combination with our wide range of patients, our higher dosing and small molecule weight facilitates tumor penetration for greater efficacy. We have preclinical proof of principal, both in hematological and solid tumors, and ALX148 is the only CD47 blocker to show encouraging data responses both in solid tumors and hematological malignancies. It stands some benchmark for 2021. On Page 36, we have already started the MDS study that we plan to finish by the end of the year and report the results and start the Phase II in MDS. So we're going to be updating the 2 Phase IBs in gastric cancer in head and neck that we are still continually ramping. In the first half of the year, we are planning to start the Phase II in head and neck in combination with Keytruda, and also start the combination with our ZW25 in collaboration with Zymeworks in breast. The second half of the year, we will be starting the Phase II in gastric cancer in combination with Herceptin, and a Phase I study in AML. And by the end of the year, again, as I said, we're going to be reporting the MDS Phase I data and starting the Phase II MDS study. And the first quarter of 2022, we plan to show data from the Phase I study that we're starting this year in AML. In terms of financial information, last year, in 2020, we did our IPO and a follow on. And together with both rounds of funding, we have enough cash in hand to go through 2024, performing all the studies I have mentioned and finishing them all and also starting some new studies and potentially bringing a new compound into the clinic. And with that, thank you for your attention, and I will introduce Sophia Randolph, that will be helping us in the question side.

Great. So we'll start with Q&A here. As a reminder, if you have a question, please hit the blue button entitled ask a question, and we'll do our best to work through those questions in the next few minutes. So first question for team, just as we look out here at 2021, could you give us any guidance on which medical conferences you might have data at? And is more data expected for solid tumors in 2021?

And Sophia, you want to take that one?

Sure. Yes. So over the course of 2021, as Jaume presented earlier, we will be updating our solid tumors from our first-in-human study, the ongoing cohorts, as he mentioned, for example, for head and neck, there are a few more patients that need to enroll as well as gastric with longer durability of those responses. So we will be reporting those out at conferences over the course of the year, which conferences remains to be determined, but we will be continuing to follow-up on those cohorts. And then the other, I think, major data release would be towards the end of the year when our MDS study, the Phase I portion of that study should be reading out prior to the end of the year, so we'll be able to report on that as well.

Great. Thank you. The next question just relates to the dosing regimen and timing intervals. So you did mention on one of the slides that you go up to 60 mg per kg and up to 4-week dosing intervals, when do you think we'll start seeing data on that new dosing regimen? And just in conjunction with that, can you remind us what the half-life of ALX148 is?

So for the 60 mg per kg Q4, that's the final dose level of the Phase I portion of our MDS study, and it's a traditional 3 plus 3 design. So as I mentioned, by the end of the year, we should have completed those 3 dose levels we've already started dosing as we've said externally as well. So we don't anticipate any problems. We should have that 60 mg per kg before the end of 2021. The half-life of our drug at steady state, at the -- both, I think, around the 10 and the 15 mg per kg Q week dosing is 30 days. So I don't know, Jaume, if you want to say anything more about the half-life.

Yes. So the half-life is completely stable 10, 30, 60, so it's 30 days. So we have completed PK at that level. So a monthly dose thing should be achievable easily.

Great. And then the next question relates to the request by the FDA to conduct some additional nonclinical safety studies. Could you provide us an update on the timing for those and if that impacts your enrollment pace in the Phase II head and neck studies in any way?

Yes. So this longer preclinical talks that has been requested is very standard. So it is required for any study that is registrational and is now been done. We plan to submit the protocol and the report to the FDA in the middle of the year, more or less, May, June time frame. And if it doesn't have any impact in any of the studies in terms of enrollment because we can dose 50 patients from the treatment arm, so the ALX arm in the study. Despite that, we really would love to have 50 patients enrolled by midyear in one of the Phase IIs. I don't think it's going to happen. So we don't expect any delay in many of the trials based on this report. And as I said, it's a completely standard nonhuman primate study that is required for registrational studies and that's quite something important, right? So by doing that, we are clearly saying that our studies had agreed to be registrational.

All right. That's a good segue into the next question. So you do have a couple of fast track designations. Can you just summarize which indications are covered by the fast track designations and where you might explore potential accelerated approval pathways?

Yes, Sophia?

Yes. So we currently have fast track designation in the first-line head and neck population where we have ALX in combination with Keytruda, 5FU and a platinum. And then also in second-line gastric HER2-positive gastric cancer ALX in combination with trastuzumab, cyramza and paclitaxel. So these are the areas, some of which we are going in into our mid-development program. Regardless of whether there's fast track present or not, we are designing our Phase II studies in these 2 indications to always have the potential for registration. So for example, the head and neck, while we have fast track for the chemo combination, certainly, the randomized Phase II looking at ALX plus Keytruda in the first-line setting, FDA has also said is potentially registrational from an accelerated approval standpoint. So it just speaks to, I think, the acceleration of this program, and the teams are doing a great job in designing these studies in a way to determine the clinical benefit of the drug and get it to the patients as quickly as possible.

Great. That's very helpful. And then I think this is the last question just in terms of the clinical collaboration you just started with Zymeworks. Can you just remind us, what got you excited about that combination? And then within the collaboration, who is responsible for during what?

Yes. So this really builds on our strategy with ALX148. We believe that can be widely combined with many different agents. So they are always first to put the first stake on the ground with one indication with one drug, for example, with the gastric cancer in combination with Herceptin and then expand from that to other indications where HER2 is important target and also new generation HER2 molecules. So the Zymeworks collaboration is a very good example of that where we're moving to a bigger market, breast cancer, and at the same time, we are combining with the next-generation molecule that is very promising in terms of to be able to move to earlier lines, like ZW25. So you will be seeing more of that in the future of us using our initial data in one indication or one type of drug to expand to our indications and other combinations related to those ones. So maybe, Sophia, can give some idea about the design of the studies with Zymeworks.

Yes. So with the Zymeworks collaboration, we're looking at 3 different populations. On the one hand, we're looking at -- 2 of them look at advanced breast cancer, so later-line breast cancer patients who are HER2 overexpressors. So with your traditional IHC of 3 plus or IHC 2 plus and FISH positive or ISH positive. And then a second population, which are HER2 low expressors. So patients who maybe are IHC 1 plus or 2 plus ISH negative. And then also looking at a population of just other solid tumor, a variety of different solid tumor cancers that are -- have HER2 positivity as well. So it will be initially a Phase I portion, looking at dose escalation between our drug and Zymeworks and then these 3 expansion cohorts to look for signals of activity.

Great. Well, that was very helpful. That is the end of our questions. And with that, I'd like to thank everyone for joining us for this presentation today. And have a wonderful day.

Thank you, Kat.

Thank you.