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

Good morning. My name is Jaume Pons. I am the CEO of ALX Oncology. After the usual disclaimers in Slide #1 and some picture of us in our background in Slide #2, let's move to Slide #3. ALX Oncology is a clinical-stage immuno-oncology company that is focused in the CD47 pathway. ALX148, our Phase II clinical candidate, is a CD47 blocker that is designed to be used in combination. This design has shown in the clinic a very good tolerability profile that has enable higher dosing. And in the clinic, this higher dosing has enabled greater efficacy. At this moment, we have clinical proof of principle, both in hematological and solid tumors. Our initial focus is on solid tumors, MDS and AML. In addition to ALX148, we have a second compound that we call SIRPalpha TRAAC that would be an IND by the end of '22. CD47 -- in the Slide #4, CD47 as a target is highly stress in tumor cells, here on the left, in red, but it's also highly present on normal cells, in black. Therefore, if we use CD47 as a tumor associated antigen, we may have problems with therapeutic window by destroying cancer cells, but also destroying normal sales. What make CD47 interesting to me is it is a checkpoint moderator. Many anticancer agents, for example, anticans antibodies by cancer cells and provide local call and eat me signal. In that context, cancer cells up regulates CD47, that interacts with SIRPalpha on macrophages and other myeloid cells and sense, what we call, don't eat-me signal. So SIRPalpha is an inhibitory receptor on myeloid cells. It's a checkpoint for myeloid cells and the interaction within CD47 as [indiscernible] limits activity of many anti-cancer agents. One way to treat CD47 as a target is making CD47 as a tumor associated antigen. And therefore, designing molecules that bind CD47 and at the same time, provide the required positive signal, the eat-me signal. These kind of molecules can have sing-agent activity because they block the don't eat-me signal, and at the same time, they provide the required eat-me signal. But the problem is that CD47 is also expressing in normal cells, for example, red blood cells, platelets and neutrophils. And these approaches have shown in the clinic cytopenias related to this approach. These kind of molecules, therefore, they cannot be dosed high enough. And in the combination setting, where it requires to completely block the CD47 SIRPalpha pathway, they cannot go high enough and completely block it, and therefore, cannot enable the full activity of the anti-cancer drug. What we decided to do is design a CD47 blocker that builds the CD47 only as a checkpoint modulator. We made a molecule that binds very strongly to CD47 and blocks interaction with SIRPalpha but does not have an active FC. It is not able to interact with the Fc gamma receptors, and therefore, it does not provide the required positive signal. Our approach will not have single-agent activity. At the same time, because we don't provide a positive signal despite our molecule will buy normal cells, it does not destroy normal cells. For example, we have proven that we do not have any those related cytopenias in the clinic. In that situation, when we combine with an anti-cancer agent, we can dose very high, completely block CD47 SIRPalpha and fully enabling the activity of the companion track. Next Slide #7, you have a cartoon of ALX148. Our CD47 binding domain is, what we call, high affinity SIRPalpha, that's the [ specific ] domain of SIRPalpha, the receptor for CD47, that has been affinity mature to bind CD47 with very high affinity, with picomolar affinity and is fused to a compelling activated FC that provides a same half-life of antibody, the same pharmacokinetics, but does not interact with Fc gamma receptors. So therefore, it does not activate macrophages directly. Molecular weight is half for antibody. So if you want to compare our dosing with antibody dosing, you have to multiply by 2, 10 mgs per kg of ALX148 is equivalent to 20 mgs per kg of an antibody intensive binding sites. Also, the smaller molecular weight may enable better tumor penetration. As the molecule is cross-reactive to human, monkey and mouse, so we can run syngeneic models, and our technical models are more relevant of the clinical setting. And we have a complete antibody standard manufacturing process and very good stability. In Slide #8, you can see that in the combination setting, ALX148 has higher activity than the competition molecules with active Fcs. For example -- in this example, we have cancer cells that express eGFR and human macrophages will provide cetuximab that target cancer cells, so provides the required positive signal and is the orange dot on the left. And then on top of that, we have a dose response of ALZ148 magrolimab and TTI-621 that we made in house based on public information. You can see that ALX148 with the highest affinity and the loss effector function is the molecule that enhances more activity of cetuximab in this combination setting. Because our molecule cross-react with mouse, we have been able to test safety mouse as well. In this experiment, we're comparing ALX148 with an inactive FC with the same domain, lessening by the domain of CD47. So with an inactive FCs, that's ALX377. You can see that a single dose of ALX377 reduces red blood cells, platelets and white blood cells, while ALX148 does not. This experiment proved to us that the cytopenias seen in the clinic by others are directly related to the active FC and is not a target effect by binding CD47. We have proven in preclinical models that we can enhance anticancer antibodies in xenograft models, for example, rituximab on the left. And we can proof -- we have proven as well that we can [indiscernible] modulators in syngeneic models in the right, for example, combination with rituximab and anti-PD-L1 antibody, but we have also data with anti-PD-1 antibodies. Slide 11, you can see with our PK profile that we have linear PK at doses of 3 mgs per kg weekly and higher. The combination of antibodies do not change the PK, and the half-life at 10 mgs per kg and higher is predicted about 30 days. On the right, you see target occupancy on T cells. And you can see that we have full receptor occupancy across the dosing interval at 3 mgs per kg weekly and higher. In terms of safety, we have been able to dose very high in preclinical models at 200 mgs per kg in nonhuman experiment, that's equivalent to 200 mgs per kg of antibody with no observable adverse events. As a single agent in humans up to 30 mgs per kg a week with no evidence of dose-dependent cytopenias. And in combination, we have defined the Phase II recommended dose of 15 mgs per kg weekly, but intensive exposure because our PK profile is good, and we can dose higher. We have never reached a maximum treated dose. We can increase the dosing to extend the dosing interval. For example, if we combine with something that is dosed weekly, we can do 15 mgs per kg weekly or we can do the 30 mgs per kg every other week or 45 every 3 weeks if we are combining with pembrolizumab or 60 every 4 weeks, if we are combining with azacitidine that is dosed monthly. So our safety profile allows the very flexible dosing schedule, maintaining the same exposure. In Slide 13, you see a high-level description of our clinical program so far. We have tested ALX148 in head and neck squamous cell carcinoma in combination with Keytruda plus 5FU plus Platinum, and we have fast track designation for this indication. Now we're moving into our Phase II, in first line, head and neck with squamous cell carcinoma in combination with Keytruda and our Phase II in combination with Keytruda plus chemotherapy. In gastric cancer, we have tested ALX148 in the second line for patients that had failed starting the first line in combination with Herceptin and in combination with Herceptin plus chemotherapy. We also have fast track designation for this indication, and we're also moving into Phase II randomized potentially for accelerated approval. In collaboration with Zymeworks, we're testing ALX148 with zanidatamab, a bispecific anti-HER2 antibody in breast cancer, and the Phase I should start shortly. In hematological malignancies, our focus is MDS and AML. In MDS, we are now in the middle of Phase I in combination with azacitidine to start this too this year, and we're going to start a physical on AML also this year. We have a very good proof of principle study in the nutshell in combination with rituximab, patients that have failed rituximab, and this is a study that allows us to compare ourselves with the data from others CD47 blockers. And finally, we have a second program that I would discuss later. In terms of safety in humans, it has been very solid. The most common set effect is fatigue and some rash. You can see that cytopenia is like pellicles or neutropenia is single-digit percent and quite not frequent. And we have proven that it's not dose-dependent. So this safety profile is really a best-in-class safety profile and allows us to combine with our multi-agent cytotoxic chemotherapy, for example, in combination with Herceptin with chemotherapy or in combination with Keytruda with chemotherapy. In [indiscernible] efficacy, at this moment, we have 5 independent combination studies and the 5 of them will result above the benchmark. The first one is for NHL patients in combination of rituximab, patients that have failed rituximab already. We don't have a very good benchmark for this indication. [ QRS ] is in the range of 10%, but nobody has randomized study of rituximab in the second line or later after rituximab. But we can compare ourselves with magrolimab, the stimulus patient population, the best response rate magrolimab had was 48%, and we had a 70% response rate at our higher dose of 15 mgs per kg weekly. In second line head and neck for patients that checkpoint naive, so not treating with Keytruda in the first line, we had a 40% response rate, where the benchmark for Keynote-48, the Phase III from Merck, benchmark is 15%, and we also do double PFS and OS. In first line head and neck now that Keytruda is approved in the head and neck, we have combined with Keytruda plus chemotherapy. And there, the benchmark is 36% and with a very small number of patients, only 4, we have 75% as of efficacy last year. We're going to update this study by the end of this year with 15 or 14 patients total. In second line gastric cancer, patients that have failed starting the first line, we know that Herceptin in the second line does not add anything, that has been shown in a prospective Phase II study that paclitaxol plus Herceptin had the same response rate in OS as paclitaxol alone. In the second line, ALX148 plus Herceptin has a 21%, which is very significant. And then if we put this doublet, this active doublet in what is standard of care, Cyramza, paclitaxel, we [indiscernible] next year, a 64% response rate, where the benchmark is 28%. And we're going to update this study July 1 at ESMO GI. Now we're going to go to give more detail to advance studies. The first one is ALX148 by rituximab -- in combination with rituximab in NHL. In this case, rituximab and CD20 and cancer cells by Fc gamma receptor macrophages providing the required positive single and ALX148 releases the brakes binding CD47. In the Slide #17, you can see that at 10 mgs per kg, we had a 41% response rate and at 15 mgs per kg weekly, we had a 70% response rate, and this increase of response rate is statistically significant. What's interesting is that both doses will have full receptor occupancy in the periphery. So what it tells us that to completely block CD47 in the case of [ mother ] in the tumor, we need to reach more than 100% receptor occupancy in the periphery. We have to have excess of antibody above the 100% receptor occupancy in plot. You can see on Slide #18, despite the plots -- the waterfall plots for this trial. And you can see they have responses. Both in indolent and aggressive lymphoma, and we have PRs and CRs and very long durational response. And this is statistically significantly better at 15 mgs per kg compared with 10 mgs per kg. The next study is Slide #19 is lastly cancer second-line patients that have failed Herceptin in the first line. In this case, Herceptin by HER2 on cancer cells and provides a positive signal and the ALX148 again releases the mix. For this study we did was ALX plus Herceptin alone in the second line, where we know that Herceptin by itself does not add anything, and we have a 21% response rate. From there, we went to the second line on top of the standard of care in Slide 21, and you can see that we had a efficacy last year a 64% response rate, which is very significant when the benchmark is 28% from the RAINBOW study. We are going to update this study by the end of July, beginning of July. And from that, we're moving into a randomized Phase II study in combination with Herceptin and Paclitaxel. There could be potential for this indication. Another study that we have done is in head and neck in combination with Keytruda. Here, the mechanism is slightly different. And In Slide #23, SIRPalpha as expressed in dendritic cells and CD47 immediate dendritic cells. By blocking CD47, we activate dendritic cells, dendritic cells can present antigen to T cells, and then T cells get activated. And when we unleash them with their own checkpoint, with a PD-1 blocker, these T cells can kill cancer cells. So basically, in this case, we are helping the tumor microenvironment to create or activate T cells. We do have a very good benchmark for this study on Slide 24. We know in the second line, patients are checkpoint naive. There is a 15% response rate. And in the first line, Keytruda alone is 17% and Keytruda plus chemotherapy is 36%. Now our first study that was second line, before Keytruda was approved in the first line, we had 10 patients, they were checkpoint naive and 10 patient checkpoint experience. It will focus on the patients that are checkpoint naive in blue, you can see have 4 out of 10 that responded with a 40% response rate that compares very well to respect at 15% in this line and also we doubled the PFS and OS. And you can see the half responses in patients with very low PD-1 scores, for example, the fifth patient from the right is at CPS score of 0. From that, we went to first line. Now that pembrolizumab is approved in the first line on top of Keytruda plus chemotherapy. As respect to last year, we only had 4 patients. But of those 4, 3 responded, 1 CR and 2 PRs, and one of them was a CPS score of 0. So again, very promising data, and we're going to update the study by the end of the year with more patients, something like 13, 14 patients. From that, we are moving into 2 Phase II studies in the first line, one in combination with Keytruda and one in combination with Keytruda chemotherapy, both are randomized and both are substrate for potentially accelerated approval. We have already dosed the first patient in the top study in ALX plus Keytruda. And shortly, we expect to those -- the bottom one ALX plus Keytruda plus chemotherapy. And finally, another mechanism that we're exploring is in combination with azacitidine in MDS. In this case, azacitidine upregulates a molecule called calreticulin in cancer cells. Calreticulin binds the receptor of macrophages called LRP and provides the required positive signal. And then again, blocking the ALX148 and releases macrophages to MDS cells. Magrolimab, the gallium molecule, had a very significant responses in this indication, in this combination. You can see on the table on the left, the magrolimab in combination with azacitidine had a 42% CR rate when the benchmark at azacitidine alone is 17%. So a very meaningful responses for patients. As a monotherapy in the middle, magrolimab did not show much with a 0% CR. Despite the responses are really good, at the same time, magrolimab does have significant thrombocytopenia and neutropenia and anemia, and cytopenias are important for MDS patients. Many of them will die of complications due to cytopenias. So what we want to do here is make a molecule, ALX148, that will provide the same or better response rates to magrolimab, but with better safety profile. We have shown in preclinical models that azacitidine has calreticulin and that the ALX148 enhances activity of azacitidine in phagocytosis in in Slide #30. We have shown also in preclinical models of leukemia that ALX148 can enhance the activity of azacitidine, in Slide 31. And now in Slide 32, the clinical trial that we are performing. We are now in the middle of Phase I dose escalating to improve the safety of ALX148 in combination with azacitidine. And from that, we're going to move into a randomized Phase II that could be substrate approval. Finally, a summary for the ALX148. We have shown that ALX148 has a very good safety profile that enables a combination with a wide range of patients, allows higher dosing and a smaller molecule weight may facilitate their tumor penetration. We have clinical proof of principle, both in hematologic and solid tumors. And the ALX148 is the only CD47 blocker to show an encouraging data in solid tumor so far. In terms of milestones for the rest of the year, well, as I said, we are going to disclose the data from gastric cancer, is one, combination of chemotherapy at ESMO GI. And for the head and neck, the Phase I will be disclosed in the second half of the year. We have initiated a Phase II for head and neck. And shortly, we'll initiate the Phase I with zanidatamab in breast, in combination with -- collaboration with Zymeworks. In the second half of the year, we're going to start the Phase II for gastric cancer in combination with Herceptin. We're going to start the Phase I in AML. And by the end of the year, we expect to disclose data for MDS in combination with azacitidine and initiate the Phase II. The results from the Phase I from AML should be coming first quarter of next year. And now the few minutes have left, I have a very quick introduction to our second compound, our SIRPalpha TRAAC. We are really specialize in the CD47 SIRPalpha highway, and we understand the biology very well. SIRPalpha is expressed in dendritic cells, which are very important to activate T cells and that could may not be status of the immune system. So what we have done in collaboration with another company, Tallac Therapeutics, is a anti-SIRPalpha antibody conjugated to TLR9 agonist antibody -- TLR9 agonist molecule, a CPG. This molecule will bind magnetic cells and activate them directly. And these magnetic cells will be able to activate the tumor micro environment. What's interesting of this molecule is that it can be dosed systemically. CPGs, the TRL agonist have a very good clinical validation from companies like SyncMate, but they have to be dosed systemically. Here, we are dosing them systemically and could be using this molecule in multiple indications. We have shown in preclinical models, in Slide 36, that we can activate dendritic cells -- human dendritic cells and that we have a very strong activity in syngeneic models, for example, on the right, CT26, just 2 doses produce full tumor regression. And in MC38, on Slide 37, we have proven that we provide a long-term memory of efficacy. So mouse that have been treated with SIRPalpha TRAAC and produce complete regression, when they are challenged again with MC38, the tumor does not grow, while the naive mouse -- all the mouse, the tumor grow. Next Slide, 38, the transition between ALX148 and SIRPalpha TRAAC. ALX148 is an antagonistic molecule that is designed to maximize the activity of a wider rate of anti-cancer agents by blocking the CD47 myeloid checkpoint. The removal of the CD47 disease inhibitory signal requires full blockade of the pathway. On the bottom, SIRPalpha TRAAC is an agonistic molecule that directly activates dendritic cell and initiates a coordinated innate and adaptive immune response against cancer. In the case of agonistic molecules, constant blockade is not required. So in terms of positioning, we think about ALX148 to go on top of the standard of care. And we think about the SIRPalpha standard of care fields. Finally, in Slide 39, our fiscal year information. As of March 31, 2021, we had $429 million in the bank. This is expected runway through 2024 and as enough to finish all the phase dose that we just described. Thank you for your attention.