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

Good afternoon, everyone, and thank you for coming to the UBS Biopharma Conference here in beautiful Miami. I'm Colin Bristow, one of the biotech analysts. It's my pleasure to have ALX Oncology with us here today. On behalf of the company, we have CEO, Jason Lettmann; and President and Chief Scientific Officer, Jaume Pons. So thanks for being with us here today.

Thanks for having us.

So maybe let's start with a sort of a relatively broad question around the CD47 space. What are your current thoughts about the overall CD47 field? We've seen some sort of reasonable, I'd say, disappointing data from competitors. So what is your current thinking and excitement? And how do you see evorpacept just being differentiated?

Sure. Well, thanks again for having us. Appreciate it. These are very comfortable chairs, so we'll try to stay away and keep you all away through post lunch. I think since founding the company in 2014, a lot has changed in CD47. But in many ways, the story is still the same for ALX. We really pioneered the first approach to block CD47 with the dead Fc, which is a very differentiated mechanism to what has been tried. And at the time of the company's founding, it was really about 2 mechanisms. One was in combination with anticancer antibodies; and two was in combination with checkpoint inhibitors. So as things have played out, those 2 periods, if you will, are still very much intact. And frankly, with the recent gastric data, which I know we'll talk about, has only validated that more. And over time, a third mechanism was tested, which was in combination with azacitidine, which is, of course, what, 47 and others have done, which, unfortunately, didn't pan out. But for us, and I think for the space that we're most excited about, is what we're seeing with -- in particular, with anticancer antibodies, and we'll see soon with checkpoint inhibitors.

And in terms of some of the competitor disappointments, any -- you've got the dead Fc, anything specific or anything in addition you would call out on their assets you think were driving those sort of disappointing data sets?

Yes. I think, again, Jaume should weigh in on the mechanism. He's the scientific genius, frankly, behind the approach. But what we feel you have to do is separate the don't-eat-me signal from the eat-me signal. Obviously, CD47 is very widely expressed. It's one of the common ways in which the immune system recognizes itself. And so it's very difficult to achieve both safely in one molecule. And so what we're doing is separating the don't-eat-me signal from the eat-me signal. And that is what has resulted in our superior safety and what we're seeing in efficacy. And I think it highlights how it's very different from what magrolimab and some of the others have seen.

Yes, specifically what Jason said. So it is the key here is that CD47 is expressed in any cell of the body. The competition tried to make molecules that kill all CD47-positive cells with a specific toxicity. We decided in the very beginning, to separate toxicity from efficacy by separating the signals first. So when you ask me about the field, I think the activity is very healthy. If you look at one company, this one.

It is not biased, Colin.

That's right.

You're right. The data sticks.

That's true.

That's right. So you've got 9 ongoing studies across 7 tumor types. And I think there's a lot of investor focus on head and neck and gastric. As you look across the suite of studies you have, which ones do you think are sort of underappreciated or overlooked by investors in terms of either sort of probability of success or just sort of risk-adjusted opportunity?

Yes. So I think the way we like to think about it is mechanistically. So it's really the 2 mechanisms: one, with anticancer antibodies to harness the power of the macrophage; and then two, it's in combination with a checkpoint inhibitor to harness the power of T-cell activation. And so on the first, of course, what we're most excited about is what we've shared recently with the gastric data, which is ASPEN-06, which is the first randomized study in the solid tumor setting in the CD47 space. So there, with a 30% delta versus control, and we were guiding and hoping for 10%. In terms of response rate, I think we're very, very bullish on what we're seeing. And I think that's driving confidence in the full data set, which we'll disclose in Q2. And we feel like that is a great validation of course, in gastric, but that is a great validation with any anticancer antibody. And if you look at the consistency of the signal, for example, what we saw in combination with rituximab in earlier studies, we think that our drug works with any anticancer antibody. And so when you look forward, I think that is underappreciated perhaps. And then, of course, it's the second mechanism. Again, these are 2 very different mechanisms, but the second mechanism of checkpoint inhibitors, we're going to have the first randomized data in that space back half of next year. And that is also, I think, very exciting. In that case, we're testing evorpacept in the first-line setting in head and neck, which, I think, represents a huge opportunity as well. So those are the ones we're most focused on at this point.

Yes. What I would say is that people tends to think about hematology versus solid tumors. We do not think that way. We think specifically anticancer antibodies and checkpoint, which, for example, we have isatuximab, combination of multiple myeloma. So we are very excited about -- it's the same mechanism as evorpacept in gastric cancer. And -- but that's hematology, right? So I don't think we want to be boxing heme, but we started on the solid, not heme. We are combination with anticancer antibodies and conventional checkpoints. And anticancer antibodies includes [ synthesis ].

Okay. I think it's a good segue to ASPEN-06. And I think a common question or a common discussion we've been having with investors is just the ORR for the control arm was perceived or a concern was that it was just underperformed. It was 22% ORR, I think if you look at as a small Korean study, I think at a 54% ORR, just how do you rationalize that? What do you think are the nuances that drove that?

Yes. I think that has not been a surprise to the clinicians and the investigators involved in the study. I think what's interesting and certainly great for patients is that the treatment paradigm has evolved across oncology, but in gastric as well. And ASPEN-06 is one of the first studies to look at globally what does the current standard of care look like in the second line. And so to see something in the 20s when many of these patients have seen a checkpoint when they've seen in HER2, again, second- and third-line patients were enrolled here. It's the population that's in dire need of new therapeutics. And so, again, we don't think that, that flow for a global study. And then I think your other -- the second part of the question just referenced, the HER-RAM study out of Korea, which was a single-country-focused study that was pre in HER2. That was a relatively healthy population. And there, they showed a 50-some percent ORR. And I think what's interesting is that demographic is very similar to what the -- our study that we ran our Phase Ib study, where we showed a 72% overall response rate, again, Korea-only very similar patient population. So again, I think some of that's apples versus oranges, and that's why you were run a randomized study. And again, with ASPEN-06, we're pretty confident in what we're showing there.

As a follow-on to that, just also on the DOR, there was -- we saw despite the low response rates in the TRP arm versus HER-RAM, but the median DOR of TRP and ASPEN-06, I think was 7.4 months. And that was greater than what we've seen in HER-RAM at 6.7%. Anything you can say around that?

I think it's -- you have response rates, durability and survival. And again, I think durability and survival is where a lot of the noise can get washed out. So to see consistency with our control arm and what they saw is encouraging to us, particularly when you compare with what we're seeing, which is we have not reached DOR at the interim. So that's particularly encouraging, particularly given that I think the average duration of follow-up is about 8 months at the time of the interim. So we are encouraged by what we're seeing on the durability front, and I think, again, it's consistent with what we've seen in the prior studies, too.

And what should we expect to see from ASPEN-06 in 2Q next year in terms of survival data and the maturity of the overall survival?

Yes, we're going to -- we're planning to share what we have at that point. We've guided to Q2. Of course, when you think about survival and PFS, that's going to be event-driven. So I think we'll be happy if it's not reached at that point. But again, I think one of the challenges that you have with interim is we're still actively recruiting patients. We're in the middle of the study and certainly want to preserve all options with FDA. But I think, as we've communicated, once we get to Q2 and have the final word, then we're going to share what we have on all fronts.

The -- you've discussed plans to seek a potentially accelerated approval based on ASPEN-06. And so what do you view as the sort of must-have in terms of survival benefit? And can you remind us of the powering for the survival endpoint?

So the primary on [ all 6 ] is overall response rate. I think the good news in gastric, which we can talk about head and neck, but response rate has been predictive of survival in gastric, which is why we're powering the study off of that as the primary. In terms of accelerated approval and how the agency will look at that, of course, we don't want to play FDA, that never ends well. So that will be a review issue for them. But again, I think what they recognize in this contemporary environment with so much for patients in the first line if there's a real need in the second line. And again, to see the type of response rate we've seen so far, we feel relatively confident that should translate into some good conversations with FDA, but too soon to tell at this point.

Makes sense. On tox, you've made the incidence that cytopenias was evenly distributed between the evorpacept-containing arm and the control arm. So is the fair inference there that 4% doesn't contribute to any anemia. And another thing is the TRP triplet was supported to lead to high rates in neuropathy. And can you just say what you saw in the study there?

So I think on the safety front, again, our safety profile has been very consistent and very differentiated from what has been seen in the space and CD47 is so widely expressed, particularly on blood cells. What the others have seen has been a very significant team tox signal. And we have not seen that. We have not seen anemia. We've not seen the grade 3, 4 very strong neutropenia, cytopenia signals that others have seen. And again, that goes back to the mechanism. I mean, we are going to see the tox associated with the backlog on the triplet. But again, I think that's consistent with any HER2-targeted agent plus chemo. But if you look at the evo contribution beyond that, it's been a very clean, very encouraging safety profile.

Great. For the Phase III in gastric, which you initiated in the second half of next year, just what sort of rationale -- how do you justify the use of RAM + PAC means as the active control when the standard of care is kind of shifting towards in HER2?

Yes. So that's an active area of exploration and conversation for us as well. I think right now, if you look at the guidelines, RAM + PAC is still second-line level 1 evidence. And HER2 certainly has come on the scene in the second line as well. And I think that's why we're mindful of the comparison. Ultimately, we have to look at the full data set to know how we compare and that we're going to be making decisions based off of that. But again, I think what we're seeing so far is very encouraging. And then once we get to the final, we'll be able to share more as to how we're thinking about the final study line.

Yes. But the same is doing trastuzumab, less endorsed by the FDA before the starting of the schools. So the study design was not very agreed with FDA because they started Phase 2.

Okay. And will you meet with the regulators sometime between now and the final ASPEN-06 readout? Is there anything planned there?

We're not disclosing FDA interactions. But I think, for us, when you have interim results like this, it's great to see such a strong signal. So we're going to be taking into consideration that, and I think talking about what we should be doing with FDA as well. But certainly, when you see a 30% delta, I think it allows us to be more aggressive.

And when will you be in a position to give us sort of more granular detail on the Phase III design?

That will be around Q2 as well. Again, we wanted -- you asked about survival, PFS, the full data set, if you will. And we also want to see that before making any major decisions around the design. Again, super encouraged, and I think interim results like this allow us to get started. But we want to see the full before we fully commit.

It makes sense. So switching to head and neck. You've got 2 readouts in the second half of next year, ASPEN-03 and 04, top line in first-line head and neck. Can you talk about your dose selection strategy? So you looked at 10 milligrams per kg and 15 [ Q weekly ] in the Phase Ib. Now you're looking at 45 milligrams per kg Q3 weekly in Phase II. Can you just -- can you walk us through that and the data that's supporting it?

Yes. I mean the best way to think about our dose is we will be matching our dose with whatever combination agents we're going with. So it's effectively the same dose, it's just different frequency. Do you want to...

Yes. So the way it works is that 10 mg per kg [ Herceptin ] weekly, that is equivalent to [indiscernible] right? And we have shown a decay that we have the same exposure with all these different regimes. So that's an advantage of our safety profile. We can bring up the initial dose and cover the dosing interval. And while we are doing that, we are always in combination. So we don't want the patients to have to come every week to the hospital to get the dose. So we combined with Herceptin maybe another week to 30 every other week. [indiscernible] 3 weeks to 45. And we will combine it with [indiscernible] we were doing 60s before [indiscernible] 4 weeks. I think that's a huge advantage of our plant design. Other companies, they have to go weekly when the [indiscernible] I think that is a case advantage for the patient, too.

Go ahead, Jaume, and explain that. That's a lot of math post lunch.

On ASPEN-04 or the chemo-containing regimen, we didn't see a great for the separation or improvement in ORR reported in the Phase Ib with the Evo-KEYTRUDA chemo combo versus what we saw in KEYNOTE-048. So what's your expectation going into the Phase II readout? And what's the bar -- what's your threshold that you need to see to move forward?

I think in head and neck, even post KEYNOTE, as we've seen with the LEAP study, the correlation between response rate and survival is not as strong as it is in gastric. And I think there's been many programs who have been less trade by assuming in head and neck that the response rates are going to be predictive. And so what we're trying to do is get to OS. And again, I think we're confident in the because of what we saw in the Ib. We sell over 80% OS at 1 year, which we don't feel, has been demonstrated elsewhere. And again, I think what's been a little underappreciated is how things have played out in head and neck because, ultimately, if we can deliver 12-months OS, that's going to trump everything else, which is what we're shooting to share back half of next year. So again -- and I think -- I mean Jaume can talk about it mechanistically, but it's our agent plus KEYTRUDA to immunomodulatory agents, so we don't necessarily have a hammer in that case, and you'd expect things to take a little while. And again, I think that's consistent with what's we do. Speaker 3 Yes. So this is very important here, right? So if you look at the KEYNOTE-048 where KEYTRUDA was approved, even in the case of staking it equates approved enables the cases, Q2 had any impact in our response rate. It was approved in the survival. So that is one that we know for our this mechanism. In the case of competitive chemotherapy, where chemotherapy has a huge debulking effect leading cancer cells, given expect to see a change of response rate outcome on at moratoria compare. In the case of ASPEN-03, well, there is no chemotherapy in the Phase I, we did see improvement. We'll see it in the Phase II, hopefully, but mechanistically, that would make sense because there is not a big departing effect of chemotherapy. Yet in the KEYNOTE-048 with compute was approved for alone, would not show a response rate different later. So actually, we see that we even better in the because capital show that.

Any specific thresholds you're willing to put out there in terms of your go-forward decisions?

The remit diplomatic endpoint is that we are survival or month. So that is about efficient point. And response rate is our second -- is a second in part. So we are going to be catching for both studies in overall survival to...

Maybe in the last few minutes, let's switch to ADC and the ALTA-002. Can you talk about your ADC platform from the [ ScamiBio ]? And what are some of the targets that you're looking at?

Yes, we're having the business target for obviously, right? So you do competitive. I would not show it antidata as possible to be able to have an advantage there. A Gaetano the platform that it has 2 components: one is a in-house payload and linker that company owns from Petri. And second, masking technology that will be activated only in the tumor. For different candidates with mix and magic too. Some of them, we have both, some of them would only have a payload imagine is a base payload, which in my opinion, is the highest probity success at this point.

That's helpful. And the ALTA-002 is the IND still on track, I think it's for 1Q next year. Time lines still there?

It is, yes. We're still on track for the Q1 IND for ALTA.

And will we see any preclinical data from that at all?

Yes. So we have a poster in SITC last year, that probably you have seen, where we show a very significant single-agent activity, both in tumors expressed in SIRPalpha and tumors not expressed in SIRPalpha. So I think that -- I see this molecule as a very big hammer. We got a molecule that it will show itself quickly, which is one because it is designed to have a very, very strong sensitivity activity if the animal data is repeated in humans.

Just -- I guess just taking a step back, what are the mechanisms or targets of interest to you right now? And just the current sort of biotech valuation backdrop sort of increase your appetite for business development and just being opportunistic?

Yes, I think it does. We're in a strong cash position. We have a great group of investors. We've done a number of collaborations with pharma. We continue to have strong interest there. And I think to Jaume's point, we have a pipeline that's underappreciated, but in an incredibly hot space where we have a lot of expertise, but there's certainly opportunity to bring in additional programs, and that's something that we're going to be looking at as well, probably over the next 2 or 3 quarters.

Fantastic. And maybe could you just remind us on your cash position and runway.

We -- so we closed the financing of -- I think we netted roughly $60 million for the gastric data. We have cash now into early 2026. So we have a long list of catalysts coming up next year, and we'll be able to see through all of those without any financing overhang. So well capitalized and in a good place from a balance sheet perspective.

Super. And maybe just to kind of wrap things up, could you just walk us through what are the most important catalysts that we, investors, should be paying attention to over the next 12 to 18 months?

Yes. I think it's gastric final, of course, final randomized data in Q2. It is ASPEN-03 and ASPEN-04 second half of next year, which are, again, first randomized studies in the checkpoint space in this field. We're running 2 programs with ADCs that we haven't talked about, that we're also excited about. We have a program with -- at MD Anderson to test kind of the heme hypothesis. And yes, I mean, if you look at the milestones coming up next year, it's a pretty long list. So we're excited. We think we've validated the anticancer antibody hypothesis with 06. And from here, there's just a lot to look forward to. Jaume?

Yes. There's something like 3 randomized. There's 2s and 3s [indiscernible]

Just a few things going on.

Yes.

You guys are busy. We're looking forward to following it. Well, I think that brings us to the end of time. Jason, Jaume, thank you very much for this. Thanks, everybody, for coming, and I think we'll wrap it there.

Thank you

Thanks.

Appreciate it.