Aptorum Group Limited (APM) Earnings Call Transcript & Summary

Next, we have Aptorum Group, a pharmaceutical company dedicated to developing and commercializing novel therapeutics to tackle current unmet medical needs. Aptorum's current drug pipeline includes indications in orphan diseases, infectious diseases and metabolic diseases, a number of which are targeted to enter clinical trial phases. Please join me in welcoming Aptorum Group.

Hello, everyone, hi. My name is Darren Lui. I am the President and Executive Director of Aptorum Group. It is a pleasure today to be here at the LD Micro event to present to you a little bit about Aptorum Group and some of the updates we have announced as of today. I'm here to join by my newly appointed colleague here, Dr. Herman Weiss, who I'd like to make a small introduction. And also, he'll be able to talk a little bit about our exciting microbiome platform, Claves Life Sciences, in later slides as well. First of all, just before I launch into the presentation, I would like to bring to your attention, this presentation contains certain forward-looking statements. To the extent if you do consider investments in our company, please do read through the disclaimer. Just a little bit about the -- our company. For those who've joined us for the first time, Aptorum Group was established back in 2010. Our company focus is to look -- focus on development in unmet medical needs. Currently, we have over 15 therapeutic candidates under our portfolio for development right now, including areas of orphan diseases, infectious diseases, metabolic diseases as well as women's health. Our business strategy is to focus on early-stage research, which could be as early discovery stage, all the way at least till the proof-of-concept of Phase II trials. After which, we have a number of options, including continue to carry out the pivotal trials ourselves or to explore certain co-development deals with other pharmaceutical companies as a partner. Our key market right now is the U.S. FDA. So we have planned certain clinical trials with some of our lead assets up in North America under the U.S. FDA standards. Other major markets, including the Europe EMA and the Chinese NMPA markets, will also closely follow behind our U.S. efforts. The company, at the moment, is listed on the NASDAQ, with a ticker symbol APM. And recently, over the summer, we also cross-listed on the Euronext Paris with a ticker symbol APM as well. Currently, our company's principal office is based here in London, in the U.K., with a core development site based in Toronto, which is focused on TRP work -- GMP work, including our clinical trial coordination. Currently, our company has over about 40 full-time staff as well as over 45-or-so scientists, advisers and consultants, who we work with based on their particular area of expertise as well. Moving on to Page 4. I'd like to bring to your attention a little bit about our team. As I said, so my name is Darren Lui, and I have over 13 years of global capital market experience. Previously, I studied at Imperial College, obtained my undergraduate studies in biochemistry, after which I spent close to a decade with a British bank, Barclays Capital, in their capital markets team as well. Today, I'm actually joined also by Dr. Herman Weiss, who's our nearly appointed CEO of our microbiome platform, Claves Life Sciences. Dr. Herman Weiss is also a senior medical adviser of Aptorum Group. He has over 20 years of experience in the medical field. Recently, he was the Chairman of the Board of Directors on Todos Medical. Previously, he was Head of Clinical Development and Medical Affairs at Juniper Pharmaceuticals before the company was acquired as well. He obtained his M.D. at Ohio State University. Subsequently to which, he pursued an MBA course at the George Washington University as well. Okay. For those who's joined us the first time, I'd like to give you a quick overview of our development pipeline. Again, this presentation is also available on our website as well. At the moment, we have over 15 therapeutic candidates under our development right now, for which there are 2 lead candidates, which we're focusing most of our resources on. The first one being what we call a SACT-1 candidate. It is a repurposed drug molecule, at the moment, targeting an indication called neuroblastoma. We're going to have some further updates in later slides as well. This particular molecule, at the moment, is in the final stages of our pre-IND preparation. We're hoping to pursue an IND submission under the U.S. FDA's 545(b)(2) pathway later this year, so we'll be able to start what we call Phase Ib/IIa trials in the United States. Under this SACT platform, we also have 3 other assets, which are in the early stage of development and discovery stage. Our second platform is our Acticule platform, which is focused exclusively on infectious disease. In fact -- actually, antimicrobial resistance is a major issue right now around the world, and there are a lot of action plans being launched by various regulators around the world, focusing on antimicrobial resistance and trying to develop and encourage the development of next-generation anti-infectives. So within this platform, we have 4 assets under development right now, the first one being ALS-4. And so the ALS-4 is actually a small molecule. That is actually a first-in-class small molecule. It's what we call a new chemical entity developed in oral form, targeting a very deadly bacteria called staphylococcus aureus. Within that, there's a major superbug category called MRSA, M-R-S-A. This particular ALS-4 molecule at the moment is in the -- is finishing off its final stages line enabling studies. We expect to be able to submit a IND application to commence the Phase I trials in North America towards Q4 this year in the next couple of months. Within this platform, we have 3 other assets right now, ALS-1, 2 and 3, for which ALS-1 is focused on Influenza Virus A, currently in the midst of its lead optimization assets. ALS-2 and 3 are also next-generation anti-infectives, focusing on the Gram-positive bacteria group, using a novel non-bactericidal approach towards this disease. Currently, both of them are in the early stage of lead automatization. And our third platform, which we'll talk about later -- in a second, by Dr. Herman Weiss is our Claves series, which is a microbiome-driven research and development platform, focused, in particular, on major categories of metabolic diseases. Within that, we have 3 assets right now with our leading asset being CLS-1, focusing on the treatment of obesity. At the moment, it uses a, what we call a macromolecule technology, targeting the chemical signaling and modulating chemical signaling within our microbiome. At the moment, this asset is under lead optimization. And Dr. Herman Weiss will be able to talk a little bit more about this program in later slides as well. Just to complete our -- some of our other assets here -- other early-stage assets, including our women's health platform, which has an asset called NLS-1. It's a first-in-class small molecule targeting a highly unmet women's disease called endometriosis, which are these very painful lesions inside the uterus. It's been estimated to affect 1 in 10 women around the world. This particular asset approach uses a non-hormonal approach. One of the very first-in-class approach in treating endometriosis. And this particular asset, we have completed lead optimization stage. We're expecting to be able to commence IND-enabling studies towards the beginning of 2021. Our other asset in women's health is our NLS-2 supplement right now. So this is a women's health supplement targeted for menopause and osteoporosis. This particular asset is currently being commercially produced over in Canada. We are completing our registrations at the moment in the U.K., Europe and Asia. Hopefully, we'll be able to launch for distribution of that product in Q4 2020 as well. Just moving on to next, Slide 10, to talk a little bit about our SACT-1 program, targeting neuroblastoma. Now neuroblastoma, for those who don't know, is a form of cancer. It predominantly affects children, and is one of -- is the #1 most common type of solid tumor in children itself. It's been estimated, back in 2017, the global treatment market for neuroblastoma is $2.6 billion with a compounded annual growth rate of 3.7%. Neuroblastoma is usually treated as a rare disease. Usually, it would attain a orphan drug designation. In the U.S., orphan drugs usually receive 7-year marketing, specifically in the U.S. in parallel to any patents you may have. And over in EU, it's even more generous, they offer a 10-year marketing exclusivity for any kind of orphan drug being marketed in Europe as well. And just to quickly talk through some of the previous data that we've already been announced earlier in the year. For example, on Page 11, you'll see some of our in vitro data covering SACT-1. This particular drug is actually in our in vitro. But to conclusively demonstrate, it has the effect of killing these neuroblastomas. As you can see, pictorially, in the middle of the screen, the 2 picture shows the impact of SACT-1 on neuroblastoma sales. And in further data on Page 12, that was again announced earlier in the year. We demonstrated in our in vitro studies that SACT-1 could be synergistic together with existing standard of care chemotherapy. In fact, through the yellow squares, as you can see on the graph, it actually shows a synergistic effect. It has the effect of exacerbating the effect of existing standard of care chemotherapy as a result. So this forms a very strong hypothesis for our later announcement that we have made today. Moving on to Page 13. So this is a new data that we announced today through our news release over Business Wire. In fact, we did subsequently perform a, what we call, an in vivo model study of SACT-1 in combination with standard of care chemotherapy as well. Based on the initial 22-day data that was studied, we conducted in the xenograft mouse model of neuroblastoma, SACT-1 was orally administered in combination with standard of care chemotherapy. And you can see that between SACT-1, which is the green line, and the control group, which is the standard of care chemotherapy, which is the blue line, you see that actually it brought us statistically significant tumor shrinkage between day 15 to day 22 compared to the blue line control group. Actually, the reduction in tumor size was up to 54.2% in this period. And appears -- SACT-1 also appears to be effective in accelerating the effect of standard of care chemotherapy in early time points. If you look at day 1 to day 7, you see a sharp decline of the green line, which shows the ability to accelerate the effect of standard of care chemotherapy itself. This actually further supports our earlier in vitro observation that SACT-1 promotes tumor DNA damage and tumor cell death as well. We also did further cancer screenings as well. SACT was screened against in vitro models against a panel of over 300 cancer cell lines, which is also similarly being made publicly announced today. SACT-1 exhibits similar antitumor efficacy across major cancer types, including but not limited to, colorectal cancer, leukemia and lymphoma cell line as well. As a result, we believe SACT-1 have potential applications in the treatment of other cancers in addition to neuroblastoma. And it is our company's plan to carry out further in vivo studies in the coming months to observe the efficacy of SACT-1 over other types of cancers to maximize the potential of SACT-1 itself. Now I just want to quickly move on to our other update today, which is on our ALS-4 program. It's a new small molecule targeting a very deadly bacteria called staphylococcus aureus, including MRSA. For those who don't MRSA. Well, MRSA -- despite current antibiotic treatment right now, MRSA bacteremia, which is blood infection of the patient, currently still has an average mortality rate of around 30%. It was estimated in 2016, the global MRSA treatment market is about $2.9 billion, which had a compound annual growth rate of about 3.2% as well. Looking at Page 17. Now currently, this is a snapshot of currently approved antibiotics for MRSA infections. I would like to throw your attention to the first 2 antibiotic treatments, which is vancomycin and daptomycin. But these are the first -- the only 2 FDA-approved antibiotics that has been authorized for treatment of bacteremia. All of these antibiotics have shown resistance issues since as early as 2002 and 2006, and most of them are actually in IV form, with the exception of vancomycin, which has an oral form in -- targeted specific for gastrointestinal infection and Linezolid, which is also -- has an oral form, but only authorized for treatment for skin and soft tissue infection and not for bacteremia at the moment. Now I just wanted to talk a little bit about our ALS-4 program. ALS-4 -- the reason ALS-4 is different, and is what we considered to be a next-generation anti-infective, is that ALS-4 pursues an approach called anti-virulence. It's actually a very different from vancomycin, which is actually a bactericidal, ALS-4 is actually pursues what we called a virulence approach. So we -- it looks at disarming the bacteria by targeting some of these virulence factors causing the bacteria to be extremely resistant to some of our host immune systems. So by disabling these virulence factors, ALS-4 is able to effectively cause the bacteria to be susceptible to our own white blood cells attack. Now just very quickly, illustrating on Page 21, through administrating ALS-4, I actually causes and -- with increasing dose of ALS-4, it causes a decolorization of the bacteria, which you can visibly observe here in the slide. Now the reason for that is because the bacteria is surrounded and protected by a golden pigment, it's called staphyloxanthin. And it is this particular staphyloxanthin that's neutralizing a lot of the ROS attack brought about by our neutrophils. So by disabling the staphyloxanthin, it's able to render our white blood cells ROS attacks more effectively and more efficiently. Just as part of our today's announcement, we have conducted a further data -- further in vivo studies on our bacteremia mouse model. Here, you would see that actually it shows a significant reduction in bacterial count across major organs, relative to vancomycin as a control. Here it's depicted by our candidate, IM032. Now this is consistent with our previous results that we announced earlier in the year of the ability to reduce the bacterial count by almost 99.5% reduction through our non-lethal in vivo bacteremia model as well through the administration of ALS-4. Now what is more interesting here is the -- our -- we also did a further study -- in vivo study using a MRSA mouse skin wound infection model. Again, this is related data that we have announced today, applying ALS-4, comparing this head-to-head with 2 other major antibiotics, which is Mupirocin and Linezolid. And here, you demonstrate, on the left-hand side, IM032, which is a candidate for ALS-4, shows a statistically significant improvement in skin, and wound healing closure actually are up. This is actually up to over 60% in wound closure relative to the other 2 antibiotics here, which is Mupirocin, which is 43% and also Linezolid, which only achieved 48% wound closure. So this is actually our extremely promising results that our ALS-4, what we believe, will be able to be effective against multiple different indications of MRSA itself. All right. So maybe Dr. Weiss, if you're on the phone, would you be able to explain a little bit about the Claves platform?

Yes. Thank you, Darren. Can you hear me okay, Darren?

Yes. Yes, we can.

Excellent. So just wanted to say thank you for giving us opportunity to present our platform. I'm excited to join the team. As was mentioned earlier, our Claves platform is in the -- a very high interest area of the microbiome space. There's a lot of activity and investment dollars being spent in this space right now, and we have some very exciting results and a very exciting platform to share with you. One of our lead asset right now is CLS-1. And our lead approach is after -- is looking at a large unmet need in the treatment of obesity. And one of our differentiating factors is our mechanism of action. Right now, our mechanism is basically identifying active metabolites. Now the microbiome space is very important because there are hundreds, if not thousands, of bacterias live in our body throughout, specifically in our gut. Some good bacteria, some bad bacteria. A lot of our competitors are offering the microbiome with marginal success. Some of the success -- and the problem is, is that not any bacteria is -- can be labeled as purely good or purely bad. And there may be some downstream effects and safety effects that you alter the microbiome. What our approach is, is 180 degree different. We're not actually offering the microbiome space. We're offering active metabolites. We've identified active metabolites that are able to -- that are actually causing the downstream negative effects in our first -- [indiscernible] is for obesity, where we've developed a macromolecule that binds on to the active damaging metabolite and then leaching it out in the system without it being absorbed at all. Our differentiating factor from our competitors and be from a safety perspective is our clean, systemic and lack of any [indiscernible]. So basically what's happening is we created a macromolecule metabolite complex that then gets passed through the system and just removes from the body that [indiscernible] at all. If we could just move to the next slide. So what we've done, and we've shown in vivo, not just in vitro, in vivo differences in our approach. We've taken a mice and give him a high-fat diet, and then introduced our macromolecule into the system. Within 2 weeks, there was a statistically significant separation of treatment arms. One -- Group 1 had both the treatment and the sticky part of the macromolecule, which is just the high-fat diet and we treated high-fat diet with just the macromolecule without the sticky end. And so we saw a statistically significant loss of weight within the first 2 weeks of treatment. And that was our first -- go around with the first animal models in our animal studies. It gave us a lot of enthusiastic response to continue with this model, and then prepare for our IND-enabling thesis and eventually our IND process. If you can advance to the next slide.

Great. I think -- Herman, I think we're out of time. So I just want to maybe just to wrap up. So yes, thank you very much for everyone's time today. And again, the -- I think further news has been announced on the PR release today. So please also visit our website at ir@aptorumgroup.com as well. So thank you, Herman. Thank you, everyone.

Thank you. And yes, we are out of time. Thank you all for joining.