Avacta Group Plc (AVCT) Earnings Call Transcript & Summary

Hello and welcome to another podcast by the Peel Hunt Healthcare team. I'm Leolie and today, we will be speaking with Dr. Chris Coughlin, CEO of Avacta, about the recent updates to Avacta's pipeline.

Hi Chris and welcome back. Avacta has certainly been very busy since we last spoke about the Phase I data from AVA6000 with 2 new novel preclinical assets recently announced. Firstly, we have AVA6103. Could you give us a brief overview of this therapeutic?

Leolie , thanks for having me again. Happy to have a conversation. Let's take a precision medicine apart and take a look at the different components. So first, we talk about these as peptide drug conjugates. The peptide is the key part. We refer to it as a micropeptide. It's only 2 amino acids and a chemistry cap that's attached. And then that entire peptide, micropeptide is actually attached then to an active anticancer drug. There's 3 key points to mention about this precision peptide that we use to mask the drugs within the bloodstream so that they're not visible to normal cells. The first is, our peptide binds to FAP in the tumor microenvironment. It's then cleaved by FAP in the tumor microenvironment. These 2 together lead to the release of the active drug right there in the tumor where it's supposed to be. Importantly, that peptide, once it's released, isn't visible to the immune system. I mentioned it's a micropeptide. It's only 2 amino acids. And so it's too small to be an epitope. It's too small to be considered by the immune system to be a foreign protein. Other ADCs, other peptide drug conjugates, these peptides that are larger would be subject to these, not true with preCISION. And so we avoid a series of key toxicities, the immune-based toxicities with this peptide. Now I mentioned it's a mask. The peptide that we attach to the drug now prevents that drug from entering normal cells. So it's going to prevent the toxicities and again, release the drug right in the tumor microenvironment. The second part of the new molecule, 6103, is the active drug. We've chosen exatecan. Why? AVA6000, as you mentioned, we've seen some nice activity in the clinic. We've learned a lot about preCISION through that clinical trial. We've seen that with AVA6000, it's key that the tumor types that we're targeting are sensitive to the drug. So sensitivity to doxorubicin is critically important for us. We're also looking for settings with high unmet need, settings with FAP overexpression. And topoisomerase I inhibition is a key mechanism of action right now in oncology. So exatecan was a good choice for us for 3 reasons. First, exatecan is about the most potent topo I inhibitor out there. It has been in patients through a number of Phase II trials. And so we know the safety profile and we know that there is a tremendous amount that we can do to improve it. The second reason is a cousin, let's say, of exatecan, deruxtecan has been a highly successful ADC warhead. And so we know that there are several tumor types quite sensitive to this. But again, they're limited by their targeting modality. So let's talk about in HER2, highly potent topo I limited by HER2 expression. FAP is a bit broader and is going to allow us to move this into a number of different diseases. I mentioned there's 3. The third one, exatecan failed in the clinic for 2 reasons and preCISION can fix both of them. The first is that it has very challenging therapeutic index. We've mentioned about half of the patients that receive standard dose doxorubicin have severe neutropenia. At doses that were effective with exatecan, 90% of patients with severe neutropenia. So a very challenging therapeutic index. But the second problem is that it has a PK liability. It only has a half-life when it's infused through the veins of 9 hours. Doxorubicin is 35 hours. So we're going to have to fix that. And so the key point here, with the chemistry gains that we've made, preCISION can now create a sustained release mechanism. That's how we can now direct the therapy into the tumor, sustained release, in parallel keeping it out of the bloodstream. So we can fix both of those problems with exatecan. So gains in the peptide and important parts of the peptide. And we've now done a really careful look at what that next warhead that we want to look at. So we're excited about 6103 moving into the clinic.

AVA6103 is currently in preclinical IND-enabling studies. Could you tell us a little more about the future plans for this asset?

Sure. So what this stage of development represents is that there are essentially 3 things that we do in the next stage for AVA6103. The first is, we have to get ready for the clinical trial in terms of manufacturing. So the way that we make it for the preclinical studies is very different than the way that we have to make it according to good manufacturing practices for the clinic. That can take some time to get it right. And so those studies have just kicked off for AVA6103. The second is, we now move to more intense pharmacology but also get started on another aspect before the clinical trial, which is the toxicology and understanding, really predicting, using different models, what are the doses that we're going to be using in patients. We have the clinical trials with exatecan to guide us. And so understanding where we are in terms of the toxicity, the MTD, the maximum tolerated dose that is observed across species is going to be critically important for us to predict what is that dose that we're going to want to use in patients. The third aspect is that as we get both of those, the manufacturing, the toxicology and the pharmacology ready, we're now prepping for our conversations coming up with the health authorities. So a common thought or a common misconception is that we just submit to the agencies, not true. We can actually have conversations. The FDA has an entire program called the pre-IND, where we can have conversation before. It allows us to do an early presentation of the mechanism of action, the pharmacology, the early days of toxicology and we give them a draft of the trial and we have a collaborative conversation about this. All of these aspects, those 3 that I mentioned, can take a little bit over a year before hitting go on manufacturing and really being ready to file that IND. Again, we work collaboratively with the health authorities on approving and then opening the trial in the U.S. Similarly, we will work with MHRA to open the trial in the U.K. It is important to note, though, that these agencies are independent. They can have different time lines. And so we will get going as soon as we can but looking forward to the next chapter, the IND-enabling studies for AVA6103.

Thank you. You briefly mentioned topoisomerase I inhibitors. So when AVA6103 does eventually reach the clinic, which cancers could it be used in?

That's a great question. So there are hints that we can take from the clinical development of a number of topo I inhibitors. There are some that are on the market, topotecan, irinotecan. These are much less potent than exatecan but are used pretty frequently in clinical oncology. Tracking for this trial, if you take a look at FAP expression and take a look at topo I sensitivity, there's a large number of diseases that we can think about. And this is really where we're going to see the benefit of our collaboration with Tempus. And so in this project that we've just recently announced and recently kicked off, together with the data scientists and the statisticians at Tempus, we are accessing their Lens platform. This is a database that includes data from over 200,000 patients that have been treated. It has over 7 million data points. So it's not just information about the tumor, expression in the tumor. There's clinical data. There is a wealth of information in this database. What this is allowing us to do is look collaboratively and very quickly using their AI engines at genes that are predicted to be sensitive for tumors, that are sensitive to topo I but also it allows us to compare within that database, the FAP expression. And so using this AI tool and this tremendous wealth of data that we have within Tempus, it's going to allow us then to take a look across all of these disease settings, spit out essentially where are those diseases where we would predict for topo sensitivity and FAP overexpression. And to be honest with you, the other way to do this, if we don't leverage that AI database, is an empiric look at multiple different tumors within the Phase I. That takes a long time and it takes a lot of patients to be treated in a Phase I. We've seen that a bit with AVA6000. We looked across a number of different disease settings. Not all of them were sensitive to the mechanism with the high degree of FAP. What we're really excited about in Tempus is sort of really accelerate our drug development of 6103 and enter the clinic with a high probability of success in a few -- in a small subset of tumor types where we would -- where it would be sort of the best guess as to these would be the tumor types that would be the most sensitive, again, informed by that Tempus collaboration.

And then the second new preclinical asset is AVA7100. And this one is super exciting, creating a new type of therapeutic called an Affimer drug conjugate. Could you tell us more about this?

So the Affimer, let's break this one down as well. The Affimer has a few advantages over an antibody. It is based on a human protein. So Stefin A is the scaffold. It's much smaller than an antibody. We don't need to make an acceptable drug conjugate. We don't need all the bells and whistles in the large molecule of the antibody. We want the binding domains and we want places where we can attach our drug. And so the Affimer was sort of best of all worlds in that we could insert the binding domains. It's very small compared to an antibody. Even an Affimer dimer is still 1/5 of the size of an antibody. So will easily fix that tumor penetration issue. Our scientists have been able to engineer into that molecule 4 different cysteines. So with that, we can now leverage a sort of highly site-specific conjugation methods that have been developed in the ADC field. And we've also developed the chemistry of our peptide, our preCISION peptide in that we're now able to attach one end of the peptide to the Affimer through that cysteine maleimide conjugation and the other end can be attached to the warhead. So now we can take that preCISION peptide and essentially use it as the linker in the ADC or in the Affimer DC, the FDC as we call them here. We've chosen with our first program, a FAP-directed or a FAP-binder Affimer drug conjugate for a couple of reasons. The first is, is that we think the Affimer with binding affinities that are very similar to antibodies, even more potent than antibodies in some of our iterations. But we can now attach the Affimer drug conjugate to FAP on the cell and the FAP adjacent to it or the FAP on a neighboring cell can now cleave the peptide drug conjugate and now release the warhead. Where we think this is going to be a really important mechanism is going to be in FAP low tumors. In the last question, where we talked about our Tempus project, one of the things that we're excited about is that Tempus can use different cut points and use different ways of slicing and dicing and looking at the expression. While it is sort of a smear that's high, low, we can actually create an understanding of tumor types where there are FAP low populations, FAP-POP, so the more heterogeneous diseases. This is where we really think that this mechanism, the FAP Affimer drug conjugate will have an important role to play. It's going to essentially slow the drug down within the tumor and allow the low level of FAP that fighting chance to cleave the drug. We think this is going to open up a number of different diseases where we don't see that are extremely high level, those more heterogeneous expression patterns of FAP. So opening up a whole new avenue of solid tumor indications for us.

Thank you for this, Chris. It seems like Avacta definitely has some promising milestones on the horizon. Finally, what in particular, excites you about where Avacta will be in the next 12 months?

So I think there's 2 things really. The first is FAP-enabled therapies, this is a target that, in the oncology field, we've been looking at for quite a long time. We've looked at small molecules, bispecifics, ADCs. There have been multiple approaches. Not all of them have had efficacy. And I get asked a lot, what is the difference about the Avacta approach? What is the difference with preCISION? Targeting the stroma here, the tumor microenvironment, it isn't as straightforward as targeting tumor cells. However, the approaches like preCISION that leverage the bystander effect, so not only are we directing the therapy to the tumor -- to the tumor microenvironment, to the stroma but we're actually leveraging the bystander effect. The bystander effect, meaning that, that therapeutic drug, the radioligand is going to be able to attack the tumor cells and not just the stroma. That's where I really think we're going to see a gain in these approaches of targeting the stroma, targeting the tumor microenvironment. And that's what's so different about the Avacta approach. I mentioned radiotherapeutics. It's another approach that has been used with FAP and is seeing some nice activity. But again, it's back to that bystander effect and we're perfecting that right now at Avacta. And I'm most excited about preCISION. We have -- honestly, we've got 10 years left on our foundational IP. We've got 10 more years to make improvements in this, generating new IP, generating new know-how. We have found, as we just reported at Science Day and in Barcelona at the triple meeting, we've got new approaches to different warheads. We're able to now attach even more potent warheads. That's the gains that we've seen with our exatecan program, new options. What I'll say is, stay tuned. Avacta is really just getting started. We are understanding so much more about FAP, about how to target the tumor microenvironment, about our foundational IP, our preCISION platform. And with our new rebranding, we're delivering hope but we're delivering hope without compromise. And that's really the foundation of preCISION, shielding normal tissues, delivering directly to the tumor microenvironment. So we've got a whole new chapter in front of us and we're just getting started.

Amazing. Well, we certainly look forward to seeing where Avacta will be in the future. Thank you so much for your time, Chris and it was wonderful to have you.

Great to talk to you again. Thanks for having me.