LeonaBio, Inc. (LONA) Earnings Call Transcript & Summary

Okay. Great. All right. Well, great. Thanks, everyone, for joining us this morning, and welcome to the team from Athira. We've got Mark Litton, CEO here. And maybe, Mark, just to start, could you provide a quick overview of Athira with the focus on what you see as key value drivers over the next, let's call it, 12 to 24 months?

Sure. First, thank you for having us. It's always a pleasure. And so for those of you that don't know Athira, Athira is a late-stage clinical development company focused really entirely on neuronal health and stopping neurodegeneration. We're taking sort of an interesting approach where we're enhancing a natural repair mechanism or the HGF system. And this is a system that is in our bodies every day that are repairing our nerve cells. And so it's called HGF, it's hepatocyte growth factor. It was discovered in the liver. It's been studied for over 3 decades and really is a nerve growth factor and/or neurotrophic where it's really very important. It's been shown to be very important in development, very important in survival and overall function of nerve cells. And at Athira, we spent considerable effort trying to, it's been a target, first of all, it's not so hard, not so easy to create therapeutics against it. If one injects it in your body, it lasts for minutes. And it's been tried and there's been gene therapy. And Athira, what we've been doing is trying to select molecules and we've identified molecules that selectively enhance this factor, but have all the right properties so that they cross the blood-brain barrier and get to the activity where you really want to enhance this repair mechanism. So we've been quite excited by spending time with the biology. The more we learn about this pathway in our molecules, we are getting very excited about. It's just an interesting approach to neurodegeneration because if one can stop these nerve cells from dying, we really believe that, that will translate into benefit. -- clinically. Our lead molecule, fosgonimeton, is a small molecule. It's given subcu daily. It is in a late-stage clinical trial in Alzheimer's, mild-to-moderate Alzheimer's. It's been in several hundred patients and some for over 2 years with our open-label extension. And currently, we're recruiting right now, and we're hopeful to have data in early 2024. And we have an additional molecule that we're working on, ATH-1105, it's a molecule that also enhances the biology, but it has slightly different properties in the sense that it's actually more peripheral when it comes to its pharmacokinetics. And we are pushing that forward and hopeful to get it into the clinic for ALS early next year.

Great. Let's talk a little bit about the decision to pursue Alzheimer's disease and maybe go a little deeper in terms of the role HGF/MET and something that targets that pathway could play in that indication?

Yes. So one of the aspects we're taking sort of, we're agnostic to what's causing the injury in Alzheimer's. because Alzheimer's, as you know, is a very complicated disease, similar to cancer where there's not just one cause for Alzheimer's. And our approach is, if we can help repair and restore and protect these nerve cells, we believe that we can have benefit using this HGF system.

Great. As you think about the design features, you mentioned the blood-brain barrier penetrance. Is there anything else that you think about when you think about the features of fosgo that helps ensure that it would be effective in Alzheimer's?

Yes. I mean this approach, right, is by enhancing this neurotrophic factor. Really, once the molecule enhances and the receptor and it does its job, it has sort of a multimodal approach so that there's neuroprotection, it shuts down neuroinflammation. And it really is a molecule that doesn't have to be present all the time. It just has to get to the cell and activate. And so we believe fosgo has all those properties.

Great. So today, you've primarily looked at it in Alzheimer's disease. You mentioned some patients are an open-label extension out to about 2 years. Can you just refresh us on the clinical data that you've seen to date?

Yes. So it's been a learning process. So we started out where in our Phase 1, when we gave fasgo, we saw a dramatic improvement of brain processing speed as measured by P300. Now this was fosgo given by itself, and it was fosgo at 40-milligram dose. And we then raised money, and we ran our Phase 2 ACT study. And what we learned with the Phase 2 ACT study is that when fosgo is given with donepezil, fosgo actually loses some of its beneficial effect. Now of course, this is post hoc analysis. But when we looked at fosgo by itself, it actually was having an improvement. And it was having an improvement in P300, so we repeated what we saw in the Phase 1. It was having an improvement in ADAS-Cog11 or cognition. We saw an improvement in the MMSE, right, which is another measure of cognition. And then we looked at biomarkers in the serum. And one of the factors that we saw is we saw an improvement in NfL, which is a measurement of neurodegeneration, that's gotten some headlines in the past. But we also saw with the biomarkers some reduction in neuroinflammation. And so essentially, all the flags were pointing in the right direction, meaning when fosgo was given by itself, it did have some beneficial effect, albeit small and albeit post hoc. So one of the things that we did was we then amended the protocol because we were recruiting at the time the LIFT study. And we amended the protocol to change the target population so that we just looked at fosgo by itself, not fosgo in combination. And we then, last fall, we did an interim analysis with an independent group who looked at the unblinded data, and it came back, we were in the green zone, we spent some time talking about the green zone. But we really believe that the results show promise because we were measuring both cognition and function with our primary endpoint, which we call GST. But we're hopeful that we will continue to see this improvement as we finish the trial.

Great. Let's talk a little bit more about the end points. So there was P300 latency. Maybe we can talk a little bit about why you've moved on from that. And then perhaps spend a bit of time on what GST means.

Sure. So again, P300 really is a measurement of brain processing speed. And what's really important is the psychometric measurements, ADAS-Cog11 for cognition, ADL is a measurement of function and independence. And so we've moved away from sort of a biomarker approach to actually measuring what is clinically meaningful. And our primary endpoint is a composite score, which we call GST. And it's a composite score of ADAS-Cog11 and ADL23.

Great. So one of the aspects and you mentioned this was that the drug seems to work better in the absence of cholinergic inhibitors. How do you think about the mechanism that leads to that result?

Yes. So I'd like to give credit to our Chief Scientific Officer, Kevin Church, who has spent a lot of time, as soon as we had this result, Kevin went back in the lab and essentially replicated what we saw in the clinic. So preclinically, he was able to show that when fosgo is given with donepezil, we lose our neuroprotection. We then looked at it in vivo in a model, and we saw that in the scopolamine model that when you combine them together, it also loses its beneficial effect. And again, so Kevin then started looking at, okay, well, what is behind this? And it turns out that fosgo and now this is in vitro, fosgo when given actually activates a neuroprotective pathway called AKT. AKT is responsible for the cell and its survival. And whether we were giving a toxic challenge of Abeta or glutamate or ALPS, fosgo would protect those cells and AKT was upregulated. Interestingly enough, when you then combine fosgo and donepezil, AKT is actually downregulated. And you don't get that neuroprotective effect. But then Kevin took it one step further and said, okay, what happens in that when you're being neuroprotective? And what he found and we just showed this at AAN is that a lot of these misfolded proteins, whether it's Abeta, whether it's tau, whether it's alpha-synuclein, whether it's TDP-43, actually get reduced after fosgo, and so we really believe and this is still a theory that we're helping remove the garbage from the cell and the cell can have better health essentially.

Great. Understood. So maybe expand upon, you mentioned there's the LIFT study that's ongoing. You've made some modifications. Let's just talk a little bit about what those modifications are and what we would expect to see next year.

Yes. So I mean one of the things, again, we changed the target population. So we're just looking at fosgo by itself. And one of the things that we were seeing in our open-label extension was when we looked at the ACT Phase 2 data, and we were looking at the 2 different doses between 40 and 70, we had a dropout rate on 40 of about 11%, 70 was almost double, up 26%. And we were seeing that same trend in the open-label extension because in the open-label extension, the physicians have the ability to, if it was not tolerable at 70, they could drop down to 40. And we were seeing that same trend. And as we were thinking about we're like, well, let's give it its best shot for LIFT, we dropped the 70 dose. We don't believe there's any difference between 40 and 70. It was just that there was more dropout in the 70.

Okay. And what are the primary endpoints for LIFT? How many patients? And how should we think about what success looks like there?

Yes. So primary endpoint is going to be GST, which is, as I mentioned, the composite score of ADAS-Cog11 and ADL. We are going to look at NfL as well. And then there's an assortment of biomarkers that we're also going to look at. But those are the 3, there's the primary endpoint and NfL is the key secondary endpoint. Sorry, there was one other part of the question.

We can go back. So how do you think about like what would be a success scenario?

Yes. Thank you. So success for us is really just hitting the primary endpoint. And we can hit primary endpoint, we believe that that's meaningful. We're going to learn from the study. And then so your next question is we believe we might have to run another trial too. But one of the things we're doing is we were granted a meeting with the FDA this summer. So we should get some guidance as to what is important to them. And now it will always be dependent on data, and we're going to have to see that. But really, success for us is just hitting the primary endpoint.

Yes, absolutely. So maybe let's talk a little bit about this FDA meeting. So as you approach regulators, what do you think about Is like the wish list of topics as well as what you're going to come out, understanding better?

Really, it's to get their assessment on our primary endpoint and on NfL and the way we're approaching this. And just to understand better what their thoughts are, right? So the FDA, right, in the last year or so has been instrumental in the Alzheimer's community with lecanemab and hopefully, donanemab coming as well. So we thought it was really timely to have a meeting with them, and we were very thankful that they granted the meeting.

Great. You mentioned potentially next step. So how do you think about what could come after results in this Phase 3 study?

So it's all dependent on results, right? And of course, if the results are really, really good, we will also push for accelerated approval because if the results are really good, there's a tremendous need to improve neuronal health in Alzheimer's. But it's quite likely, right? If you take the other side of it is that we might need another Phase 3 study that we need to do to confirm the results.

Okay. And how would you think about the design of a secondary study? And how many patients do you need? How long would it take?

It's hard to answer today without not seeing the data, but we'll have to see in terms of how many patients we need. The design hopefully, will be very similar to what we've done with LIFT.

Right. And we don't know everything about the study, but we do know some things around like the open-label extension enrollment, et cetera. So could you just provide us a bit of color on what you're seeing in terms of the trial around like how many patients are enrolling in open-label extension? And what have you heard around those?

Yes. I mean it still is, we've been very impressed with how many people are choosing to go to open label. We continue to be over 80% of people choosing to go on open label. And again, we've had people on for over 2 years. And we had some really interesting anecdotal people, we just extended our open-label extension because we felt it was important to continue to study the drug for longer than essentially 2 years. And so really, the experience that we've had is that just the tolerability, we see still some ISRs associated with the drug. But for the most part, the profile has been quite good.

Helpful. And then, I guess, when you talked about the idea of like not being on background cholinergics. How do you think about that as it relates to the market opportunity?

Yes. I think there's still tremendous need in the market. And one of the things that we see is in our trials as we're recruiting, we see people even coming in that are on donepezil. And so there's still an unmet need to help neurodegeneration in the Alzheimer's space. So in terms of the market itself, it's still a huge unmet need just by having fosgo by itself.

Great. And I guess, as you think about kind of like...

Let me make one more point, and the market is just going to get bigger. right? Really, as these new drugs come on board, there will be more diagnosis. People are now earlier coming into the clinic, and that will just increase the amount of patients.

Yes, that's a great point. Remind us where within the kind of like treatment paradigm of Alzheimer's disease, fosgo is most appropriate.

Well, right now, we're studying it in mild to moderate, but there's no reason why we couldn't go earlier. In fact, the more we learn about the biology, the more we're convinced that we should go earlier. So again, in terms of disease states, we're right in the sweet [ spot ], so to speak, is that roughly the market 85% of the market is in mild to moderate...

Let's zoom out for a second and talk about like the Alzheimer's space. There's been a lot of movement over the past couple of years. So when you look at what's going on, I guess, what are sort of things you're focused on as it relates to the, let's start with the regulatory landscape?

Well, I think the regulatory agency knew that how important this unmet need was, and it had been 20-plus years since memantine was approved. And there's been a lot of push right to lower Abeta and so the agency has, I think, shown flexibility in the way they're approaching it. But if you look at the data, the data is actually pretty sound that these antibodies do remove these plaques. And I think it sort of sets it up as sort of the baseline for now that we've removed these plaques that we can take different approaches. And when we're meeting with a group and who is one of these companies that have removing the Abeta, and they were like, okay, well, now let's focus on the next step, like what else can we do to improve what's going on. And I think that's where fosgo will play.

Okay. So I guess, as you think about like sequencing or combination therapies, where do you expect fosgo to fit relative to, as you mentioned, these Abeta?

Well, first and foremost, we believe, by itself in the mild to moderate space is a huge unmet need. That said, the more we learn about the biology and improving neuronal health with fosgo, we absolutely want to go earlier and perhaps combine it with these Abetas because there are patients now that have removed all their Abeta and are looking for something else. And so that's kind of might be our next foray as we grow fosgo. But first and foremost, we're focused on mild to moderate and our LIFT study.

Yes, understood. We talked a little bit about this earlier. But in terms of like the biomarkers that are at play here, you mentioned NfL, but can you walk us through some of the other biomarkers that you guys are monitoring and what they suggest about the activity of fosgo?

Yes. So let's not forget NfL is a pretty important biomarker. So right, it's neurofilament light. It's a measurement of essentially nerve cell death. And one of the things that we saw in our ACT study was that after fosgo, the NfL level was below their baseline, which is quite if we can repeat that, would be very beneficial. So that was the first biomarker that we were looking at. We looked at several neuroinflammation biomarkers, GFAP and YKL-40, which are standard biomarkers nerve inflammation, and we also saw a reduction of neuroinflammation. And we, of course, looked at the protein pathology of Abeta and P tau. So we're also following that because as I mentioned, we really believe that's important. If we have the ability to remove the garbage, so to speak, with these, that this would also be beneficial. So we were looking at both Abeta and P tau. And then there's an assortment of other biomarkers that we're considering.

Great. All right. So maybe we'll shift gears from Alzheimer's disease. You have other candidates in the portfolio. So let's just do an overview there.

So our next molecule that we're focused on is 1105. And as I mentioned, it also enhances the HGF system, and we're pursuing it into ALS next year. We recently had a poster at AAN, describing our results. We've been looking at 1105 in a very aggressive transgenic TDP-43 mouse model that mimics the ALS. In fact, TDP-43 and the misfolding of the protein is in roughly greater than 90% of ALS patients. And in this model, when we gave the animals 1105, what we saw was a dramatic improvement in survival and motor function, nerve function as well as weight loss. And we're hopeful that if that can translate into the clinic that would be a benefit for these patients.

Great. I think you mentioned a little bit earlier, but in terms of differences and similarities between the 2 assets, could you just remind us what those are?

Sure. I mean fosgo primarily has been designed to cross the blood-brain barrier in the brain and really focuses its properties there. In terms of peripheral exposure, 1105 is better. And I mean, in ALS, of course, the disruption is between the nerve and the muscle. So it's less about crossing the blood-brain barrier. And we believe that 1105 has these properties to actually get to that space in the body.

Great. As you think about kind of the development pathway in ALS, I guess what do you anticipate in terms of the sort of next steps?

Yes. I mean, we're just working right now to do that. We're involved in our pre-IND tox studies. But the goal would be to quickly do Phase 1 and then get some data in patients right after that in the Phase Ib and look at various aspects similar in an ALS study to biomarkers as well as function.

Understood. As you think about like the landscape in ALS and I think, similarly, the regulatory landscape, what are some of the things you're monitoring?

Yes. I still think there's an unmet need in ALS. And we, of course, are looking at how 1105 fit into that landscape. We believe the tofersen with their NfL data is encouraging because we also saw NfL reduction in our animal model. And we believe that 1105 could be on top of what standard of care is now.

Okay. Yes, as you think about kind of running a clinical study here and background therapy, how do you think about like the heterogeneous patient population as well as kind of allowance for other drugs in a study like that?

Well, we're still investigating it, how best to approach it. We've been looking at and interacting with thought leaders. There are groups that have put together consortiums to run trials. So that's a possibility where they already have their placebo and you're just an arm of the consortium. And I mean, the other approach is to do your normal sort of Phase 1b. But we have to go through the specifics, we haven't, we're not quite there yet.

Yes. So when should we expect an update from Athira as it relates to that program?

Yes. We're hopeful to start early next year, and we'll talk more about it early next year and really talk about our plan and why we're excited about 1105 in ALS.

Yes, great. You had started another study of fosgo in Parkinson's disease. So maybe just walk us through the latest on that program?

Yes, yes. So we still plan that we made a decision to focus entirely on Alzheimer's and ALS. But we have the study and it's a 20-plus studies in Parkinson's and it's going to be exploratory in nature. One of the things that our research group has shown is that in a preclinical model in Parkinson's, we demonstrated that we did improve motor function and for better or worse when the trial in Parkinson's was set up, it was not really designed to look at motor function. It was designed to look at cognition. And so we made the decision to say, okay, let's focus on Alzheimer's at the moment, but we will, later this year, go through our exploratory results and what we found in those handful of patients.

Okay. You've talked about discovery efforts, you talked about clinical development. How do you think about the balance between investing in your existing portfolio in terms of indication expansion versus discovery of new agents?

Yes. I mean right now, we're just very focused. We're very cost conscious about let's get data in the LIFT study and let's get 1105 into the clinic. So we've been focusing on that, but it has a lot of broader potential in terms of, again, we really believe this potential of neuronal health and hopefully stopping neurodegeneration can be applied in so many different diseases. And if one was, you could look at Alzheimer's disease, you can look at Parkinson's disease. If you take ALS, the 1105 program, it could be ALS, it could be frontotemporal dementia. So there's a broad range of stopping the neurodegeneration disease.

Great.

But we have to focus. And while we have exciting science preclinical, we're really focused clinically on Alzheimer's at the moment and getting the 1105 into...

That bring a question that's on everyone's mind is in terms of cash runway, so talk about...

Yes. So we ended the quarter with roughly $220 million in cash. We have plenty of cash to get us through the data points. But we're just in a hunker-down mode and in an execution mode at the moment.

Okay. So through the balance of this year, I guess, what should we expect to hear from Athira?

So this summer, we have our meeting with the FDA. We will update everyone on that. We will update everybody when we finish recruitment. We will hopefully update folks as we enter the clinic with 1105, could be early next year. And that will set up, of course, the data in 2024 for LIFT.

Okay. Great. And post LIFT, so that comes early 2024. It sounds like there's a couple of different options. But how do you think about like what the next steps would look like and how the company would run in the case of a positive outcome?

Yes. I mean I think we have to see where the data is, first of all, because there are different paths that we have to do, whether or not we need another study or not. But let's just take the conservative approach that we need another study. So we will plan another study, raise some money and then sort of focus on that study and getting more clinical data with 1105.

Okay. You mentioned more money. So how do you think about like sources of capital and what you think is appropriate for Athira?

Well, I'm hopeful that it's upon success that will be your sort of traditional pathway through equity. At the moment, we're not really considering that.

Yes, understood. In terms of Alzheimer's is a large indication, as you play it forward, let's say you do have success. Is Athira equipped to do the commercialization within Alzheimer's?

Yes, probably not. Alzheimer's is such a large indication that we'd probably need a partner realistically for that. So we probably will be having those conversations with potential partners. But we really believe that it fits quite well into the Alzheimer's space and really could be the next step after you've removed sort of Abeta improving your neuronal health might be fit quite nicely in a big armament from big pharma. And I think it would allow the program to expand in broader indications than we could do ourselves.

Yes, understood. In our final minute here, is there anything that you think you want to emphasize and make sure investors understand about the company that you're running?

Yes. I mean I just want to emphasize that we've learned a lot in these past sort of 12 months. And what we're learning is enhancing this HGF biology in the ways that we're doing it really has promise in the neurodegeneration field and we're just starting. And we're hopeful that all of what we're seeing preclinically translates into the clinic, rather soon.

Understood. Great. Well, that's all the questions that I have today. Thanks so much to Mark for joining us here [indiscernible] who's joining us this year-end on the webcast.

Thank you, Corinne. Always a pleasure.