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

Good afternoon everyone. And welcome to the 45th Annual Goldman Sachs Healthcare Conference. We're thrilled to be joined today by the team from Athira Pharma. And maybe we'll just start because I know there's also been some like leadership changes in the past year, et cetera, with an introduction of each of you and an overview of the company and pipeline, how about that.

Andrew Gengos, I'm Chief Financial Officer.

I'm Rachel Lenington, I'm Chief Operating Officer and Chief Development Officer.

I'm Javier San Martin, Chief Medical Officer, and I'm the new kid on the block. I joined a couple of weeks ago.

Yes, perfect. And who wants to provide an overview of the pipeline.

Rachel, why don't you go?

Yes, I can provide a brief overview. So at Athira, we're really taking a different approach for neurodegeneration. We're focused on a natural repair pathway that your body uses to take care of your nerve cells and to help injury within. And we're really focused on repair and protection and targeting that. In neurodegenerative diseases such as Alzheimer's or ALS, that shifts the balance, shift to neurotoxicity. And our small molecules target that and help to restore the balance and improve neuronal health and protect the neuron.

Maybe you could go a little bit more explicit in terms of the exact mechanism of action for fosgo just to kind of like get us started here.

Yes. No, great question. Fosgonimeton is our lead molecule. It's in Phase II/III Alzheimer's disease study. And it is focused on positively modulating the HGF neurotrophic signaling system, which really is something that helps to decrease inflammation, improve mitochondrial function and maintain neurons. And so this target we've shown in both preclinical and Phase I and Phase II studies to have both effects on pathology, the disease pathology, but also on clinical outcomes.

Do you want me to add a few things?

Yes.

Again, I'm new to this field and I'm fascinated about this. People ask, "Hey, this is not [ now ], what's the mechanism of action?" And when I start to read the history of this, HGF/MET is known for many, many years; it is really critical in prenatal development of the CNS and postnatal. It is located in many areas of the CNS, definitely in the [ hypocomplementemia ], definitely in the [ natal ] motor change, which I think is critical for ALS. So the idea of this concept working in neurodegenerative, I think, has been around for some time. The problem has been how to [ drive ] this pathway. And I think a lot of people tried in the past and couldn't make it. So I think the clever idea here is to create a small molecule that actually modulate positively this pathway. And the good news is you can measure that, and you can quantify that. And that's one of the methodology that the team at Athira use to say "Hey, what's the right molecule?" And I think they did that specifically for each indication and how to really quantify the magnitude of phosphorylation of the [ MS ] and how that transferring the [ cascade ] on the other cytokines of paraffin kinase subtypes that are related to neuron survival and survival in others tissues as well. So when you think about that and all the work that has been done, then I've been focusing more on the in vivo work. But the model is well recognized in injecting [ animal ] data in the brain of the rats and observe the [ animals ] in many different aspects. So they saw a clear decrease in inflammation with a typical [ inflammatory ] cytokines, IL-6, IL-1ß, TNF-alpha. But importantly, the one that is specific in the CNS like [ GPAP ], which we saw preclinically and clinically. The neuroprotection is also seen in the mitochondrial dysfunction. They're are very good assays to estimate the level of [ oxalates ] trace and mitochondrial function. In the end, mitochondrial dysfunction is the way that these cells die. So per cell function is the key [ mechanism ] by which cells will survive longer. [ Survival ] study also on [indiscernible] level has been demonstrated [indiscernible] in the context of the [indiscernible]. So that triggers the disease. It also prolongs survival and improve or increase the growth and length of the axons and neuron. So that -- again, it's all about [indiscernible] is this function in the neurons in the CNS. And I think back to, I think, Rachel's point, again, as a newcomer, I see the landscape in Alzheimer's disease, then you have a symptomatic stage of disease approach. You have the amyloid beta antibodies, which definitely the cause of this [ address ], the underlying trigger of the disease. But nothing is working -- nobody is working in the actual target tissue, which has the neurons. And that's how I got excited and joined the team and said, "Like, well, this is a gap." Mechanistically, it is attractive. And when I think about the disease and the clinical care and the health system, the antibodies are really interesting when you fast forward and say, "Well, how are you going to identify all these people with mild cognitive impairment, with mild disease? Are you going to screen across the board?" Well that would be easy to do in those who you can predict, the [indiscernible] well, you can use these. So when I put all that together, it's like, "Okay, we need to think about clinical practice." And clinical practices, you identify the patients most of the time, but they already have some level of disease, call it mild or moderate. And that's why we want to play where the unmet medical need is greater, where I think the sense of urgency is also different. And with the mechanism of action that at this point, we have quite robust preclinical level of evidence, and we're building the clinical piece. So the [ ACT ] study, eventually you want to talk about that. I think it's part of the evidence that support our [ commission ] that this has a future.

Yes. So beyond the mechanism of action, and you mentioned like that it's a small molecule. But in terms of other design features that have been optimized for Alzheimer's disease patients, anything else in particular that you'd call out with respect to the design of fosgo?

Well, fosgo was really designed to go to the CNS. And I think that is what makes it unique from our other pipeline molecules that -- for instance, ATH-1105, which we just got into the clinic this week, we're very excited about that, and that is more targeted to both the CNS and the periphery, which is important in ALS. So fosgo is really targeted to get past the blood-brain barrier and get to the target tissue.

Great. So today, it's primarily evaluated, obviously, in Alzheimer's disease. Maybe just refresh us on the clinical data set that you have talked about to date.

Sure. So I'll start with the ACT trial because that's the larger study we did so far, and it's in the target patient population, so patients with mild/moderate Alzheimer's disease. In that study, we enrolled 77 patients, about 40% of them were in cholinesterase inhibitor, the other 50 to 60 were not, randomized to 3 treatment groups and key endpoints, clinical endpoints called 11 [ ADL 23 ], and then all the biomarkers. And what we observed, particularly in those patients specifically, in those patients who were not on cholinesterase inhibitors; a significant and clear change and improvement in commission in [indiscernible]. We also saw across essentially all the biomarkers, a positive trend called all in the right direction, the inflammatory, the neurodegenerative, the NfL specifically and the protein burden [ dipetala ] and amyloid ß 42/40. So we're seeing all 4 biomarkers going in the right direction, cognition going the right direction. This is in 6 months and in a small sample size. And you probably know because this was presented publicly that the totality of the data in this study when we don't exclude those patients on cholinesterase inhibitors, we didn't see quite this magnitude of response. So that triggered a lot of work to really understand where that interaction happened. And I think the team at Athira came out with a number of evidence to say there is reason to believe that this interaction is possible, real. Now, we have a large experiment ongoing to confirm that, which is the LIFT trial that will read very soon. But based on the results of that study, we decided to amend the LIFT trial and include patients that were not on cholinesterase inhibitors, moving forward. And so that's, I think, the key component of the more recent clinical data.

Yes. You alluded to it, but maybe you could expand a little bit more on the specific mechanism of action that you think probably drives the lack of activity in patients on background cholinergic.

So there are -- a component of this -- that is preclinical evidence. And there is a component of this, I think, in a small sample side, maybe a confounding factor clinically as well. So what happen -- who are those patients who are on therapy to begin with? How do they differ from those who are not? And second, the concomitant background therapy of this treatment may somehow mask the improvement in the clinical benefit of -- say, with a new intervention. Like I said, we're talking about maybe 20 patients in that group. So we're talking about a relatively small group. Now with regard to the underlying mechanism by which the interaction can happen, do you remember any of the key features there?

Yes. I think the key features, the things that we learned is that it's a pharmacodynamic interaction. So it's not a typical PK interaction, it's what we're hypothesizing. And really because this is a signaling pathway and you can -- you want to regulate that. It could be that -- what we've discovered is that when you are hitting some of these pathways at the same time that you're compensating by shutting it down. And so that's what we've been able to uncover in a few of our preclinical experiments. And as Javier said, in the second half of this year, we're going to have a really good answer about what it means clinically because we have the LIFT-AD trial, which we're very excited about, is coming and where we're aiming for the fall to have those results. And it's a large study. It's much larger than what we have in the ACT study, and we'll have about 315 patients in the primary analysis population. So this is the group of patients who are not on background cholinergics. But we'll also have -- there'll be upwards of 180 to 200 patients who are on the background therapy that were included in the study and completed the study before we made that change. So we'll have really good information about how this drug works and in what settings and to who it works best in.

Okay. Obviously, the Phase II ACT data didn't hit on the primary endpoint, which is P300, but you've since done a number of analyses, including kind of taking a look at the data early. Maybe you could walk through the most important things that gave you confidence to continue moving forward with the LIFT study.

Well, so I think it's the totality of the data when you see the ACT trial, excluding the cholinesterase inhibitor [ such that ] which almost consistently all endpoints when the regulation I am now referring to the P300, but specifically to commission and to all 4 biomarkers. So I think it's the totality rate. They say how many times you see every single endpoint going in the right direction. And this is about 17 patients on treatment. So it's a small sample size, but I think that was what we felt very confident about it. And I don't know how much the [ SHAPE ] study is being presented, but that's a different type of dementia. And the cognition level of improvement was very similar despite, like I say, it was Parkinson's disease and Lewy body dementia, but the severity was similar and the [ magnitude ] of improvement. So there, you have 2 studies that show a movement in commission and in biomarkers of the similar type.

The interim analysis of LIFT was also a key component because we did see all of that in the ACT study. But obviously, we wanted to understand if we should continue. And so we enabled an interim analysis, an unblinded interim analysis by an independent data monitoring committee. And we basically asked both a futility and an efficacy question to determine if it was futile to continue or if we should -- and if we did continue, what would our sample size need to be to have a statistically significant and robust result. And so we performed that. We passed both futility, and we were told to add up to 150 patients, additional patients to be able to be well powered to see the global statistical test, which is a combination of both ADAS-Cog-11 and [ ADL 23 ], which are the FDA-mandated endpoints. So with the combination of those two things, statistically significant is what we're aiming for with LIFT. And that interim analysis gave us a great deal of confidence.

Okay. Maybe we can talk a little bit then on the Phase III trial design kind of as it stands now. And I know you're going to spend some time on this in like -- for a rundown next week. Maybe let's start with the endpoint and global statistical tests. At a high level, what is that? And how is it measured?

Sure. So first of all, this is one way to do something that many people have done before. So as an example, on both antibodies therapeutic development programs on Phase II, they used a version of a GST. They call integrated. But essentially what they did is integrate both major clinical outcomes. The cognition of Cog-11 or Cog-13, I think, was in that case, an [ ADL 23 ]. So we're doing something very similar. What I think is very interesting and important about this is, in order for you to hit that endpoint, you should have positive results in both components of that composite endpoint Cog-11 and [ ADL ]. So it's not possible that you have a good result in the other and the opposite in -- good result in one and the opposite in the other and you will hit the statistical power value on the GST. So I think that's important because -- it's important to recognize that. High level, the way they do that is they normalize the data to see scores and then -- because one score improvement is increased and the other improvement is decreased on the value, so they need to normalize to come back -- to come out with one single value. So I think it's very simple to do that with the individual patients, and then you aggregate the data. And [ Susan Henricks ] will explain this in a lot more detail next week. But what's the relevance of this is that you have one number with statistical power and p-value that represent the global aspect of this disease. And I think that's what get people excited. What Susan is excited about is this is a way in her mind, and she would describe this better how this is a way to assess disease modifying both by the result and the concept of time to decline. And so she's very excited about that. I think most people in the field are excited about that. Even, I think, [ Billy ] used that concept in Advisory Committee a couple of days ago. So GST, again, is a way to aggregate both psychometric test, they measure different things. But they should go in the right direction in order for you to have a successful drug.

Okay. And I guess, can you remind us now that you've got kind of the increased size, et cetera, what some of the powering assumptions are like kind of what you're powered to show in terms of difference on GST?

Yes. So the value number in GST is about 3, right, the unit. But I think what matters is the effect size within each psychometric test. And that's, again, as a newcomer for me, like GST is a great way to aggregate 2 psychometric scales. But when I look at the data and I explained to clinicians, I think I would like to say...

That was clinically meaningful.

Yes. This is the effect size in Cog-11. You have a point of reference based on the antibodies. I think we think that we may have more than 3 points, I think, before we were -- 4 points difference is what we were thinking.

Well, we saw about a 3-point difference in the ACT on ADAS-Cog, and we -- and almost 2 on [ ADL ]. And so we're powered. But also when you think about what sort of standard of care, about 2.5 on ADAS-Cog is pretty common with the cholinergics. And this study is in a different patient population. So I think it's really important to think about this in the context of the patient population that these are patients who are more advanced in their disease than what we've been seeing with the antibodies. They're progressing more quickly. The study is only 6 months long, that's enough to see a decline and a change. But we also have pretty strong belief that given the biology and given the way that we expect our mechanism to work that this could be a very important medicine longer term. One thing we also have going that we haven't talked about yet is an open-label extension. And that open-label extension was actually recently extended by another 12 months, basically because a lot of the patients and physicians, caregivers were saying, "Hey, we like this, we want to stay on it." And also this is a long-term disease. It's a disease you live with for a long time. And being able to understand the effects over the long haul is really important.

Can you remind us the cadence of patients that has to go into the open label extension now? And maybe how many are still on at 1 year or 2 years or whatever kind of data you can provide quantitatively?

So about -- in total, about 80% of patients are ongoing in the extension, which I think is huge for the daily subcu injection. So that gives us a really good sense of something is moving, people are feeling something. These studies start enrollment in 2020.

2020.

2020. So the distribution of time in an open label is very wide, and we need to quantify that better. And actually next week, we will talk about that, but it's an important question. I think the point there is we're not seeing any obvious [ safety finding ] because otherwise, it will show that. We're seeing people that are comfortable receiving this drug subcutaneously daily for a very long period of time. That also give me a sense of is it feasible clinically in real-life because an open label looks like a real-life situation. And maybe there is really a motivation to do that, there's is something going on. So we will show in more detail the exposure by [ year ] to get a sense of how much data we have to talk about this long-term, sustained -- and we will have that data by the end of the year, right, the next [ cut ] of the open label setting. We're excited also to see what will happen with those patients. We're measuring cognition, we're measuring biomarkers. So of course, you don't have a control group, but I think there are many ways to put in context that kind of data.

So you talked about a number of the biomarkers. But maybe you could expand a little bit on the blood-based biomarkers that you're using, that you think are most predictive and the role that they'll play in terms of understanding and interpreting the data we get later this year.

Yes. The first one I wanted to mention is the GFAP, which, I think, is a very unique situation that this is a biomarker related to brain inflammation. And again, as I was searching about it, there is a disease that is caused by the excess of this biomarker -- or the cytokine, sorry, biomarker. And in that case, it's a cytokine. It's super interesting. That's a proinflammatory disease, and it responds well to steroids. But the hallmark of the disease is the elevation of GFAP. So that would be the first one. I think it's easy to put in context, it's easy to connect to the underlying pathophysiology of Alzheimer's disease. And we have preclinical data to the translation. So that, I think, is one of the key ones. The NfL is exciting because it's been recognizing another disease, of course, ALS. But I think it's a common biomarker of any neurodegenerative disease. Of course, it's not fully validated in Alzheimer's, but in many of us and other companies and other academic groups are very interesting to go there and eventually be useful. So that speaks specifically to are neurons dying or are they surviving. And then the 2 others or 3 around [ pathology ], the other one, I think, will be critical to say, well, is this intervention that is not directly to the [indiscernible] therapy by improving cell function and autophagy can decrease the protein. So we're measuring the P-tau217, 181 and then amyloid ß 42/40. So the 3 more classic ones, we're measuring. And I think if we see positively result that, it is a unique feature. We know an antibody is sort of the amyloid protein. We're doing something within the neuron and the glia tissue that can help deal with the burden of protein. And by that -- and that is one of the mechanism by which we increase survival and function of the neurons. So I think that's what got me excited.

I think the biomarkers are going to be very relevant. These biomarkers are what everyone is testing. The -- I think they're moving towards diagnosis using those biomarkers. We're not there quite yet, but I think these are all going to be able to help explain the treatment effect and how and which -- how and why we are improving cognition and function is really working underneath the underlying disease.

Which is -- sorry, that's the key point, I guess, that I didn't quite say. When I think about disease modifying, yes, I know people like to think about the antibody and I think with the antibody to remove the [ insult ]. What happened here is try to help the brain to survive and function better. So I think that has really defined what's disease modifying agent, in my mind.

So as you think about potentially positive data at the end of this year, what are the next steps that have to come after that in terms of meeting with regulators, potentially registrational path? How are you thinking through kind of the multiple options that will be ahead of you if the data looks good?

Sure. Yes. So we're planning for success. As you say, we're going to have data in the next few months. We're going to be ready to kick off this next regulatory interaction, for which we will need to present all this data, make the case. We're working on really -- in every single aspect that would be necessary to enable the registrational Phase III study. And go to the agency, they find the population, all the features of the study design, they find the sample size, whether we have any finding that help us to, for example, the cholinesterase inhibitor, yes or no. How about the [ A4E4 ] mutations [indiscernible] carriers? So I think all that will help us to define the Phase III program. What I feel comfortable now is that the study as is -- it will enable that. So we have the full tox package to do that. We have the [ CMC ] component to kick off a Phase III. And we're going to have a [ 540 ] Phase II/III study that I think will answer all of these questions. And I compare -- I did the exercise to go back to the antibody Phase II program. And as a therapeutic dose, we have almost twice as many patients. So I'm very comfortable that this study will answer the question. And by doing that, I think it will serve as the foundation for the Phase III program.

Okay. So in the past, I think we talked about like optionality of going straight to regulators and asking for approval versus like having to run additional Phase III. Do you have more visibility then on that at this stage or is that so...

I think there's -- look, it's still data dependent, but you've got to think about the safety requirements in a population like this, right? And we've seen this with the antibodies with Lilly and Eisai. And those recent approvals, I mean they had thousands of patients. So I think we're being realistic about that. But we're measuring all the right things. So could this be part of the registrational package?

For the population as a whole, I think what Rachel said is absolutely right. But the data will tell us how [ and why ] we see a differentiated effect, more rapid differentiation between placebo and treatment in the [ A4E4 ]. That's where the unmet need is incredible because there are no treatments for that. And this is hypothetical, right? If something like that happens, I'll be the first one, I'm coming from the rare disease field to say, can we make this as a subgroup and have a clinical program in parallel to the large indication that could be shorter, faster and so forth. So I think we haven't got into the detail about that. But it gets us excited to think about wait a minute, if something like that happened that you can narrow the population initially while you're doing the big picture in parallel, can take us to the market earlier, that's something that I think the FDA will always be hoping to think about it.

In terms of just market sizing, obviously, Alzheimer's is large, we all know that. But like as you think about stratifying the market for patients that would be most appropriate for this kind of therapy, I guess, like what are the numbers around that, that you can provide?

Well, so it's really interesting. I mean 2.1 million people in the United States are getting prescriptions for -- in the mild to moderate space or treatment eligible for that. I mean 6 million overall, there's earlier-stage disease. But in mild to moderate, it's where 81% of the patients are being diagnosed. So it is a large, large market. And I know if you say, "Well, okay, if they can't take cholinergic, that's the standard of care, what's that going to do to your market?" Well, there's not a lot of options in this disease. I mean people are taking those medicines earlier. They're still declining, they're still dying. And having something new, offering something new that works very differently can really fill a gap in the therapeutic space and in the treatment options for patients and their caregivers and for doctors because they really have had limited tools.

I know you've seen what you've discussed in terms of the combination with cholinergics. But in terms of post-cholinergic patient population, have you seen the same kind of negative effect on the drug's activity?

People who discontinue?

Yes, if you've had prior cholinergic, does that impact your ability to treated with...

Well, this is -- well, I think we're going to learn this on [ belief ]. The data is collected to answer the question whether people who used in the past, how they would respond. So...

They have a very short half-life. So I would -- there's no reason to expect that they would have any effect there.

Okay. Maybe moving on briefly to the ALS program because I know you announced first patient in this week. In that, I guess, first, the drug has got the similar pathway that it's targeting [indiscernible], but there are some differences. What are the key differences between the 2 programs? And why does it matter for ALS patients?

Well, one of the key differences is it's oral. And it's our next-generation HGF/MET positive modulator. So we're excited about that, some more advanced chemistry. But also, it is more targeted at the periphery and really getting at that neuromuscular junction, which is an area where that is a really important part of the ALS pathology.

And I think what is interesting, just one comment about the preclinical program, is you're right, most of the experiments provide similar results or neurodegeneration, neuroprotection, anti-inflammatory. But what I think is impressive, at least for me, as a newcomer, we have the survival studies in the ALS model. What they clearly show is a benefit in survival. And when we present this to the ALS Association about a month ago, giving -- asking for feedback and insights, and we didn't present that as a [ prime ] moment. It was like this is the presentation that when we put on that slide, they were like, "Oh, this is not a usual picture." So this is really relevant, and we're excited about it. It changed the dynamic of that conversation, I saw when we presented that data. So the level of [indiscernible], I think, is in good place.

Very strong. And also, we have NfL data. And we know in ALS that NfL, at least in the SOD1 construct, is -- was able to support approval. So we think there's a really good opportunity for 1105 to be -- have an accelerated development pathway, given the rare disease. Given how challenging it is, now we know the bar is high. But the unmet need is also high. And our mechanism might actually be quite well tuned for the needs in ALS.

Okay. In terms of then now that the trial is up and running, you've got patients, can you talk to us about the trial design?

So we'll have volunteers right now. That's what we are doing this SAD and MAD. We're already drafting the amendment, I guess, of this study to include patients next year. So that's going to happen once we are clear on the SAD and MAD. And where you've seen a combination of the tofersen NfL data with our preclinical data and try to model that to say, let's try to do a Phase Ib study on patients large enough to at least really have a signal in the NfLs. So I think that's what the value will be to say if you got to that point, now you will be ready for a Phase II/III type of program. So it's one of that moment that you do the investment to -- and ask patients to take the risk to get into an early program, make sure that you do it right and large enough that you will answer the question now.

In terms of the endpoint and time that will take to show a change on things like [indiscernible], how long will that Phase I be in terms of patients staying on therapy?

We think that about 3 months is probably about right. When you look at the [ third ] one, the -- maybe it's going to be 3 to 4 or 5 months, but it's in that range that we expect to see difference. But talking to the association and so forth, it won't be like a 3-month study. The study will continue patients with transition. So I will envision a 6 months placebo control and then crossover, I guess, the ionic, biogenic example and so on, it's a good point of reference to start the program.

Okay. Understood. So maybe we can start to see kind of data from patients as early as towards the end of next year, is that right? Okay [Audio Gap] today on the cash runway get you in here, [Audio Gap] what's embedded in that guidance?

Yes. So we ended the first quarter with $122 million, and that's certainly more than enough to get to the other side of the LIFT results that we're expecting, we're targeting in the fall of this year. The more exciting question is how we -- because we're bullish. We think we're going to have a positive trial. And we think what a positive trial will do is get proof of concept not only in the Alzheimer's setting, but in the mechanism of modulating HGF. And if that were to occur, we want to -- in parallel rather than one drug at a time, we want to try to address multiple indications, whether that's Parkinson's, FTD, ALS, there are others. And so to do that, we need a lot more money. And we want to wait and raise capital [Audio Gap] LIFT outcome. So we don't need capital now. Our runway is more than enough to get beyond LIFT, but we are thinking through financing scenarios in order to pursue that larger vision.

Right, recognizing that on this side of the table, we have to think about both sets of outcomes. I guess, depending that it doesn't look as you would like to see in terms of success, can you also get through the patient data that you're talking about with ALS towards the end of 2025?

Yes. I mean we thought through scenarios like that. I'd argue that they're less likely than the positive ones, but I'll answer your question. We don't have a very good idea of what the design of the patient ALS trial component will look like after the single ascending and multiple ascending dose. So if you just kind of take a typical design, we probably need more capital to get to the other side of patients. But certainly, we have enough capital to get through the SAD/MAD and to contemplate starting. The other thing that I would point out is there's a lot of pharmaceutical company interest in that ALS program. So we've been promoting it in the sense of, "Hey, do you want to learn about this program?" We haven't been actively looking for a partner [Technical Difficulty] hear from those conversations that we could partner it if we needed to do that as a way to access the capital to complete the patient trial. I don't anticipate doing that, but it's an option for us.

Okay. Great. Well, with that, I think we're out of time. Thank you so much for joining us today, everyone. And thanks everybody for joining us here on the webcast.

Thank you.

Thank you, and nice to meet you.