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

Good afternoon, and welcome to the Athira Pharma conference call. [Operator Instructions] At this time, I will now hand the call over to Julie Rathbun, Head of Investor and Public Relations at Athira. Please go ahead.

Thank you. Good afternoon, and thank you for joining us today. Earlier today, Athira issued a press release announcing top line results from the LIFT-AD trial. This press release can be found on the News and Investors section of the company's website. Before we begin, I'd like to remind you that during this call, management will make forward-looking statements, including statements about Athira's future business and development plans, expectations regarding the potential efficacy and commercial potential of Athira's product candidates, the anticipated reporting of data, the potential learnings from preclinical studies and other nonclinical data, the LIFT-AD trial and their ability to inform and improve clinical -- future clinical development plans and Athira's ability to advance its product candidates into later stages of development. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described here and from time to time in our SEC filings. Our results may differ materially from those projected on today's call, and we undertake no obligation to update statements regarding the future or to conform these statements in relation to actual results unless required by law. Joining us on today's call is the Athira management team, including Mark Litton, Chief Executive Officer; and Dr. Javier San Martin, Chief Medical Officer of Athira; Rachel Lenington, Chief Operating Officer and Chief Development Officer; Kevin Church, Chief Scientific Officer; and Andrew Gengos, Chief Financial Officer, are also on the call and available for Q&A following the presentation. With that, I'd now like to turn the call over to Mark Litton. Mark?

Thank you, Julie, and thank you all for joining us this afternoon. We just issued the top line results from our LIFT-AD clinical trial of fosgonimeton as a treatment for mild to moderate Alzheimer's disease. Unfortunately, the data were not what we had expected, and the trial did not achieve its primary or secondary endpoints. That said, what we believe this trial did do is provide clinical proof of concept for the underlying biology of hepatocyte growth factor or HGF, which supports the positive modulation of the HGF pathway translates into improvement in parameters of neuronal health and may mitigate disease progression even in the most advanced Alzheimer's patients tested. For more than 30 years, HGF modulation has been shown in the literature to promote neuronal health, repair and function, but this is the first group of concept in humans showing that its modulation may translate into improved cognition and function in a neurodegenerative disease, such as Alzheimer's disease. Alzheimer's disease is complex and characterized by a gradual progressive neurodegeneration. As a consequence, it triggers a cascade of events driven by inflammation and protein pathology that eventually leads to neuronal cell death. HGF modulation is known to reduce these factors and holds promise to potentially modify disease progression in neurodegenerative disorders, and these study results now show clinical and biomarker effects to support its potential. Now let me turn the call over to Javier, who will provide a more detailed review of the LIFT-AD outcomes which underscore why despite the trial missing its influence, we remain encouraged by the support of the underlying HGF biology.

Thank you, Mark, and good afternoon, everyone. Now let me walk you through the LIFT top line readout, beginning with a review of the study design. LIFT-AD was a randomized, double-blind, placebo-controlled trial in patients with mild or moderate Alzheimer's disease comparing the effect of fosgonimeton 40 milligrams given by subcutaneous daily injection for 26 weeks compared to placebo. This population was clinically defined as people between 55 and 88 years of age who have mild to moderate AD defined by a mini mental score of 14 to 24 and who have a clinical dementia rating or CDR global score of 1 or 2 with 2 being the moral. LIFT-AD enrolled 549 patients, of which 312 patients were included in the primary analysis population defined by those enrolled to 40 milligrams or placebo who were not on acetylcholinesterase inhibitors, 287 of them were available for the primary analysis. In the primary analysis group, 143 patients were randomized to fosgonimeton 40 milligrams and 144 patients were randomized to placebo. The primary endpoint was global statistical test or GST, which is a combination of ADAS-Cog11, and assessment of commission and ADL23 and assessment of activities of daily living. Secondary endpoints are each of these psychometric tests separately, ADAS-Cog11 and ADL23, in addition, we evaluated plasma neurofilament light chain or NfL as a secondary endpoint and included a number of other biomarkers as exploratory. Importantly, safety was evaluated throughout the course of the trial. Next slide. Let me now review the baseline characteristics of the patients in LIFT-AD. Baseline characteristics of the primary analysis populations were well balanced between placebo and the fosgo treated group, the mean age was about 73 years old, approximately 55% were female and most patients worldwide. About half of the patients were APOE4 carriers, by design, no patients in the primary population were treated with concomitant acetylcholinesterase inhibitors. The baseline mini mental state examination was approximately 19 in both groups, with about half of the patient being characterized as mild and the other half as moderate AD disease. In the CDR score that defined severity, 85% of patients had a score of 1, which represents mild disease and about 13% to 14% had score of 2, which represent moderate disease. ADAS-Cog11, ADL23 and NfL scores were well balanced across the treatment groups. Next slide. Here, we present the result of the primary and secondary endpoint of the study. GST was the primary endpoint, a combination score of the change from baseline in both Cog11 and ADL23, a decrease in GST means an improvement. Both groups showed a small decrease in GST and the defense did not reach statistical significance. For the secondary endpoint of Cog11, which has a scale of 0 to 70 points, we saw a very small change from baseline in the placebo group of negative 0.39 and in the fosgo group, there was a decrease of negative 0.7, which represents a modest improvement and did not reach statistical significance. For ADL23, the functional scale of daily living activities, there was no change from baseline in the placebo group and a small improvement of 0.65 in the fosgo group for a difference of 0.67, but again, it did not reach statistical significance. And finally, the NfL of biomarker neurodegeneration where an increase reflects the disease progression, here, the placebo group showed the expected increase from baseline of almost 3 picograms per ml at 6 months and the fosgo group show a decrease of almost 1 picogram per ml. This difference is 3.9, and it did not reach significance. Next slide. But now I will describe each of the 2 secondary clinical endpoints that are part of the GST. The first one, ADAS-Cog11, which evaluates cognition. Remember, this is a scale of 0 to 70 points with a decreased improvement week 6, there was an improvement in both groups. The placebo group then trend towards baseline at the end of the 26-week period while the fosgo group remains below baseline showing a small improvement favoring fosgo that did not reach statistical significance. For ADL23, this is a total score of 78 points with an increase representing an improvement. At week 26, the placebo group show no change from baseline, while the fosgo group had a modest improvement of 0.67, the difference did not be significant. Next slide. Here, let me show the result of 4 important biomarkers of neurodegeneration, inflammation and protein pathology. On the upper left corner, is NfL, an increase in NfL represent progression of neurodegeneration and in this case, as expected, we saw an increase in the placebo group, which is reversed by fosgonimeton treatment. To the right, we show the GFAP, a biomarker of neuroinflammation showing a decrease in the fosgo group and an increase in the placebo group. Next, we have the Aß42/40 ratio as a market of protein pathology. You can see there is a larger decrease of worsening in the placebo group compared with the fosgonimeton group. Finally, p-Tau 217, a key biomarker of Alzheimer's protein pathology, fosgonimeton show a meaningful decrease of p-Tau 217 versus placebo, consistent with improvement in neuro health. Next slide. Now let me walk you through a predefined subgroup analysis we conducted to identify whether in a more advanced disease population, we will see a much clear differentiation of the therapeutic effect of fosgonimeton compared to placebo. This predefined analysis was based on the baseline level of disease severity assessed by the mini mental test. And as you can see, the mild population, again, shows a decrease which means an improvement at week 6 that remains steady at week 26 with no difference between the treatment groups. In contrast, those patients with moderate Alzheimer's disease based on the mini mental test, we see that after an initial decrease or improvement in both groups, then the placebo group worsening to approximately 1 point above baseline at week 26, while the patient in the fosgonimeton group remain at baseline or below baseline at the end of the study, this is important as it shows a larger effect size in a more advanced disease population. Next slide. Another prespecified subgroup analysis based on the APOE4 genetic status, APOE4 carriers versus non-carriers. In the non-carrier population, we saw a directional improvement in both groups and the results overlap. However, in the APOE4 carriers patients, which are about half of the population, there was a worsening from baseline in those patients who received placebo, while the fosgonimeton treatment group did not change from baseline. Next slide. After seeing this result in more advanced patient population, we decided to identify a group of patients who had even higher disease severity. So the first analysis we did was dividing the patient population in 3 tertiles according to the baseline ADAS-Cog11 value. In this slide, we showed the lowest and the highest third tertile. The lower tertile are patient with less severe disease. Here, there is no change from baseline throughout the study and no difference between treatment groups. However, in those patients with the highest tertile or higher level of cognitive impairment at baseline, there was similar changes at 6 weeks, but the placebo group started to worsen and end up fastly above baseline, while the patient on fosgonimeton remain at 2 points below baseline, suggesting an improvement. This was encouraging finding that support that the underlying HGF biology and its potential to improve cognition in advanced AD patients. Next slide. Our group post hoc analysis look at baseline CDR, CDR 1 versus CDR 2. Remember, in this study, 85% of patients ranked at CDR 1 which represent mild disease and about 15% of patients had a CDR 2 which represent more advanced disease. The mild population showed minor changes at 6 months with no difference between the treatment group. For those patient with more advanced AD as defined by CDR 2, this is about 20 patients in each group. The placebo group showed a decline in commission while the fosgo show an improvement of approximately 3 point for a difference between group of negative 3.74. Taking together the data from this subgroup's analysis such as a possible beneficial effect in commission in the more advanced AD patients. Next. Let me now shift over the summary of safety. Here, we are presenting the totality of the patient population for the safety analysis group. There were 219 patients on placebo, 224 on fosgo 40 milligrams and about 107 patients on fosgo 70 milligrams. There was a high incidence in AEs and treatment-related AEs in both fosgo groups compared with placebo. The differences are mainly driven by the injection site reactions seen in the fosgonimeton group. The incidence of injection site reactions was approximately 50% to 60% if the fosgo group with the majority of them rated as mild. There were 15 SAEs, 6.9% in the placebo group versus 11, 4.9% in the fosgo 40-milligram group and 3, 2.8% in the fosgo 70 milligrams. More patients discontinued drug or the study due to AEs. And again, these were almost all driven by high incidence of injection site reactions in the fosgo group. Of note, within the primary analysis population, the discontinuation was similar between the 2 treatment groups. Importantly, no patient died in this study. Next slide. In summary, the LIFT-AD study of fosgonimeton did not achieve statistical significance versus placebo in the primary and secondary endpoints. The placebo group did not show a worsening information and modest decline in function, which we believe is because in this mile AD population, a longer study might be needed to characterize the decline in cognition and its impact and function of daily activities. However, I think it's important to highlight that when looking at the more advanced population within the LIFT-AD trial, the data suggest a consistent improvement in cognition and maintenance of function. The biomarkers of fosgonimeton show neuroprotective effect across biomarker protein pathology, inflammation and neurodegeneration. This supports the hypothesis that positive modulation of HGF signaling may have a beneficial impact in neurodegenerative disease. Fosgonimeton showed a favorable safety profile with [ the chassis ] in the more frequent related adverse event. The totality of the data suggests that fosgonimeton exhibited and neuroprotective effect in AD patients and is well tolerated. I'd be happy to answer questions here shortly, but let me now turn the call back to Mark.

Thank you, Javier, for that review of the data. As I mentioned earlier, these proof-of-concept data support the underlying HGF biology and give us confidence in our broader pipeline of next-generation orally available HGF modulators which have enhanced pharmacological properties. Our next pipeline program is ATH-1105, where we have a compelling preclinical data -- where we have compelling preclinical data in models of ALS. It is currently in a Phase I study to evaluate single and multiple oral ascending doses. The study is assessing the safety and tolerability of 1105 and will include measurements of pharmacokinetic outcomes. In June, we announced the completion of dosing in the first cohort of the study and expect to fully complete the study by the end of the year and target initiating a Phase II clinical trial in ALS patients in 2025. Before opening up the call to your questions, I want to take this opportunity to thank the patients, their families and caregivers and our clinical collaborators who participated in our clinical trial with the hope of improving not only their own outcomes, but also the outcomes of future patients. None of the progress we make as drug developers would be possible without their support. I also want to thank our dedicated Athira employees. Our team's dedication and relentless pursuit of excellence drives our passion to perform as we remain committed to our long-term vision to provide better neuronal health to patients through our innovative research and product development. To our loyal shareholders, we thank you for your trust and support and look forward to your continued partnership as we journey together in the future. With that, operator, we are ready to open the call to questions.

[Operator Instructions] And your first question comes from the line of Jason Butler from JMP.

I guess just -- I know you've just got the data, but anything you can speak to about the patient population that could maybe address the placebo change or why you didn't see more of a decline in the placebo patients? And then second question for me. Can you talk about the magnitude of change on the NfL biomarker and what we know about how that may or may not translate to the program and ALS?

Thank you, Jason. Excellent. Javier, do you want to take the placebo question?

Yes, sure. And definitely one of the key questions and the key issues that we learned in this study, of course, when we designed the study, we expect this placebo growth to decline over the 6 months, but a turnout that the patients in placebo will be no change from baseline in commission and have a very modest change in function. When we look at the baseline characteristics and compare that with other larger studies in mild population, we do see that maybe 6 months is not long enough to show a consistent decline in commission. As an example, the 2 antibody programs in MCI and mild AD really did not show a change at 6 months in order to see the difference, they needed to have an 18 months observation. So that's one of the reasons. 6 months may not have been long enough for this particular patient population. And that's why we did the subgroup analysis looking at the more severe to see if we can identify that different. But essentially, I think it's a short duration and the mild AD population that triggered a no decline in the placebo group as we expected. Kevin?

Jason, this is Kevin. In regards to your NfL question. So the change we saw in 6 months in plasma NfL in this study, the placebo increased plasma NfL levels by about 3, we'd expect over a year in a similar population, a change from about 4 to 8 picograms per ml. So it's somewhat in line, maybe a little bit lower. So this difference of about 4 picograms per ml is a relevant difference in that over the course of a year, these patients would likely see an increase in about 4 picograms per ml. In regards to ALS, ALS levels of plasma NfL are much higher than in Alzheimer's because there's more widespread neurodegeneration. So there may be more opportunities in that condition to see a significant or substantial lowering of plasma NfL.

Our next question comes from the line of Graig Suvannavejh from Mizuho.

Sorry to see the news on the data. Two questions for me, if I could. Just first, as you think about the results that you ended up getting in LIFT-AD in hindsight, is there anything else that perhaps you might have done differently whether it was the dose or the patient population, the trial design, any aspect of the trial in hindsight that perhaps might have giving you more confidence knowing what you know now about perhaps the chance of seeing more positive data? And then maybe just to clarify, I'm not quite sure if I missed it, but in terms of next steps with this particular program. Is it fair to assume that perhaps there's not a path forward in Alzheimer's disease and what's next for the company is really -- or pivoting away from fosgo in AD and focusing on 1105 and ALS?

Graig, let me start with -- and then I'll hand it to Javier also to add in. So we -- one of the questions, right, just to answer it, the -- in our earlier study, the ACT-AD, where there was a potential interaction with the acetylcholinesterase inhibitors. In fact, when we looked at the different groups in here, the acetylcholinesterase inhibitor alone did not improve. And then we saw the same results that we saw in ACT that it didn't improve with the combination of fosgo either. So that was the first thing. The second question, one of the things that we learned was due to tolerability issues with the 70-milligram dose. We dropped that dose and look specifically with 40 milligrams. And what we did see is an increase when we looked at the 2 groups, of dropout rates for the 70-milligram dose and that the -- essentially, we did not see any improved efficacy in the 70-milligram group relative to the 40-milligram group. So that was something that we learned and that was good. I'm going to hand it to Javier. Is there anything specific you've learned?

Yes. Well, I think I said this before, but I think the #1 thing that will learn in 6 months in Alzheimer's disease clinical outcome trial is not long enough. And I think it's clear, longer study 12 to 18 months are likely to be necessary. Particularly if more than 2/3 of the population is mild in which you do need the decline in order to see the difference. So I think that's one important point. The other learning, I think, has to do with fosgo and the mode of administration is this is a daily subcu injection, typically given by the caregiver of the patient. And I think that probably emphasize even more the placebo effect because when you look at those patients that are mild on baseline, they tend to improve by about 2 points, an improvement on 2 points in Cog11 will be a relevant improvement. And that improvement is even more robust at 6 weeks. That tells me that it is something here about the placebo effect of the daily care and daily injection of the caregiver to the patient. And I don't think we could predicted this, frankly. But now to your point, retrospectively, I look at this clinically, and I think it might contribute to that excess of placebo effect that in the context of a mild population and a short trial prevents us to show the difference that we hope for.

So then the last question, Graig, is the future development of fosgo. So we're evaluating all the options. As I mentioned earlier, these proof-of-concept data support the underlying HGF biology and really do give us confidence in our broader pipeline and the next generation and oral molecules. We believe that continued development with 1105 could be done in numerous neurodegenerative diseases. And as we mentioned, we're on track to have this ready for Phase II by next year.

Our next question comes from the line of Andrew Tsai from Jefferies.

Appreciate the update. Should you move forward with 1017 in a subsequent trial, what kind of design or population you think would be most suitable to get the benefit that you want? And then secondly, does it still make sense for you to talk to the FDA about the study result?

I'm going to hand it over to Javier to answer those questions.

Yes. So no, as I said before, I think mild population 6 months is not going to be the path forward. When you look at this result and when we look at this high severities subgroup analysis, 2 predefined, 2 post drug, and we consistently see a difference versus placebo, and that difference is driven by an improvement from baseline. Again, if we believe those results, I think that will tell us what's the patient population you would like to address next and how to design the study. With the FDA, we're going to have a conversation at the right time, and we'll communicate the results of this study and what's coming next. But these results will not enable let's say, an end of Phase II conversation with the FDA. It will be more the communication of the results, and we're scheduled to do that within the next few weeks.

Our next question comes from the line of Corinne Johnson from Goldman Sachs.

I guess following up on some of the prior questions following this outcome here, how are you thinking about key priorities for the company as you look at the cash you have on hand and what you can execute against with the current balance sheet? And then kind of along the same lines with the cash that you have on hand, can you support operations through proof-of-concept data with 1105 towards the end of next year?

Let me start. So we're just evaluating our options. Andrew, you want to just briefly mention what was our unaudited cash at the end of...

Yes. Our unaudited cash at the end of August. So just a few days ago, was $75.1 million.

Okay. And so Corinne, we're going to put together, we do believe that we'd like to push ahead with 1105, and we'd like to put that plan together and get it ready at least for Phase II, but really coming -- trying to come up with a proof-of-concept study as well.

Our next question comes from the line of Paul Matteis from Stifel.

This is James on for Paul. I guess just after LIFT now, what gives you confidence in the HGF met pathway? And I guess just trying to understand what your thesis is around these next-gen compounds. You mentioned better pharmacological properties, I guess, do these drugs get better exposure and something like that? And I guess in the context of all that, what are you looking for in this initial Phase I study to really give you confidence moving forward?

Yes. So one of the strongest signals that we saw was a reduction in p-Tau. That was the first. And as you know, James, that p-Tau is a pretty significant biomarker for diagnosing Alzheimer's. So that was the first one. The second one was the reduction in NfL. And when we sort of looked at the reduction of NfL by tertile, we saw in the third tertile, we saw a dramatic improvement in NfL, which translates into protection of neuronal health, as you know. And then the other one was reducing the inflammation and that also was very similar to what we've seen in ACT. And so when we look at the totality of that, we really do believe that enhancing HGF, we are impacting the biology and enhancing the neuroprotection.

Our next question comes from the line of Charles Duncan from Cantor.

Provocative, although certainly not compelling results when you look at the [ gate light ] between the curves on Slides 10, 11 and 12. But the question that I have is really around Slide 13 and the lack of details in terms of that you're providing with regard to the treatment emergent adverse events. Is there a difference between the moderate and mild patient population with regard to the safety or tolerability of the drug in any way, could that have been funcitional and blinding?

No, there is no difference between mild and moderate severe patient and AEs. As I said, the AEs is the only imbalance in adverse event is injection site reaction. It was more frequent in the 70 than in the 40, but that was many far more frequent in the active treatment group with placebo. That was the reason of the imbalance in this continuation. However, as I also said, the discontinuation within the primary analysis population was even between the placebo and the 40-milligram groups. So I don't think there is any differentiation with regard to the safety profile AE. So SAEs between placebo and treatment. Again, the only exception is injection reaction that was almost all of them in the 40-milligram mild without systemic clinical consequence.

Okay. And then my second question is, do you have any mechanistic rationale for the much more moderate patients responding differently than the less moderate. So if you look at CDR 2 versus 1 on Slide 12, there's clearly a difference and that said, it may just be sample size and air bars, et cetera, that really eliminate that if you had more patients.

Yes. So you made the point of 20 patients in the CDR 2 at the same time, what I think is unique there that applies to the CDR 2 and the high tertile of Cog11 category. So the 2 sub analysis we did at the highest level of severity of data, you are seeing an improvement from baseline, whether it's 2 to 3 points, and we need to keep interrogating that data because that is -- not seen very often to see an improvement. Now as you said, is provocative, it's a subgroup analysis, it's a small subset, and we need to do a lot more work to feel more confident that this, in fact, is likely to be real, and that will inform how we move forward in general in AD. But I think we all recognize this is a study that did not be significant, and it was negative, but we also recognize that we are learning 2 major points. One is about the biology and the other is one in a subgroup of highest disease severity, you may see an effect that is positive, and I think needs to be confirmed eventually.

Moving into the realm of ALS. It has been said that rapid progressors versus non-rapid progressors provide different signal to noise. Are you thinking about these results in that context? And with that, I'll jump back in the queue.

That's a good question. I think in ALS, that's a much better defined the rapid progressor versus the non-rapid progressor, I think in Alzheimer's, we're at the beginning of that path with the p-Tau and maybe other biomarkers is a good question and something that should be explored further.

Seeing if there are no more questions in the queue. That concludes our question-and-answer session. The last call will come from our CEO, Mark Litton. Sir?

Yes, I'd just take a note to say thank you so much for taking the time today. We appreciate all the questions, and we look forward to having further discussions with everyone.

The meeting is now concluded. Thank you for joining, and have a pleasant day.