Prothena Corporation plc (PRTA) Earnings Call Transcript & Summary

Perfect. I think we'll get started with the next session. I'm Matthew Harrison, I guess, deemed recovering research analysts at this point. I work in investment banking at Morgan Stanley. Very pleased to have Prothena with us here. Just quickly before we get started, I need to read a disclosure statement. For important disclosures, please see the Morgan Stanley research disclosure website at morganstanley.com/research disclosures. So really pleased to have Gene and Wagner here. Maybe I'll just turn it over to them to introduce themselves and then we can jump into Q&A.

Thank you very much. And first, thank you for having us. It's really nice to be here. Appreciate the opportunity to speak. I'm Gene Kinney. I'm the CEO of Prothena.

And I'm Wagner Zago, the CSO of Prothena, also glad to be here.

Super, super. So I thought we'd start with Alzheimer's probably a big surprise. And I think maybe just help for everybody's benefit, just to get us in the right spot, right? There's been a lot of drugs we've seen a decent amount of progress in the field over the last year or so. Your asset, PRX012, you had the opportunity to sort of see some of those agents while they're progressing through the clinic and design it. So maybe you could just talk about how did you design that asset? And one of the -- what do you see as the limitations of the current drugs that you've tried to overcome and how you design that?

Yes. No, I appreciate the question. And Wagner can certainly speak at length about the steps we've taken to really optimize the development of PRX012. And I think it really goes back to 2017. So for folks that don't know Prothena, we spun out from Elan Pharmaceuticals back in December of 2012. So we've had a long history understanding the development of particularly anti-amyloid based approaches in the context of Alzheimer's disease. And what we were seeing even in the 2017 time frame was a real evolution around clinical trial design and execution. We were seeing better examples of patient selection in the context of clinical trials, but it used to biomarkers, better endpoint usage that were more sensitive to the early phases of Alzheimer's disease. And even a better understanding of observation period, what ARIA was biologically and how we dosed around and through it, really to give us the exposure levels that we needed with these anti-Abeta agents in order to see activity. And we saw a class of anti-Abeta agents at that time that targeted the immuno terminus of Abeta that we felt very likely would be the first class of disease-modifying agents in this disease. And of course, badly needed Alzheimer's disease, 6.5 million patients affected by that the United States fatal disease. And so anything that can move us from purely symptomatic treatments to disease-modifying treatments, of course, is a huge step forward as we think about the treatment of [immuno therapy]. Now as we looked at that first class of of anti-Abeta agents, we felt that really to fully address the burden that patients would be having not just because of the diagnosis, right? You're early in the disease, you get a diagnosis of Alzheimer's disease. It's a fatal disease. You have to cope with the potential pending loss of independence in the course of the disease. So a lot of burden being put on you from a patient perspective early. We don't want to add to that with the treatment approaches. And so we knew these first-generation antibodies would likely require very regular treatment. So in the case, for example, of the approved agent lecanemab, twice-monthly IV treatments. They are testing a subcutaneous formulation, which we'll hear more about at CTAD this year, where we're thinking somewhere around 2 injections on a weekly basis. So up to 8 injections a month. And there, as we think about the patient burden, we really wanted something that could remove that patient burden in the treatment paradigm, something that would increase the total addressable market, something that would provide for a more convenient approach for patients. And as we thought about removing that patient burden, we really set our sights on a treatment that would be once monthly subcutaneous relatively simple to administer a low-volume approach. And so to do that, we've designed in certain biological characteristics into the antibody. Maybe Wagner, you can tell us a little bit about how we achieve that goal.

Yes. But just to expand a little bit and to emphasize [ X-Stuff ] was born to be subcu. That was the objective of the program. It was not an antibody that we had IV and then we checked if it could be subcueable, all the qualities that you would need in an antibody that's liver subcu were there in the screening process, in the design process of X012 from the very beginning. So back in 2017, very excited with the first-generation antibodies, particularly at that time, Aducanumab and the confidence at that time that if you clear amyloid rapidly and substantially, it would reflect in clinical benefit. And over time, that just solidified with the other antibodies. But then to reach a level of target engagement in the brain and then biological response that we would need with a subcuable and small volume antibody there were a number of properties that we need to create. There was no precedent. One that is very clear, a higher affinity antibody. So with the smaller amount of antibody that you deliver in the small volume subcu, they have to be sufficient to enter the brain, opsonize the plaques and in just the same level of biologic activity as the first generation antibody. So Affinity was a very important component. I'm going to park for a moment here. There are a number of other things that are very important to have in an antibody when you're talking about subcu. So by availability, stability, high concentration formulation, all of those things, we were experts in those things. So we're kind of easy for us to de-risk the program or to accentuate the properties of X012 in those rounds. But in the Affinity side, we were asking a level of Affinity for plague, that was unprecedented. And it was a level that we knew we could not reach with the classical methods of Affinity maturation of antibodies. We had to take a different route from the beginning we knew that. And we were just in the lab and looking at how our chemists do their own work in this small molecule with SAR or structure activity-based approach where they know very well how is the structure of their compounds and the structure of the target and trying to improve the interactions in the small molecule world, they talk about pockets of interaction so that they can increase the Affinity and the residence time. When we ask ourselves, why can't we do the same thing with antibodies. We've been generating antibodies based on biological variability injecting animals and hoping that we get the best of it or with random mutations, which is very ineffective, very likely to get to your point and said, let's try now knowing everything that we know about Abeta. And at that time, we already had a very good understanding about the structure of Abeta, particularly in a fibrilla form like the plague how these antibodies buying, including daratumumab that we made, but at that time, aducanumab, lecanumab, we knew exactly what are the points of contact that they have with the parks or with Fibrilla Abeta. And we improved upon. So we started with the highest affinition body you can find. And now by using computational 3-dimensional confirmation studies, we look for pockets that could be accentuating that binding, which could be increasing that bind in the plaque, particularly when you're talking about an antibody, the ability to bind with the 2 arms simultaneously, it's a very, very efficient way of increasing the affinity or a [indiscernible] of the antibody to the target. So finding the pockets in the Abeta that were simultaneously exposed to an antibody and corresponding amino assets that we starting with the modeling, but then generating hundreds of antibodies to empirically determine we found X012. So what is particular about X012 is that once it binds to the pack, it stays for a very long time. There is very low, very small level of association, very slow off rate. And that is because the 2 arms of the antibody bind to the plaques where you have epitopes presented in an optimal way simultaneously. So the chances of having the 2 arms associated at the same time as much decreased. What does that reflect you same level of occupancy as the other antibodies can be reached with a much lower concentration of the antibody. And that lower concentration of antibody allows us to now deliver subcutaneously the same amount and reaching the same [indiscernible].

I guess two follow-on questions to that before we talk about the data, obviously, that people are focused on at the end of the year. First is, if you have such high affinity and things like that, should people think or is there a risk about tolerability and safety? Especially related to the characteristic AUs with your compound versus some of the compounds that we see?

Yes. No, it's an important question. And I think specifically you're talking about ARIA or amyloid-related imaging abnormalities. Which are related to targeting Abeta, and so it's an on-target effect. As we understand the science, and I think Eisai has published similar data we believe that the maximum occupancy of Abeta at any given point in the variation of exposure is probably primarily associated with those ARIA events, whereas the average exposure over time is probably more relevant to amyloid reduction and ultimately positive clinical outcomes. We've seen a number of proof points that support that notion. In terms of hard data. We've seen modeling, for example, from Eisai with their own molecule that supports that as well. And we think that's something that is important in the context of PRX012. So, what you said is a more potent antibody likely to produce more substitute RAF or safety events. That would be true if you use the same dose levels. But I think the whole idea here is that you're moving to a lower dosing requirement to get to the same levels of occupancy, which affords you the ability to move to this subcutaneous approach, particularly on a once monthly basis. And so I think there, we would expect certainly not worse tolerability effects. And in fact, there are some arguments if, in fact, the variance or the delta between the maximum occupancy and the average occupancy is smaller due to a more convenient approach like a subcutaneous administration with a high-potency antibody that, in fact, biologically, you could test whether, in fact, you're advantaged there. I don't think you need to win on that piece. I think at the end of the day, from a commercial perspective, if you are equivalent or in the neighborhood of equivalent around safety and efficacy, but you move the field to a once-monthly subcu presentation. I think that is sufficient to really take a dominant place in the marketplace. But I do think that the characteristics that allow you to move a molecule to a once-monthly subcutaneous presentation or the same characteristics that would allow you to ask the question of whether that lower variance between maximum occupancy and average occupancy, afford you a bigger therapeutic window. And that's something obviously that can empirically be looked at. In the context of clinical trials.

Okay. Perfect. And then the second question is just around IP, given that there are a lot of compounds targeting these pockets, et cetera? Just talk about that and how you see about your IP position?

Yes. I mean these are obviously molecular entities. We have composition of matter patent on PRX012, which is relatively fresh, and we'll be continuing to file as we learn about additional properties on PRX012 through the development path. We feel like it has a fulsome portfolio of intellectual property protection.

Okay. Super. So why don't we move on to data this year. And I guess, I think, and you can correct me, I think what you said you obviously have a Phase I program ongoing. You have a set of single ascending dose data and a set of multiple-ascending dose data. And I think you've talked about the SAD data plus the first cohort of the MAD data. So maybe just tell people what does that encompass? In terms of patient numbers and dose levels and things like that.

Yes. So maybe just starting at the top and working down. I think, again, to reiterate, we think at the commercial level, showing comparable efficacy and safety profile with a once-monthly subcutaneous presentation, is a winner in this space. So coming out of our Phase I program and the full results of the Phase I program for all dose levels, we would expect next year, we would be looking to what we'd call an optimal dose level and an optimal dose level in our mind, is a reduction of amyloid plaque that has shown to actually translate into clinical benefits. So they're at a 6-month time point, you'd be looking at somewhere around 44% plaque reduction over a 6-month time period and a safety profile that, again, is somewhat equivalent to where our first-generation antibodies are out there in the field. So you're looking at somewhere around 24% or so ARIA rates or RAE rates all baked in. That's from an optimal perspective. Obviously, the way that the Phase I is set up is that we have overlapping single dose and multiple dose cohorts ongoing. What we've committed to share this year are two dose level cohorts from the single dose portion of the study and 1 dose level cohort from the multiple dose portion of the study. What we're expecting from that first read is obviously information about safety, tolerability, PK and immunogens. And from the single-dose cohorts, that's important. As we set up if you agree with me that from a commercial perspective, moving to once-monthly subcutaneous presentation with relatively equal potency or I should say, equal efficacy and equal safety is a winning hand. Really, we're going to learn whether we have a likely ability to meet that target profile even from the single dose data. So understanding something about PK and exposure and brain penetration. As we move to the multiple dose data, the multiple dose portion of the study is a little more extensive than one would usually think about in a multiple dose study for monoclonal antibody. It is 6 months of treatment. And obviously, we haven't said exactly how many patients we have per dose level cohort, but it's larger than a typical Phase I multiple dose study such that we can get good inference into what the levels of plaque reduction and ARIA rates are. So what we'd be looking for as a company is really understanding that we have a therapeutic index that we see an appreciable level of amyloid plaque reduction with a window to the ARIA rates that if, in fact, we need to further optimize the dose level, we have the opportunity to do that. right? And that it's a pretty straight picture on how to get from here to there from a dose response perspective and obviously, getting us to our goal of selecting an optimized dose level we can move then beyond our Phase I program in 2024 into registration-directed studies.

Okay. Helpful. So why don't we just touch on a couple of things because you said a lot of stuff there. And I think also for people figuring out how to interpret on med dose cohort and what that means to the other dose cohorts is probably helpful. So I guess the first question is what have you said or what should people think about the dose exposure response curve or what you're going to be able to tell people about that curve such that if we see one dose level, how easy it's going to be to interpret what that may mean at other dose levels?

Yes. I think it's an important question. I mean, so I think the traditional way you think about, for example, small molecule development programs, you might go in some fold lower than anticipated biological effect level and then start dosing up. Here, there's, what, well over 8,000 patients worth of data in the field that tells us something about amyloid occupancy, which can really be derived from understanding the potency of an antibody, the exposure in the periphery and ultimately, the brain penetration. And what that actually does in terms of impact to plaque reduction and how then that plaque reduction translates to clinical benefit. And so we actually go into these studies with really a pretty sophisticated level of knowledge about the levels of occupancy that we're targeting. So we do expect this first dose level to be active. And by active, we don't mean 1% or 2% reduction of amyloid plaque. We mean an appreciable level of amyloid plaque on which we can really get a good assessment of a therapeutic index. And I think the way that we'll think about this is based on that therapeutic index when our ARIA rates look like, what our amyloid plaque reduction rate looks like across the 6-month period, how does that actually track back to our understanding of the biology and the assumptions that we made moving from the preclinical to the clinical space. Replace those assumptions with real data, of course. And then obviously, that should give us a very clear picture on where to move if, in fact, we need to move from there. If, for example, that first dose level is not already the optimized dose level. Maybe let me pause and see if Wagner wants to add.

No, it's incredible. In fact, the consistency, once you normalize the data for plaque occupancy, versus clearance from any antibody that binds to the plaques and clear, of course. There is a very high level of consistency, and we build models around it. And all the data so far indicates that the limiting factor for clearance is the occupancy of the target. So if you dose higher, you're going to see a dose response in terms of clearance. And with that understanding of how these molecules work, the first generation molecules work, of course, we picked a dose that was expected to be active. But there is an uncertainty that we carry from preclinical to clinical. And the biggest one is exposure. We have just in terms of CSF exposure for typical IgGs, we are talking about between 0.1% and 0.3%. That's a wide range. We have to determine for X012 what is the actual concentration in the brain. And then maybe that first dose that we selected is the dose that we going to be forward. Maybe it's higher, maybe it's lower than the target. But the confidence that if we need to go higher to achieve higher levels of clearance that you would do so, it comes really from X012 and all the preclinical, but all the other antibodies. There is a dose response, the limited factor, there is occupancy of the target. It's not, for example, availability of microglia.

Maybe just, I want to move on to some other topics. But I guess last question is, once you identify what you think is the optimal dose level, what do you do from there? Do you move right into a Phase III program? How should people think about your ability to execute and move quickly?

Yes. No, I think the clear path, obviously, to a traditional approval is a stand-alone Phase III study. What we're learning, and of course, the field continues to evolve in this space is through careful patient selection, good use of quality end points. that in many cases now, we're seeing Phase IIIs that are reading out essentially overpowered for the effect size that you need in order to get the safety database size that you need. So we think that there's really become almost a democratization of the clinical trial approach, both in terms of cost and efficiency. Our background, again, as a company, we really were the originators and initiators in this space. We feel that we know this space quite well, both from a preclinical and clinical side, and we feel we certainly have both the knowledge as well as the scope and bandwidth to execute in that space. Along the way, obviously, we'll be assessing whether an accelerated pathway continues to exist. If so, we'll clearly look to take advantage of that. You need a couple of things to think about accelerated pathways, serious disease your program has to reasonably address an unmet medical need. And I think as we talk about burden and accessibility, there's a case to be made there around the potential for X012 to address an unmet medical date.

Okay. Super. Why don't we flip to Tau?. Most of the time, you hear tau antibody and you think hasn't gone well. So maybe that's a good place to start to say why you think it might go better for you?

Yes. And I think in part, if we think Abeta is a complicated protein to target in its pathological form, which is 38 to 42 amino acids, let's talk about tau, which is up to 440 amino acids. Has multiple phosphorylation, site truncation sites, 6 splice variants, a couple of major iso-forms. And so I think one of the big challenges in the field has been how do we actually target this protein in a way that actually matters. . And as we were working on this some years ago and Wagner can go into detail, we were really, didn't have a lot of information to go on. So we took a very empirical approach. We simply made antibodies to just about every different form and part of Tau that we could think to make antibodies too. It's an approach we call empirical epitope mapping, which is just a way to muscle through this and make a lot of antibodies and then ask what the characteristics of those antibodies are through a series of in vitro assays all the way through to in vivo model systems. And what we're looking for in terms of readouts, consistency and robustness of biological effect. So having a 30% blockade is cell-to-cell transmission an in vitro system, or some partial recovery of some toxic cell stress model some smaller factoring consistent effect in animals isn't going to get it done for us. We want to see robust effects. We want to see consistent effects. And it wasn't until we zeroed in on a region of the protein within the microtubule binding region, the MTBR region that we found a place where we were satisfied with the level of consistency. I would tell you of all the tau antibodies where it hasn't gone well so far, none of them target that area. So this is one of the major differences. And maybe Wagner, if you want to share some insights?

Yes. So the first generation of the antibodies that have not worked so far. They have two characteristics. They bind to the in-terminal portion of tau. And as Gene said, we saw, when we saw efficacy with antibody starting those regions. It was small and variable. So we cannot replicate, for example, in 2 consecutive studies, so we quickly abandon that region. And the other characteristic they were also what we call the factor function mutant or no reduced. So they would not trigger clearance of the target once the antibody binds to the target. What we learned from our screening basically, empirically determining the qualities of antibodies that you have to target them to be a portion of tau in order to block the cell to cell transmission completely. And we saw that reflecting in consistent and robust efficacy also in animal models. But also the effector function was important. So this idea that if the antibody binds to a small molecular wage pathogenic forms is not going to reduce clearance via FcR gamma, I think it's lacking. I think there is a process of clearance that's not phagocytosis but called pinocytosis that also helps in the brain, the cells get rid of the pathogenic form via appearance mechanism. So we put the two together. So PRX005 is an MTBR antibody with effector function. While we were finding empirically these results, other labs were starting to describe the tau, certain forms of tau, [biogen] via the MTBR domain with, by interacting with receptors on the side of the cell, like heparin sulfate proteoglycan domains. So all of that made sense. So what we think X005 is doing is binding total and preventing that to from now interacting with a receptor or 1 of the receptors on the postsynaptic side and preventing that uptake that if it happens, if that set of toll gets inside the neurons, then you would expect to have a seeding process of an increase the probability you have aggregates being formed. And also, of course, blockade of the transmission, but also very quickly getting rid of that pathogenic form VNFs, mediated clearance. We think that, that is what makes X005 a higher potential than the first generation.

So maybe just give us next steps there and obviously, given partnering? How and when we might hear something about that?

Yes. So we, as you kind of alluded to, we enjoy a partnership with Bristol-Myers Squibb that incorporates PRX005 or NT-proBNP targeting tau antibody amongst some other targets as well. Recently, in fact, we announced this just recently, they have opted into the worldwide rights for that program and started to assume control of that Phase I study. So they'll be taking that on at this point. communication will fall back to them. So we're excited to see them continue to move that forward, and we were excited to see them come in at a time point before they were required to do so to take the option on that program. We have two additional molecules that are, remain preclinical at this point in that collaboration. The way that, that collaboration is set up is there was an upfront payment. And then on a molecule-by-molecule basis, there are two option periods. The first is at the time of IND filing or right around the time of IND filing where they have an option period where they can come in for U.S. rights. That's an $80 million payment for that option. And then we would typically conduct the Phase I study. And then on the back of that, would start their option period where they could avail themselves the rest of world rights for an additional $55 million option.

Okay, super. And maybe just since we touched on BD, what's, what's the view on BD broadly, right? You have a mix of partnered and un-artnered assets? How should investors think about what you're focused on?

Yes, I think we've been very purposeful in establishing partnerships. First enjoy partnerships with Roche on our Parkinson's disease asset with Novo Nordisk around our ATTR asset. And of course, we just talked about Bristol-Myers Squibb, we enjoy those partnerships. We feel like they're very productive. Those organizations bring a lot of value to those programs. We've been pretty strategic. Obviously, as you think about a diverse portfolio, such as we have, we have a vaccine that we plan to file an IND on this year. That will bring us to 6 molecules in the clinic. So 3 will be partnered, 3 will be unpartnered. That's very much by design. It's about thinking about capital allocation, making sure that we have the capital to deploy to our wholly owned assets. And our wholly owned assets are really places where we feel like we have unique expertise. We have the ability to advantage patients by moving those molecules faster through just our expertise, our understanding of the science, our understanding of both the preclinical and clinical space. And also our ability to ultimately commercialize. So our lead asset is a Phase III asset in a peripheral amyloid disease space, which is rare by nature, very efficient from a commercialization perspective. We think we're the right organization to commercialize that asset. In other areas, we may be very advantaged by additional skills, by additional bandwidth. And in those areas, we actively seek partnerships. So I think it's been a good mix. It's been very purposeful, but I think it's been a responsible way to make sure that we both bring in capital and deploy that capital in an appropriate way within our portfolio.

Okay. Super, maybe in the last minute or two, just to make sure we touch on amyloidosis in your Phase III study and Parkinson's. Maybe just give us an update on those studies and then also for the Phase III in amyloidosis? Just remind us if there's an interim there and how to think about data timing?

So let's start with the AL amyloidosis program. There's a couple of forms of peripheral amyloid disease. Most folks are very familiar with ATTR amyloidosis, AL amyloidosis, of course, is where our lead program is that molecule, the name is Birtamimab, based on a prior study, which ended early due to futility when we did an analysis of that study, what we found was in the more advanced patients, patients that were more prone to a mortality event. In fact, by literature, you would anticipate these folks surviving somewhere between 4 to 6 months on our best standard of care arm without Birtamimab, it was just over 8 months. We found a survival benefit hazard ratio of 0.413 over a 9-month period of time. So almost not quite a 60% relative risk benefit on all-cause mortality. That's a pretty sizable benefit. We, of course, did a significant amount of analysis of that to ensure we weren't leading ourselves down the wrong path. Interacted with the FDA and ended with a Special Protocol Assessment agreement or SPA agreement with the FDA, where we would conduct an additional study which is ongoing. This is the AFFIRM-AL study. And an Alpha Value or a p-value of 0.10. So typically, it's 0.05. So it's 0.10, we would be eligible to register that therapeutic based on the strength of the prior data and the totality of our safety database. That study is enrolling. It's ongoing. We expect top line data from there next year. That's a wholly owned asset, and we do have plans to commercialize that ourselves. I think the other asset you asked about was Prasinezumab, which is our Parkinson's disease drug, that Parkinson's disease drug is with Roche. Roche is conducting a Phase IIb study called the PADOVA study. This is a study with, I believe, 575 patients across 2 arms. They'll be looking at a time-to-event analysis for progression on something called the MDS-UPDRS part 3, which is a scale of motor dysfunctions, so things like tremor, bradykinesia, typical symptoms of Parkinson's disease. The reason 5 points is relevant is that something a patient can feel and appreciate in terms of worsening. So what they'll be looking for is for patients that maybe are already on symptomatic therapies, how do they do on this time to event analysis. Roche indicated on the first quarter earnings call that they were fully enrolled in that trial. It is time to event. So it's a little hard to know exactly when that will read out, but they're currently suggesting that will be a 2024 event. So we're excited to see those data as well.

Well, super. Thanks for being here. Gene, Wagner. I appreciate it very much.

Thank you. Appreciate it.

Thank you.