Prothena Corporation plc (PRTA) Earnings Call Transcript & Summary

Thank you guys for being here. Super excited to have management team from Prothena Biosciences with us. I feel like a lot has happened over the last few months, but all of a sudden, there's also a lot of action coming up in short order. But I'll let you kick things off.

Yes. No, thanks. Well, I'll let Tran maybe give a little bit of overview here. But first, I wanted to just say thank you for having us. It's always great to be with you and happy to have the conversation. Tran, why don't you give a quick overview.

Yes. I mean I think at a high level, in terms of what our focus is on, I mean, we're still creating value through being experts in protein dysregulation, which I think is represented in our robust pipeline. Clearly, we have 2 Phase III programs being -- one being run in early Parkinson's disease patients through prasinezumab with Roche and the other one is in ATTR cardiomyopathy with Novo. Novo has already initiated the Phase III and Roche is about to. They basically already publicly disclosed they'll get it initiated here in the fourth quarter, and we're already in December. And then, of course, we're also working with Bristol on a Phase II for Alzheimer's targeting tau. And then we have X019 (sic) [ PRX019 ] also partnered with Bristol in Phase I that we're running, and we'll go into that a little bit more, but it's an undisclosed target, but it's for neurodegeneration, right? And so from there, we look forward to earning up to $105 million worth of clinical milestones in 2026 related to coramitug reaching a certain number of enrollment -- enrolled patients. And then, of course, the decision on X019 from Bristol later in the year. And then, of course, we just had a successful EGM where we approved our distributable reserves to support a share repurchase program for 2026. And then, of course, we'll look forward to putting out more data on CYTOPE, and we'll talk about CYTOPE a little bit more given the data we put out at Society of Neuroscience around the ALS program. But I think that captures all the things we're working on here towards the near term in 2026.

Yes. I think the only thing I'd add is just that we continue to have a number of unpartnered programs that we've made some progress on. I know we'll talk a little bit about the Alzheimer's space and obviously, our PRX012 molecule and some efforts to add transferrin to that based on some external data. So yes, we're looking forward to that and continuing to kind of progress the portfolio at large.

Fantastic. So clearly, there's a pipeline we can talk through there. But -- maybe just before we get going, is it -- can you just remind us your amyloid beta? Is this alive, active, moving forward? Can you just catch us up on that?

Yes. I think earlier this year, as we were moving through the year and seeing the readout of different programs, one of the things we tried to communicate was that we felt like it would be advantageous to actually partner with that program to move it forward in a robust way. I think a great example is our partnership with Roche around prasinezumab for Parkinson's disease, where the ability to bring maybe a lower cost of capital to that and some bandwidth has really advantaged that program. And so obviously, in Alzheimer's disease, we felt that, that was the appropriate way to move forward as well. We looked at that data, the data with that molecule is really quite robust with respect to amyloid lowering, amyloid reduction. I think bringing in that study now with subcu once monthly dosing, we're seeing at 18 months in excess of 80% of the patients treated are amyloid negative. With that molecule, of course, there was some ARIA, which is a known effect that comes along with the removal of A-beta. And clearly, one of the ways that in the field, the way the science is moving is starting to think about ways to mitigate the ARIA effects. So clearly, we're looking closely at that, and we're watching the field closely. There are a couple of different approaches there. One, we're going to be informed by in the not-too-distant future here, which is really moving to a presymptomatic patient population. Eli Lilly is conducting studies in that space with their molecule donanemab. So we're excited to see those results. We think not only does that increase the potential commercial opportunity, but it actually may be very informative with respect to these ARIA events as well and the propensity of those types of patients.

What is the ARIA rates you guys have?

So I'm trying to remember what we reported in terms of the ARIA rates.

Around 40%...

40%. Okay.

So we talked about a transferrin PRX012, which we -- we'll put out data from a preclinical trials that we're running or studies that we're running in 2026. And so I think that's a way for us.

Phase -- could that have Phase I in '27?

I think for now, let's keep it to the preclinical data, and then we can think about a very financially fiscally responsible Phase I that you don't need actually a lot of patients for per cohort. You still need to define your dose since you might need multiple cohorts, but you could need 10 patients per cohort.

Could you -- maybe just so -- just for our purposes, so when you do that transferrin PRX012, the size of preclinical tox data, is that much more limited? Because transferrin is validated it on its own, PRX has done all of it on its own. Like how much does FDA need to see for -- to warrant an IND?

Yes. I mean, obviously, that's a point of conversation with the FDA, but you would expect a typical toxicology package for -- in line with monoclonal antibody, which...

De novo.

Well, it is a novel molecular entity. So you'd need some unique data around that construct. That said, I think we've just seen guidance coming from the FDA as recent as yesterday, where they're talking now about maybe avoiding the need to use, for example, nonhuman primates for testing of certain types of molecules and certain types of molecular entities. So I think there's still some work to do to understand exactly what that preclinical IND-enabling tox package looks like. But clearly, there would need to be some.

So if 400 milligram is a dose where you were hitting all the objectives, with a transparent receptor on board, much more blood-brain barrier penetration, how much dose drop do you envision?

Yes. So I think what we can look to in the field is really the experience that Roche has with trontinemab, right? So trontinemab, obviously, the foundational antibody there is gantenerumab. And I think as you look at the transition from gantenerumab to trontinemab, the reduction in dose levels is pretty extreme.

Around threefold.

About threefold. Yes. So there you go. So that's kind of what they're seeing. Now I think there's still some science to be worked out in that space. Eli Lilly has recently talked a little bit about the idea that transferrin may be more exposed, for example, in the capillary structures as opposed to the larger arterial structures of the cerebral vasculature. And in fact, that if there is an impact on ARIA, it may be because there's a more preferential entry into the brain through the capillary structure. We don't know if that's true yet or not, but they've been presenting some data on that, which suggests it could be true. That would certainly be interesting and could explain maybe why you're getting a little better distribution into different areas of the CNS as well as potentially having an ARIA-sparing effect.

Got it. Okay. Got it. So the preclinical doses you guys are using and the data sets we're going to see in due time, are they being done at a fraction of that or not because you want to put it to the top of the...

So that data will be coming, and we'll talk about that at the right time. But I don't think we're ready to talk about that data set yet.

Okay. Got it. And the half-life will still be more or less the same.

We would anticipate so. I mean, obviously, with interaction with transferrin depending on where that interaction lies, it could have a differential impact as we've seen with gantenerumab and trontinemab. But I think clearly, there are some newer technologies around transferrin targeting that are designed to target different epitopes maybe play more or less a role at the level of the reticulocyte.

Got it. So this is exactly the direction I was going to go because not all transferrin technology is made the same. And I think we've seen some of the heme signals in some of the first-gen programs. But I'm not actually fully aware of what exactly are the nuanced differences. Is it just literally epitope and what epitopes overlap with reticulocyte?

I think there's a number of components when you think about transferrin as a brain shuttle technology, not the least of which is affinity and making sure that you're dialing in the correct affinity so that it's not bound too tightly so that when you get the transcytotic event at the blood-brain barrier, you're able to actually see release into the central nervous system. So that's a very important part of it. Epitope is a very important part of it. So I think there's a number of components, and there are a number of companies working on different variants and different versions of it.

Did you guys in-license transferrin technology?

Yes. I think we're just going to -- we'll allow for some of that data to speak for itself. And so we'll talk about that data at the right time, and we'll provide more details then.

Just given your interest in the transferrin approach, do you think -- what kind of data do you believe will be sufficient for a partner to really engage meaningful? Is it at the preclinical level? Or do you think they'll need to see Phase I data at a minimum?

Yes. I think it's hard to say different partners would value different data sets at different points. It's a function of what value you're talking about at any given point in a collaboration. I think we've seen a number of deals and licenses that have happened in this space where people have looked at transferrin-based anti-Abeta antibodies. I think one of the things that we feel unique about PRX012 at this point is that we know what the foundational antibody can do. We have a good sense of what amyloid removal looks like as a subcu once monthly administration. And so I do think that sets it apart a little bit from maybe some of the other things we've seen in the field that have been brought in by companies where maybe that foundational antibody, it's not yet clear what that potentially offers with respect to amyloid removal in a clinical setting.

But I think it also goes to deal value, right? And that's another way to think about it, too. So I think at the end of the day, you go out and achieve the data sets you're trying to show that your construct works, right, and compare it to others, whether that is in humans or in animals. But that being all said, I think it's just about value at the end of the day.

Got it. Got it. Going on. So just kind of moving on to prasinezumab and coramitug. As these programs kind of move forward to Phase III, like what indications have you seen from Roche and Novo in terms of how they're prioritizing and resourcing these programs?

I mean -- sorry, go ahead.

Well, I'll say, I think in all cases, so we have some great collaborations, not just with Roche and Novo, but also with Bristol-Myers Squibb. And I think in all cases, we've seen that these companies are rationalizing their internal portfolios. They're continuing to put, I think, pretty important gates and criteria around what programs move forward. So to see both on the Novo case with coramitug that molecule, a decision made by Novo to move that forward. We've now seen the Phase II data set that I think led to that decision-making, which we can talk about. And then also on the Roche side with prasinezumab, we've seen some of the data they've presented around the 2 Phase II studies that have been completed. And obviously, that went through a rigorous evaluation criteria process within Roche. And clearly, they have a lot of things they could be working on. So I think in both cases, it's great to see those things move forward and an indication of the potential of those as Phase III programs.

Got it. And I would just add on that, that we had great presentations and data sets from both Roche and Novo this year relating and helping justify those Phase III, right? So AD/PD 2025 for Roche, they present very compelling data on prasinezumab, especially at 2-year duration and levodopa in the double-blind portion, which helps the justification for Phase III. And then just recently at AHA25 Late Breaker presentation, very exciting data on NT-proBNP, about 50% difference from placebo in that arm in that small study really justifying [indiscernible] echo data.

Yes. Well, a 50% change from placebo, but really, in my mind, something that was kind of interesting was a reduction from baseline. And I think if we look to the other agents in this space, we really haven't seen that, certainly not within a 12-month time period. So pretty remarkable there. The cardiac remodeling with the echocardiogram readouts, as you say, and at least not statistically significant, but across a 12-month time period, at least directionally, seeing an effect that goes in the correct direction relative to placebo on 6-minute walk test. So I think an encouraging overall weight of evidence data set with coramitug and obviously justifying that program moving into Phase III.

Got it. Now that [indiscernible] kind of largely focused on supporting partner programs for prasi and coramitug, as they kind of head into Phase III, what does that support look like if you can kind of get more granular into that?

Yes. So we've been, I think, fortunate to have really great partnerships. And in the case of both Roche and Novo have engaged in, I think, pretty extensive dialogue with both of those companies around the science, around the clinical decision-making. And so we offer whatever support we can. And obviously, we're available to lend whatever support is needed. And obviously, we continue to work very closely with those partners as well as our partners at Bristol-Myers Squibb. So with Bristol-Myers Squibb, it maybe a little bit more intensive. We're still conducting the Phase I study for PRX019, where we expect them to potentially make a decision, which has some consequence relative to.

That's MTBR?

No, PRX019 is an undisclosed mechanism. So the MTBR program is BMS-446, which is in Phase II. So they're conducting that. They have that fully enrolled. We expect that data according to ClinicalTrials.gov in 2017 (sic) [ 2027 ]

'27.

'27.

I feel like that trial is being run like a Phase III and just slowing them down and you guys down with it as well.

No. I mean the primary...

Why did we call [ 76 ].

Well, they want to make -- I mean, I think the whole field in the sense wants to correlate tau PET to clinical outcomes. So I think they are actually running an appropriate Phase II.

There's no interim like first 50 patients out to week 76 that you could get much sooner. There's nothing like that. I don't believe that's how they structured it. So it's data in 2027.

Yes. But I think the way that they're conducting that trial makes a lot of sense, right? So the key kind of element there is this is an MTBR targeting monoclonal antibody against tau. MTBR has recently come, I think, very center stage in terms of the pathology of tau in the context of Alzheimer's disease. Recent data from the Eisai molecule, which targets a different part of the MTBR sequence has shown that you see reductions of phospho-tau 243, which is something that seems to correlate better with, for example, tau PET and maybe the p-Tau 181s and 217s, which correlate a little bit better with amyloid beta changes. And so I think there's a lot of excitement about what these MTBR agents can do. And the way that study is structured now is to look, I think, in a relatively definitive way at changes in tau PET. But with having functional measures as key secondaries, it allows you to also go in then and evaluate changes in tau PET and that relationship to any functional change. I think that's important, and it's very informative with respect to thinking about future studies.

Excellent. Any thoughts on -- or comments on the recent J&J tau failure?

Yes. I mean, very different epitope, very different part of the molecule. Obviously, it, was a phospho-specific antibody at p-tau217, which is more in the proline-rich repeat area of the tau protein relative to what we're talking about in terms of MTBR. I think if you look at the work of folks out there in the field like Marc Diamond and others, it's pretty clear from his work and related publications that this microtubule binding domain of the MTBR region really is responsible for making the key interactions with, if you will, unaffected neurons that allow for the internalization of tau fragments to start to seed and affect those neurons. It's through an interaction with a protein called heparan sulfate proteoglycan. And the best kind of narrowing of that interface region seems to be to the MTBR region. So the relevance of that proline-rich repeat region in terms of that kind of continuing pathogenic spread, I think is a little bit more hypothetical. And I think what we're seeing is, at least on the top line, targeting those proline-rich repeat areas doesn't seem to be having the impact. I think the sponsors had hoped it would whether, in fact, with more data cuts and a little additional data analysis, there might be some important learnings that come from that. We certainly hope so, and that's something we'll be looking to.

Got it. I know we're at time, Mike, so we might have to wrap it up. But why don't you ask?

No. I mean, just one final question while on the subject of the tau. Phase II, they got fast track status. What does that tell you about the level of conviction and kind of what do you need to see to view this as a potential registrational path?

Yes. So I think there's kind of 2 questions in there. The first is just around fast track and what is the current kind of zeitgeist around tau and how do we think about that? And I think we've known for a long time that tau is very relevant in the context of Alzheimer's disease. Most in the field feel that Abeta is an important kind of precedent and continuing event that leads to tau dysregulation and then you end up with neuroinflammation and some other components as well. So it's a multi kind of component disease that is probably initiated by early dysfunction in Abeta, but then Abeta continues to have a toxic function throughout the lifespan of the disease space. So tau is very important. It's proximal to some of the functional deficits that you see in patients that show up. Most of those patients go through some period of rapid tau accumulation before you start to see subjective functional complaints. And so I think tau is a very interesting and important target from that perspective. So the idea of fast track status makes sense from that lens. I think the second part of your question was.

The registrational...

Registrational nature of that. Look, it's hard to say. I think all companies would advise that we should expect to run a robust Phase III or Phase III is in order to get registration from a full approval approach. If we look to the precedents in the field in Alzheimer's disease around Abeta, what was required for aducanumab, for lecanemab to receive accelerated approval. Basically, the primary basis of approval were changes in imaging. So a biomarker that was reasonably likely to predict clinical benefit. That reasonable likeliness was exemplified through an understanding of how functional changes related at least at a group level to those changes in the biomarker. And at the end of the day, unless I'm mistaken, I believe the Phase IIIs were fully or near fully enrolled at the time of those accelerated approvals. So again, if one wanted to allow themselves to wander down that path for a moment, hypothetically, I think the idea of having a primary outcome measure as an imaging marker, functional endpoints is a secondary outcome measure so that you can actually establish that relationship, at least puts you in a good position to have those conversations. But again, I think the guidance certainly would be that the expectation -- the base expectation is to run robust Phase IIIs to prove out that one.

Just before we wrap it up, Tran, in a scenario where Lilly hits 40% plus effect size in their preclinical Alzheimer's study, how do you guys intend to communicate to The Street the continued commitment to the A-beta space now with the transparent receptor-based technology. I just want to sort of throw it out there because it's obviously important, and you guys have a lot of experience there.

Yes. I mean I think it shows through the -- our preclinical study that we are running and we'll share data on it. And then after that, sharing a clinical plan, right, that would get to patient level data that would show basically the positive characteristics of the construct. And I think from there, given the broader, I would say, development because I think Lilly is running a great Phase III for subcu remternetug in terms of dual population enrollment, right, in terms of presymptomatic and symptomatic, that would be something I think that could be attractive to a large pharma from that perspective. But I think go along that continuum and clearly work with large pharma along the way and try to what we discussed earlier with Mike is where is the best value.

Makes sense. Fantastic. Excellent. Well, thank you, guys. Thanks for joining, and certainly be in touch.

Thanks for having us too.