Alpine Immune Sciences, Inc. (ALPN) Q4 2020 Earnings Call Transcript

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Alpine Immune Sciences, Inc. (ALPN -0.05%)
Q4 2020 Earnings Call
Mar 18, 2021, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon, ladies and gentlemen, and thank you for joining the Alpine Immune Sciences fourth-quarter 2020 financial results and corporate update conference call. [Operator instructions] As a reminder this conference call is being recorded today, Thursday, March 18th, 2021. I would now like to introduce Alex Sharif, director of investor relations and corporate development. Please go ahead.

Alex Sharif -- Director of Investor Relations and Corporate Development

Thank you, Josh. With me on today's call from Alpine Immune Sciences are Executive Chairman and CEO Dr. Mitchell Gold; President and Head of Research and Development Dr. Stanford Peng; Chief Financial Officer Paul Rickey; and Chief Business Officer, Dr.

Remy Durand. This afternoon, Alpine Immune Sciences issued a press release announcing the company's fourth-quarter and year-end 2020 financial results and corporate update. If you have not received this news release and would like to read it or if you would simply like to be added to the company's distribution list, you can do both on the Investor Relations page of the company's website at www.alpineimmunesciences.com. During the course of today's conference call, Alpine's management will make forward-looking statements, including, but not limited to, statements regarding the company's preclinical and clinical development plans and the timing thereof, expectations regarding the sufficiency of cash to fund the operations, including any cash received from potential milestone payments under Alpine's collaborations, the timing and publication of future clinical data, expectations regarding Alpine's ongoing collaborations and potential future collaborations, including the anticipated strategic and financial benefits of the option and licensing agreement between Alpine and AbbVie for the development and commercialization of ALPN-101, Alpine's ability to successfully develop its product candidates and achieve milestones under its collaboration with AbbVie and others, and the financial and business outlook for Alpine.

These forward-looking statements are based on the company's current expectations and inherently involve significant risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks, and uncertainties. Factors that could cause results to be different from these statements also include factors the company describes in the section entitled, Risk Factors in Alpine's Annual Report on Form 10-K for the period ended December 31st, 2020 and filed with the SEC on or about March 18th, 2021. Alpine cautions you not to place undue reliance on forward-looking statements, and undertakes no duty or obligation to update any forward-looking statements as a result of new information, future events, or changes in its expectations.

With that, I will now turn the call over to Alpine's Executive Chairman and CEO, Dr. Mitchell Gold.

Mitchell Gold -- Executive Chairman and Chief Executive Officer

Thanks, Alex, and welcome to our fourth-quarter and year-end 2020 financial results conference call. 2020 was truly a transformative year for Alpine Immune Sciences as a company. Going forward, we look to build on the strong momentum to accelerate the development of our pipeline of innovative therapies for patients living with cancer and autoimmune and inflammatory diseases. I would like to dive into our three most advanced programs, starting with Alpine-101, our dual CD28/ICOS inhibitor.

In June of last year, following a highly competitive process, we entered into an option and license agreement with AbbVie for worldwide rights to Alpine-101. That deal provided an upfront payment to Alpine of $60 million and as a total potential deal value of up to $865 million in milestone payments as well as royalties. Importantly, there is up to $75 million in potential pre-option payments related to our development of Alpine-101. We anticipate achieving the first of these milestones in the middle of this year, as we progress Alpine-101 program with AbbVie and lupus.

Moving next to Alpine-202, our first-in-class conditional CD28 costimulator, and dual checkpoint inhibitor. As many of you know, CD28 has emerged as a potentially key costimulatory pathway for overcoming resistance to checkpoint blockade. And we are encouraged by the strong interest in the space. Alpine-202 remains the only therapeutic candidate that we're aware of, that combines conditional CD28 costimulation with PD-L1 CTLA-4 blockade in a single molecule.

In June of last year, we initiated NEON-1, the Phase 1 study of Alpine-202 in patients with advanced malignancies. We will have a presentation at AACR next month as a trial and progress poster and we anticipate presenting initial interim data and the dose escalation cohorts later this year. At a high level, the trial continues to enroll well, we are seeing signs of potential CD28 engagement and we'll continue working to identify a dose regimen to move forward in our expansion cohorts by the end of this year as well as initiating a combination study with PD-1 therapies that we are calling NEON-2. We anticipate the third development candidate to enter the clinic, will be ALPN-303.

The dual B cell cytokine antagonist with best-in-class potential for the treatment of B cell-mediated inflammatory diseases. We are particularly excited about this program and are targeting and being ready to initiate the Phase 1 study in healthy volunteers in the fourth quarter of this year. As we advance our clinical and discovery programs, we continue to strengthen key functional areas of the company, as evidenced by the recent hiring of Pam Holland as senior vice president of research, and the promotion of Remy Durand to chief business officer. We're also pleased that we've appointed Natasha Hernday to our board of directors.

Natasha's deep experience and strategic insight will be beneficial to us as we develop our programs globally and consider various business opportunities for the company. With that, I'll turn the call over to our president and head of research and development, Stanford Peng to provide an update on our research and development. Stanford?

Stanford Peng -- President and Head of Research and Development

Thank you, Mitch. As Mitch mentioned, 2021 looks to be an exciting and busy year for R&D at Alpine. We expect to have at least four active clinical trials by the end of the year. And we are evolving into a global development company to ALPN-101.

This first-in-class dual inhibitor of the CD28 and ICOS costimulatory pathways was conceived of for multiple potential autoimmune and inflammatory diseases. And we are now very actively engaged in start-up activities for an international Phase 2 study in systemic lupus erythematosus with an intent to initiate the study by the middle of the year. Our collaboration with AbbVie is quite active and we have enjoyed productive discussions over the past several months as we continue to advance this program as efficiently as possible. For ALPN-202, its first-in-human monotherapy study, NEON-1 continues to progress through its dose-escalation cohorts, and we have been pleased with its progress overall.

As a reminder, this study is enrolling adults with advanced solid tumors or lymphoma, refractory or resistant to standard therapy, including checkpoint inhibitors when indicated. At next month's AACR Meeting, we will present a trial in progress poster which will reiterate the current design of the study. In the meantime, we continue to collect and analyze data from the dose-escalation cohorts. We are encouraged by the early analyses to date and look forward to an opportunity to share the data in an appropriate form later in the year.

In previous preclinical presentations, we demonstrated significant advantages when ALPN-202 is administered in combination with other therapeutic modalities, such as platinum chemotherapy or even other checkpoint inhibitors. Based on such prior observations, we experienced to-date in NEON-1, and in particular, our interest in treatment of cancers in earlier lines of therapy. We have begun planning a PD-1 inhibitor combination study, NEON-2 with an intent to start this trial later this year. We'll provide additional details as plans further mature.

Our third development candidate, ALPN-303 is a dual BAFF/APRIL B cell cytokine antagonist designed for multiple B cell-mediated inflammatory diseases. Our confidence in this program continues to grow as there continues to be translational and clinical validation of this pathway by others, including the recent approval of telitacicept another dual BAFF/APRIL inhibitor in China for lupus. In addition, our preclinical studies continue to suggest superiority of ALPN-303 over other available antagonists in this pathway, as we partially disclosed at the EULAR E-Congress last year. We have initiated clinical trial enabling activities and target being ready to enter the clinic in the fourth quarter.

Finally, we remain enthusiastic about multiple ongoing discovery efforts for both autoimmune and inflammatory diseases as well as oncology. At next month's AACR Meeting, we will present data from one of our novel platform efforts in oncology, demonstrating that fusions of our variant domains are capable of combining checkpoint inhibition and/or tumor antigen specificity with CD28 costimulation. These efforts leverage the extensive knowledge that we have gained in this complex yet compelling field to our efforts with ALPN-202 and are expanding to potential additional applications. I'll now hand the call over to our CFO, Paul Rickey to discuss our financial results for the quarter.

Paul?

Paul Rickey -- Chief Financial Officer

Thank you, Stanford. Turning into our financial results for the fourth quarter outlines cash, cash equivalents, and marketable securities totaled $131.4 million as of December 31st, 2020. This compares to our cash balance of $141.3 million on September 30th, 2020. Revenue recognized under our collaboration agreements were approximately $9.3 million in 2020, compared to approximately $1.7 million the prior year, the increase primarily relating to our collaboration we entered into with AbbVie.

Research and development expenses were $27.2 million in 2020, compared to $35.8 million the prior year. The decrease was primarily attributable to decreases in contract manufacturing and process development of our product candidates partially offset by increases in clinical trial activity to support NEON-1 in 2020. General and administrative expenses for 2020 were $10.9 million, compared to $9.5 million the prior year. The increase was primarily attributable to increases in professional and legal services and admin costs to support the growth and expansion of our business.

Alpine recorded a net loss of 27.9 million in 2020, compared to 41.9 million in 2019. In terms of our cash runway, we accept that our cash on hand, combined with potentially 75 million in pre-option exercise milestones under our collaboration with AbbVie is sufficient to fund Alpine's planned operations through 2023. With that, I will turn the call back to Mitch.

Mitchell Gold -- Executive Chairman and Chief Executive Officer

Thanks, Paul. As you heard from our team, 2020 was a transformative year for Alpine and we continue to make excellent progress across the company's pipeline of clinical and discovery programs. We have several program milestone opportunities this year, including initiation of our Phase 2 study for Alpine-101 and potential achievement of our first milestone under the AbbVie collaboration. For Alpine-202, we expect updates on the dose-escalation cohorts from NEON-1 at a scientific meeting and the initiation of the NEON-2 study.

We also anticipate the initiation of our Phase 1 first-in-human trial for Alpine-303. The first clinical step toward establishing a potential best-in-class physician for this important program. With that, I'll now open the call for questions from the operator.

Questions & Answers:

Operator

Thank you. [Operator instructions] Our first question comes from Ted Tenthoff with Piper Sandler. You may proceed with your question.

Ted Tenthoff -- Piper Sandler -- Analyst

Great. Thank you very much, and really exciting time for the company. I want to get a sense of the clinical update that you might be able to present on 202 later this year. Can you give us a sense in terms of where you are with dosing and/or how many patients we might be expecting? And then I also the second question with respect to the ability to combine with anti-PD-1 inhibitors.

That's going to be a pretty powerful shot, obviously. What should we be looking for just with respect to safety from 202 as it gets combined with the PD-1? Thanks, guys.

Mitchell Gold -- Executive Chairman and Chief Executive Officer

Thanks, Ted. Stanford, do you want to take that?

Stanford Peng -- President and Head of Research and Development

Sure. So we would like to have the opportunity to present this initial data in an appropriate scientific forum. So it will depend on, of course, acceptance at the appropriate conferences and so on, but we're optimistic that we'll be able to do that sometime this year. With regard to the overall number of subjects, I think, we've been allowed -- we've allowed a fair amount of flexibility and enrollment in terms of over enrolling cohorts and so on to gain additional experience with the therapy, and also gain additional pharmacodynamic data that will help us identify the best dose to take forward into expansion cohorts.

So as you'd probably recall from the original design of the study, it's designed as a three plus three, but expect those to be exceeded in some cohorts just based on how enrollment has gone. With regard to the PD-1 combination, overall, we don't necessarily expect the safety to be necessarily excessive compared to what we know already from other checkpoint inhibitor or even checkpoint inhibitor combinations, since the molecule is designed 202, that is, is designed to localize its activity to the tumor microenvironment. And based on our preclinical studies, we haven't seen excessive toxicities or -- and we've seen for it's just generally seen reassuring data to support that thesis. So -- but we'll of course be paying attention to that pretty closely in that trial.

Ted Tenthoff -- Piper Sandler -- Analyst

Awesome, guys. I really appreciate it and excited for the progress this year.

Mitchell Gold -- Executive Chairman and Chief Executive Officer

Thanks, Ted.

Operator

Thank you. Our next question comes from Mark Breidenbach with Oppenheimer. You may proceed with your question.

Mark Breidenbach -- Oppenheimer & Co. Inc. -- Analyst

Hey, guys. Thanks for taking the question. I was wondering -- maybe this is directed to Stanford. Since 202 kind of has its own intrinsic PD-L1/PD-1 blockade component of its activity, why is combining with PD-1 the right thing to do? Maybe you can provide some mechanistic justification for why you're going after that combination first? And I'm also wondering if your NEON-2 you expect to enroll all patients with prior PD-1 exposure or what kind of patient population you would likely target in the NEON-2 study?

Stanford Peng -- President and Head of Research and Development

Yes. So the answer is kind of wrapped up in both questions. That is, we -- as you may recall, we have disclosed some of our preclinical data showing that at least in certain situations combination with a PD-1 inhibitor is certainly not antagonistic, and in many cases may be combinatorial or maybe not synergistic, but at least combinatorial. But from a development perspective, we're particularly interested to get ALPN-202 into patients in earlier lines of therapy.

And in the NEON-2 trial, we anticipate the opportunity to do just that. Kind of leveraging the ability to treat patients with a PD-1 inhibitor, knowing that ALPN-202 is not an antagonist as activity and if anything should be beneficial, that may allow us to get that experience much earlier than we would if we simply took the monotherapy approach as we currently are doing. So to be clear, NEON-1 is enrolling patients that have failed all standard therapies and includes checkpoint failures, whereas, our plan for the NEON-2 are to target patients that are in earlier lines of therapy.

Mark Breidenbach -- Oppenheimer & Co. Inc. -- Analyst

OK. Super helpful. I appreciate the clarification, and thanks again for taking the question.

Mitchell Gold -- Executive Chairman and Chief Executive Officer

Thanks, Mark.

Operator

Thank you. [Operator instructions] Our next question comes from Joe Pantginis with H.C. Wainwright. You may proceed with your questions.

Joe Pantginis -- H.C. Wainwright -- Analyst

Hey, everyone. Good afternoon. Thanks for taking the question. Was hoping to dive a little deeper into your 303 comments, specifically, maybe if you could give a little more about its differentiated profile, while also having as you said it, validation by others with the China approval for telitacicept as well.

Thanks.

Mitchell Gold -- Executive Chairman and Chief Executive Officer

Thanks, Joe. Stanford?

Stanford Peng -- President and Head of Research and Development

Yes. So I may refer you to a poster that we presented at EULAR last year where we compared ALPN-303 to other wild-type tacky Ig fusion proteins, which includes structures that resemble if not our telitacicept. And in those assays, both in vitro and in vivo, we saw more potent activity with ALPN-303, both in terms of just simply pharmacological blocking activity, but also translating in vivo to a few different physiological consequences like more potent or durable effects on B cell populations as well as antibody formation. So we're, of course, we don't know yet without the human data, but we are optimistic that that will translate into more potent PK/PD, which at least as a base case, suggests advantages with regard to dosing regimen.

Joe Pantginis -- H.C. Wainwright -- Analyst

Got it. Thank you. That's very helpful.

Mitchell Gold -- Executive Chairman and Chief Executive Officer

Joe, the only thing I would add on top of that is we think that dual inhibition of APRIL and BAFF is going to be coming under increasing focus for the treatment of lupus and other inflammatory diseases. And as Stanford mentioned, we think we're sitting in a very good position there to create a best-in-class program.

Joe Pantginis -- H.C. Wainwright -- Analyst

Appreciate it, Mitch. Thanks.

Mitchell Gold -- Executive Chairman and Chief Executive Officer

Yes.

Operator

Thank you. And I'm not showing any further questions at this time. I would now like to turn the call back over to Mitch Gold for any further remarks.

Mitchell Gold -- Executive Chairman and Chief Executive Officer

Thank you, operator. Next month, we plan to present posters at AACR for both Alpine-202 and additional programs from our research platform. We welcome your request for upcoming meetings with the team. Please feel free to reach out to Alex if you'd like to schedule some time.

With that. I'd like to thank everyone for participating in today's call and have a great day.

Operator

[Operator signoff]

Duration: 25 minutes

Call participants:

Alex Sharif -- Director of Investor Relations and Corporate Development

Mitchell Gold -- Executive Chairman and Chief Executive Officer

Stanford Peng -- President and Head of Research and Development

Paul Rickey -- Chief Financial Officer

Ted Tenthoff -- Piper Sandler -- Analyst

Mark Breidenbach -- Oppenheimer & Co. Inc. -- Analyst

Joe Pantginis -- H.C. Wainwright -- Analyst

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