Great. Thank you, Melissa, and hello to everyone. Thank you for joining the presentation. I'm really excited to introduce you to Alterity. If you haven't heard of us before, we've got an exciting development program that is really gonna meet an important unmet need in treating this terrible disease. These are our forward-looking statements. As Melissa mentioned, Alterity actually means the state of being different, and that really embodies what we're trying to do with our therapies, is we're really trying to change the state of individuals with these diseases from the state of disease to health. Our overall goal is to slow the progression of these diseases by targeting the underlying pathology.
We disclosed positive phase II results from our lead candidate ATH434 last year, and we really demonstrated a striking result with a treatment effect of up to 48% on a functional endpoint that measures the key areas of dysfunction in patients with this disease, MSA. Because there is nothing approved to treat the pathology of this disease, it is a significant market potential with estimated worldwide sales of $2.4 billion. The drug also has the potential to treat Parkinson's disease because the pathology between MSA and Parkinson's disease is similar. The drug is orally administered, which is preferred over the competition that includes intravenous infusions or direct injection into the brain.
The last thing I'd like to mention is that myself and the team that I've been working with for over 15 years, we've been fortunate enough to lead three drug approvals in the neurology area through the FDA. We've been here before, and we know this division of the FDA quite well. This is a snapshot of our development program, and it really centers around our lead molecule, ATH434. I'll be telling you about the program in multiple system atrophy, which are the blue bars. As mentioned, we have completed phase II, and we are in the process of planning for phase III, and interacting with the agency.
As mentioned before, there's significant animal work has been done in Parkinson's disease, and we know this is an important indication, and it's something that we're very interested in. We've collaborated over the years with Michael J. Fox Foundation in the U.S. to do some of that research. I'm gonna tell you about multiple system atrophy, or MSA. There's two ways to describe the disease. One is it's a Parkinsonian disorder, which means it can look like Parkinson's disease, especially early on. That can actually be a little misleading because the disease progresses very rapidly, more like ALS. Because of this, it's really important to try and diagnose the disease early on. There's up to 50,000 patients in the United States with MSA.
The diagram you see on the right side of the slide depicts a typical natural history for the disease, where patients can present with these nonspecific symptoms like urinary problems, sleep disturbance, or low blood pressure when they go from a sitting to a standing position. That's called orthostatic hypotension. Once they start developing these motor features that look like Parkinsonism, or uncoordinated movements and frequent falls, when they come to the attention of a neurologist, that's when skilled neurologists can recognize that this is not garden variety Parkinson's disease, and they can make the diagnosis of MSA. Unfortunately, the progression is quite rapid.
Patients quickly need assistance from a walker, and more than 50% of patients actually require a wheelchair within 5 years of symptom onset, and survival is only 7-8 years after symptoms first appear. There really is an urgent need to develop a new therapy for this disease, considering its rapid progression and the multiple areas that it affects. Before I tell you about our drug, ATH434, I just wanna give you a little bit of an overview about the pathology of these diseases and what we aim to do with our therapy. You see pictured on the top of the slide is a protein called alpha-synuclein, and it exists in this unfolded state, as you can see in the picture.
This is a protein that is present in all neurons, and it enables neurons to communicate with one another, so it's really important. However, in disease, this protein aggregates and forms clumps that render the neurons non-functional. That actually leads not only to the neurons misfiring, but it leads to the impairment that we see in the disease. The other thing that's important regarding our treatment is iron. Iron, as you probably remember, is important for all forms of life and for many critical cellular functions like energy production. However, in the central nervous system, it's also essential for making neurotransmitters like dopamine. It's also important for synthesizing something called myelin, which is the fatty sheath that wraps around the nerve terminals and allows them to transmit their signals rapidly.
In disease, however, there is excess iron in the areas of pathology, and that actually causes this alpha-synuclein protein to aggregate and leads to dysfunction, and it also leads to oxidative injury that damages other components of the cells, like mitochondria or DNA, that are important for function. What we're really aiming to do is to preserve the normal state of alpha-synuclein and maintain normal iron balance in disease. This is an autopsy study of patients who had either Parkinson's disease or multiple system atrophy. When you look at their brains, you can see in both diseases, Parkinson's on the left and MSA on the right, that patients are represented in blue, and healthy controls of the same age are in gray.
We can see the patients with the disease have a lot of iron in multiple brain regions. This is really what we're aiming to target with our therapy. We're trying to prevent this accumulation from happening by augmenting the normal control mechanisms that are in place within cells to manage iron balance. For reasons that aren't fully known, there is disruptive control of iron in the central nervous system. Now, iron is normally buffered very carefully by a variety of mechanisms in cells. When there is excess iron, it overwhelms those normal buffering systems. That leads to the formation of something called reactive iron, which is something that actually causes oxidative injury. That reactive iron also causes that alpha-synuclein to form those clumps, as I mentioned before.
In turn, the alpha-synuclein can actually generate free radicals and can actually kinda cause this vicious cycle. What we're trying to do by redistributing the excess iron in the brains of patients with MSA is to break this cycle and reduce the pathology. This is a diagram of what that would look like. We act as an iron chaperone, which means we bind, and we move the iron around the cell, but we don't remove it from the body. We chaperone that excess iron. In doing so, we reduce alpha-synuclein aggregation and that oxidative injury I described. The overall goal is to preserve neurons and their support cells. In doing that, we aim to stabilize or slow the decline.
Really based on this mechanism of action of how the drug works, we believe that ATH434 is potentially disease-modifying. We do not think it's a symptomatic therapy. I might just add that there is no such disease-modifying therapy that is approved for any neurodegenerative disease. This is a picture of ATH434 on the right binding iron. If you see Fe is the chemical signal for iron. As mentioned, the drug is orally administered, which is preferred by patients and their clinicians. The drug crosses into the brain by penetrating the blood-brain barrier and also penetrates the cell, which is quite important because the important pathology that occurs is ongoing within the cells.
There is broad treatment potential, as I mentioned, not only MSA, but we also have the potential to treat Parkinson's disease, and other orphan diseases such as Friedreich's ataxia. We do have orphan drug designation in both the United States, and in the European Union. We also have fast track designation with the FDA, which affords us various benefits in terms of interacting with the agency. I'm not gonna go into this in any detail, but this is just a summary of the key animal studies that we've done over the years. As you can see, most have been done in Parkinson's disease, but two key studies have been done in MSA. I think the takeaway is that we do reduce the synuclein aggregation, as mentioned. We preserve neurons.
In all of these studies, we showed that we could improve motor performance. This aggregation of data is really what gave us the reason to believe that we could go into the clinic with confidence. I'm now gonna turn to the clinical development. I really wanna focus on one main study, which is our randomized double-blind placebo-controlled study. This is, for those that aren't that familiar with drug development, really the gold standard of clinical trial designs. We randomized a total of 77 patients in equal amounts to receive either 75 mg twice a day, 50 mg twice a day, or matching placebo. Patients really were required to meet clinical criteria for MSA.
We used these two biomarkers that are highlighted in blue to try and maximize the specificity for making a diagnosis to enroll these patients. The key endpoint is listed here in blue on the right side of the slide. That's a bit of a mouthful. It's called the modified UMSARS Part One. UMSARS, I'll describe on the next slide, really just stands for the MSA Rating Scale. We also looked at secondary endpoints like the Orthostatic Hypotension Symptom Assessment, wearable sensors, and of course, safety, as we do in every study. As mentioned, this is the Unified MSA Rating Scale. This is a scale that was developed several years ago specifically to assess disease severity in MSA.
What you see listed are the 12 domains that are largely affected in this disease that can have a big impact on quality of life and daily functioning. Things like speech, swallowing, fine motor controls that allow patients to cut food or dress themselves, but also walking, falling, those low blood pressure symptoms associated with standing up, that's the orthostatic hypotension symptoms, and other domains that are affected. What's important about this scale is not only does it assess severity, but it is the scale that the FDA and the European authorities, and I dare say the TGA would really recognize as the basis to support an approval for this condition. These are the baseline characteristics of the patients coming into the trial.
What you can see is, the average age was in the low 60s, which is typical for MSA, about 6-8 years younger than Parkinson's disease. A pretty good split, in terms of males and females. Then you see the various scales mentioned, that we measured. In general, there were similar baseline values, maybe some small differences, in certain scales. We did incorporate those small differences into all the analyses, that we conducted. The one notable symptom where there was an imbalance at baseline by chance is severe orthostatic hypotension, and that's a drop in blood pressure of 30 mm or more when you go from a sitting to a standing position.
Just by bad luck, we had about 29%-30% of patients in the high-dose group, whereas we just had 4%-5% in the lower dose groups. This does affect how we interpret some of the clinical data, because this severe orthostatic hypotension is a predictor of rapid disease progression. This is the main clinical result I want you to focus on. This is the MSA rating scale that's plotted on the Y-axis. Higher scores on this scale are worse. What you see is over the course of a year that those patients that receive placebo increase their score by about 8 points over that period of time, whereas both dose groups did separate from placebo.
We see the difference at 50 mg, which is about 48% lower than the placebo change, was statistically significant. The 75 mg dose group had thirty percent less decline from baseline than the placebo. Again, a 2.4 difference also very clinically significant. The minimal clinically important difference on this endpoint is 1.5 points, so both dose groups were effective. Now, if you recall that prior slide I mentioned, where we had a greater degree of that severe orthostatic hypotension at baseline. When you correct for that largely addresses the difference between the two dose groups.
What's notable is that with a small sample size, the variability in this endpoint, the important point is that both dose groups are effective. This is a scale that measures the symptoms associated with that low blood pressure when people move from a sitting to a standing position, something called a patient-reported outcome. Patients record their symptoms both at baseline and then at various time points afterwards. Again, on this scale, higher scores are worse, and we see placebo patients increase by about 6 points, whereas the two active dose groups stabilized on average. This is actually a very important finding considering how debilitating the symptom is because it prevents patients from walking or standing and conducting normal activities of daily living.
This is another important biomarker that we assessed. It's a digital biomarker that's assessed by patients wearing a pendant around their neck at baseline and then every three months thereafter. We're able to assess their activity in an outpatient setting, which is quite different from assessing it on a neurologic exam. Looking at these parameters, if you take total step count or total walking time, again, on this score, on this measure, lower scores are worse because this means patients are walking 2,500 steps per day less at the end of one year than they were at baseline. If you compare that to the 2 active treatments, they lost about half that number of steps, and the same is true for total walking time.
We see similar patterns for episodes of walking or total standing time. These are important parameters, and if you think about the natural progression of the disease with individuals going from, you know, walking to requiring a walker and then a wheelchair, any extension of their time to walk and be mobile is very important. Side effects are also very important to monitor. What's really exciting is that we really didn't see any CNS adverse events associated with the treatment. There were similar rates of overall adverse events between the two dose groups and placebo. There were no serious adverse events or severe adverse events that were related to study drug and again, similar rates between placebo and active patients.
This is just a quick snapshot of the neuroimaging, which was the key endpoint. The change in iron was the primary endpoint of the study. What we did see was target engagement, as indicated by reduction in iron accumulation, in these two regions, called the pallidum and the putamen. More consistent effects were seen at the 50-mg dose group, where we also saw numerically less iron accumulation compared to placebo. This did demonstrate target engagement.
Regarding brain volume, this is a tool that we developed and piloted in the study, where we showed that if we looked at the change in brain volume over time and then compared that to normal controls, we see that the patients in placebo in gray at 52 weeks were about a half of a standard deviation less than age-matched controls. We see trends, small trends of less atrophy in the two active treated groups. Now, these were not statistically significant. The study was not powered to look at these differences or show a significant effect.
This is really encouraging considering that the disease itself is brain atrophy in these MSA-affected areas. Regarding commercial assessment, we got an independent group to assess our data, and they developed a target product profile based on our phase II data and then surveyed 100 U.S. neurologists, half generalists and half specialists. Overall, they demonstrated that there was a strong intent to prescribe with more than 70% of neurologists being extremely likely or very likely to prescribe the drug. That's really based on the substantial unmet need that they recognized and the fact that there's really nothing to slow the progression of this disease.
Based on reasonable commercial assumptions, we estimated peak sales of $2.4 billion based on sales in both the U.S. and the rest of the world. In summary, our foundation is set, really for the future in going to phase III, as we've demonstrated a robust efficacy in our phase II double-blind study in MSA. The commercial assessment reinforced that with estimated peak sales of $2.4 billion. Right now we are preparing for interactions with the FDA on various aspects of our development program, and we are targeting an end-of-phase II meeting by the middle of the year.
We are actively preparing for phase III in terms of manufacturing drug, and we are beginning to select vendors to help us conduct this trial. Also, over the last six months, we've really been expanding our staff by adding key positions. We recently added a Chief Medical Advisor, Dr. Daniel O. Claassen, who is an expert in movement disorders and MSA, and has been really an important architect of this overall program. I'm gonna pause there and open it up for questions, turn it back to you, Melissa.
Thank you. Also interesting and very exciting, what's ahead, David. In layman's terms, what excites you the most about ATH434 and the potential?
You know, I mean, if you first talk about MSA, you have to understand this is really a terrible disease. I mean, I think it's as I mentioned, it's analogous to ALS or cancer, in that there and there's really nothing for these patients. To be able to demonstrate any evidence of disease slowing is really exciting. As mentioned, neurologists are in search of a disease-modifying therapy, something that can really slow down the course of disease. That's not been shown before. For Parkinson's disease, it's not been shown for MSA, and you know, it's questionable whether or not the drugs that have been developed for Alzheimer's disease are really slowing the progression.
I think it's that slowing down of the progression of a very aggressive disease is what is most exciting and what really motivates me and the entire team at Alterity to drive this program as forward as fast as possible.
Yeah, changing lives. That's great. What are the key milestones in terms of investors looking at ATH? What are the key milestones that they should be watching for over the next 12 months?
Yeah, I think, you know, we would aim to update the market as soon as we have clarity on the phase III program. As mentioned, we're targeting an FDA interaction, a so-called end-of-phase II meeting. That's where you propose your phase III design, and you get agreement on the design, the population, the study endpoints. We expect, if that meeting does happen mid-year, that we will be able to disclose the outcome of that meeting sometime in the third quarter. Obviously, we don't know exactly when that meeting is gonna happen, but we will provide an update to the market when we get that feedback. After that, we expect to be able to start the trial, the phase III study, about six months after we get that.
I think the initiation of the phase III study after we disclose the outcome of the end-of-phase II will be the two key milestones. We obviously are you know interested in other development programs and advancing this towards other indications. Any movement in those areas would also be things that we would disclose.
David, I've got a question from James Martin, who has dialed in. Will the 201 study results be published in a peer review journal? Is this needed before FDA meetings?
Yeah. The answer is yes, it will be published in a peer review journal. We've been working on the manuscript for some time, and I expect it will be submitted quite soon. The second part of the question is it required? No, it's not required to have it published in a peer review journal before you go to the FDA.
I've got another question. Whereabouts is the clinical trial phase III being held?
Yeah. The phase III study is gonna be a global study as the phase II study was. We expect it will be conducted in certainly Australia, the United States, and several European countries. Last time we had three countries, we may have more like four to five European countries for the phase III study. Because these patients are difficult to identify and to recruit, you do need a large number of centers that are very skilled in identifying these patients in order to recruit the study in a reasonable amount of time.
In terms of the ATH434 being utilized in other indications. You've suggested Parkinson's. Is there an opportunity that this could help further than Parkinson's or MSA?
Well, Parkinson's, yeah, Parkinson's is probably the most important one for us to focus on. As mentioned, I did show you that there is iron accumulation in the brain of patients with Parkinson's disease. They also have this misfolding protein, alpha-synuclein, in the areas of pathology. Given that overlap, there is significant interest in advancing ATH434 into a Parkinson's program. Now, before we would do something like that, you know, additional resources would be needed. But we'd also need to have clarity on the patent situation, which we have been really aggressively expanding over the last year or so. You know, we're hoping that we can have some good news in the patent front that will enable us to actively pursue Parkinson's disease in the future.
As you mentioned, there are other diseases where iron is really important. I mentioned Friedreich's ataxia, which is a rare orphan disease. There's another form of Parkinsonism, a disease called progressive supranuclear palsy or PSP, where there is tremendous iron accumulation in the areas of pathology. The drug can be used for multiple indications. We're not gonna be restricted to just using it for MSA. It's just gonna be a matter of, you know, time and making the drug and having enough staff to run multiple development programs.
Yeah, of course. You've shared that there's obviously these really encouraging and positive trial results. How confident are you that these results are going to be carried through into the phase III trial?
Right. Well, that's always a question. But I have to tell you, we know a lot more about this population, and we know a lot more about our drug in phase III than we did in phase II. You know, so we, you know, we know exactly what treatment effects we saw. We know, you know, by the time we start the study, we'll have a discussion with the FDA about the dose level. So I do feel very confident going to phase III because the trial is not gonna be that big. You know, the phase II is 75-80 patients. The phase III study is not gonna be much more than 200 patients.
When you make a relatively small incremental increase in sample size, going from just 75 to 200, you can keep the same very careful approach that we applied to the development in phase II while we move into phase III. I am quite confident as we go into phase III.
We've probably got time for one last question. I'm gonna throw it to you. If everything goes to plan, David, how big could this be? What, how big could this opportunity be for the company?
Well, it would be transformative because, you know, I mean, if you look at our estimated peak sales in MSA alone, it's huge. Now, obviously, you need to be successful. We know that we have to reach those milestones. Then if we're successful there, that's gonna really provide the engine and the resources for going for Parkinson's disease. You know, those two things alone would be very important for the company. I would say very important for patients with these degenerative diseases. Parkinson's obviously affects a lot more people. I think bringing that into focus and as a potential development candidate and approval would be even a lot bigger than we've shown for MSA.
Thank you so much, David. We look forward to having another conversation very soon down the track and keeping everybody updated. Congratulations on what you've achieved so far, and we're wishing you all the best for what's ahead. Thank you so much for joining me today.
Great. Thank you. Thanks everyone for attending.