Good morning, everyone. Thank you for joining our Piper Sandler Healthcare Conference. My name is Yasmeen Rahimi . I'm a Senior Biotech Analyst here at Piper. Really thrilled to have Lawrence from Aligos. Thank you so much for being here with us, and it's a pleasure having you at our conference.
Lots to discuss over the next 25 minutes. I think we'd love to spend the time on the hepatitis B program, which I think a lot of investors are excited about. IND has cleared. You're about to kick off the study in Q1. Just give us a broad perspective. Where are you in terms of execution? What's a rate-limiting step to start the study?
Yeah, just to remind everybody, we have a novel capsid assembly modulator, and we've been able to show great data, both in terms of reduction of HBV DNA, which looks to be superior to the current standard of care therapy. But also, in addition to that, through a mechanism of reducing cccDNA, we've seen antigen drops. So, log reductions in HBV surface antigen, log reductions in HBV core-related antigen, and log reductions in HBe antigen.
And because of this data that we've seen that looks to be superior against standard of care nucleotide analog therapy, we're going to be doing a head-to-head active comparator blinded study for phase 2 in both HBe antigen and HBe positive patients. As you mentioned, we have opened IND, so we've had consultation with the FDA and submitted our IND, and it's now open.
We will be submitting the phase two protocol to that IND in the coming weeks, and in addition to that, we've had consultation with the FDA, EMEA, and the Chinese regulatory authority confirming that our monotherapy can go forward with chronic suppression as a primary endpoint,
and that makes our company one of only two companies now that is on track for regulatory approval in HBV, the other being GSK with an antisense oligonucleotide that addresses a small segment of patients, but our compound is addressing the vast number of HBV patients throughout the world.
You guys unveiled earlier in the year the design of the study that you're testing against the nukes. Is there any aspect of it that could change as you're having regulatory discussions, or is it just a formal?
As you know, the FDA is in flux, right?
Yeah.
There's a new head of the FDA coming in. We have a new head of Health and Human Services, so it's hard to predict what direction that will go. Based on the written guidelines from the FDA that they affirmed with us in writing, I don't anticipate there to be any great change in the protocol design, but we'll see as we submit the data to the agency.
From sort of clinical execution, how many total sites are approximately you're hoping to kick off? Timing on how long you hope enrollment would take?
Sure. So this will be a study in both E antigen positive and E negative patients. You're probably aware that in the West, the majority of our patients are E negative. And we do have E positives in the West, but primarily those patients are located in Asia. So we'll be conducting a multinational study in the U.S., in Europe, as well as in Asia. We would anticipate that the E antigen positive patients would enroll faster.
Okay.
I'm sorry, the E antigen negative patients would enroll faster than the E positives, and as a result of that, we built into the protocol independence of those different cohorts, so when the E antigen negatives are completed, both the active comparator group and our treatment group, we can unblind the data.
Okay.
We don't have to wait for the E positives. Because this is a large, complicated study, we'll be doing clinical trials in several countries, and we anticipate north of 50 sites for this. At this point, it's very difficult to predict the enrollment of the study because we have to see as we get out there the enrollment. I'd hate to do that. I will point out that this is likely to be a two-year endeavor. We have a 48-week treatment period. We have an enrollment period. In addition to the 48-week treatments, we'll be rolling over patients into an open label study. The patient on the nuke comparator arm, this is actually interesting data. We anticipate they won't be fully suppressed with the nukes.
They'll roll over to open label 184, and we'll have a chance to see how we can suppress further nuke suppressed patients with 184. In addition, because it's a long blinded study, we're going to be running in parallel an open label study so we can report data out, and in that open label study that's going to be very important, we're going to have paired biopsies.
Yeah.
That's going to allow us to quantitate a number of important HBV endpoints, including quantitatively looking at HBV CCC DNA and looking at integration into the host chromosome. Those data will get reported out through the whole period while this study is blinded and being run.
And the open label will kick off. Will patients have to come off?
The same time.
The same time?
Yeah.
Then be eligible. Okay. And as you're thinking about E positive and E negative patients, what distribution do you hope to see in this study?
So we're going to stratify the study. We'll have equal numbers of E positives and E negatives. And there's another important point about this study. So when the initial nucleoside analog treatments were approved, there were guidelines written by hepatologists. And those guidelines were very biased towards patients having hepatitis as defined as having abnormal liver tests.
And what we've learned since that time, and there were just papers at the recent AASLD meeting, is that patients with normal ALT or untreated go on to end-stage liver disease and liver cancer. So the definition of a hepatitis B patient required to have chronic hepatitis is really going away.
And in our enrollment criteria, we're going to enroll both ALT normal as well as ALT elevated patients. And our idea is that instead of getting an indication for chronic hepatitis B, our indication will be for chronic HBV infection. And so we won't have that criteria. And that's going to expand the market to make patients eligible for therapy that currently are not eligible by the current guidelines of therapy.
Okay. I think another distinguishing factor is that investors that are new to chronic hepatitis B may not realize that the regulatory path is way simpler than the antigen suppression data that we need. If you could just put into perspective, what's the path to market to how big is the current market opportunity? Like right now, from a revenue perspective, how well do the nukes do?
Yeah. So we've done.
Keep changing the whole paradigm.
Yeah. So our idea is that because our drug has a novel mechanism of action and we inhibit replication, which with nucleoside analogs and nucleotide analogs also inhibit replication, but not to the same degree that we can. We have further suppression than they do. But in addition to inhibiting replication,
we also block a major step in the viral maintenance, which is the reestablishment and replenishment of cccDNA. And cccDNA is really the reservoir for the virus. So the more cccDNA you have, the more viral burden you have. And by reducing that cccDNA, we're reducing the viral burden for the patient. So we believe that our therapy is, first of all, it will be the first new mechanism approved in HBV in over two decades.
Yeah.
And it will benefit these patients because it will reduce the amount of integration that occurs and that's associated with cancer and reduce the amount of antigens that are produced that are also associated with bad outcomes. So we believe this will become the standard of care.
Not only the standard of care for chronic suppression, but all the therapies that are aimed at functional cure are using some suppressive therapy in the background. So we believe that our therapy would replace nukes as the therapy of choice. So it's really a therapy for all HBV patients. The current market is around $1 billion a year. Even though there's generic competition on the market, there are still branded molecules in there. Selling around $600 million-plus a year for the branded compounds.
We have done initial research with payers, and they will pay a premium for this therapy because it does things that the generic drugs don't do, and we feel comfortable in saying that the market potential for this compound is north of $2 billion at this point.
Yeah. And just also from a competitive landscape perspective, right, there are no other mechanisms that are pursuing first-line therapy, and this could be another game changer. Yeah.
No. And there are no other capsid assembly modulators that have the data that we have. One of the big breakthroughs that we've been able to achieve is no drug resistance.
Yeah.
So the first-generation capsid assembly modulators resulted in the emergence of resistant strains within 12-24 weeks of therapy. We just reported at AASLD that we sequenced the HBV DNA of our patients. And at baseline, some of those resistant variants were present before they received treatment. Now, we know that if you would have given an earlier capsid assembly modulator, those would have emerged and the drugs would stop working.
Our capsid assembly modulator, given its high potency, has high enough concentration to inhibit those resistant variants. And some of them are just not resistant to our compound. And so none of those emerged. Even though they were present at baseline, they did not emerge. And now going out up to 82 weeks, we have no resistant variants emerging.
Just to give you an understanding of the data we have in the E positives, 100% of patients are below the cutoff of 10 international units by week 80. Then in the E negatives, 100% by week 60 are all negative. Very broad and complete suppression of the virus. In addition to that, there's really two cutoffs that you look at. One is below the 10 international units. That's the regulatory approval cutoff.
The assay can tell you if the target is detected at all. In our E antigen negative patients, most of them are target not detected. We can't measure any HBV DNA in those patients. Some of the E positive patients, which started out with 10 to the eighth international units of HBV DNA, are also target not detected at this point. We're getting very deep suppression of the virus.
Okay. And at the point in terms of powering or superiority, is it just as long as you show superiority to nukes, then you would move forward to a registrational path? Is that your vision?
Well, so there's.
There's a certain, yeah, security margin that you communicated or think about that you want to have.
Yeah. So there's two levels of superiority. One is on the primary endpoint of DNA suppression, but there's also the secondary endpoints that nukes have no impact on. So we have, again, quantitative log reductions in all of the antigens and S antigen and E antigen and core-related antigens. So we would have superiority on these secondary endpoints that are unaffected by nukes. In addition to that, we make all of our patients are HBV RNA negative.
You might ask, why is that an important endpoint? Well, HBV RNA has been associated with liver cancer. So the higher your HBV RNA, the greater your risk is for liver cancer. Mechanistically, we know that HBV RNA binds to a microRNA called miR-122. And you might remember, I know you did graduate work at my alma mater, Indiana University, in liver disease. You might remember miR-122 is a tumor suppressor.
Yeah.
So if you bind up miR-122, you're opening the door for expression to oncogenes. So we've shown that we block the encapsulation of the RNA and that naked RNA is now degraded in the cell. So we're eliminating HBV RNA and therefore eliminating that miR-122 interaction.
So we're not just superior on the primary endpoint. And the way I like to think about it is that we have more complete suppression of the viral life cycle than nucleosides, which are only affecting one step of the viral life cycle.
No, that's helpful. I think it's very clear that from a strategic perspective, there's been very little innovation. And maybe that's why investors have been more thinking of second-line therapies that are in development rather than realizing that you're changing the whole paradigm with potentially a first-line therapy.
What do you, and I'm sure strategic interest remains high, what was the commitment? What led you guys to just say, and I know at some point you had a bid right on the table and you chose not to pursue that? I would love for you to talk about that and what happened because even early on, before all this data that you shared, you could have partnered this very easily.
We believe that this is a disease transformative asset. We're going to change the way hepatitis B is treated. And as such, it's a company transformative asset. And we believe that the value we could capture for the molecule in phase 1 is not reflective of the true value of the asset. We're going to do this head-to-head study.
We're going to show superiority again on primary endpoints as well as secondary endpoints. And then we're going to assess where we are. And if you use HCV as an analog, there were several companies that actually launched their companies based on launching a hepatitis C drug. And my favorite example is Vertex. And Vertex is Vertex because of a protease inhibitor they had for HCV. And the revenue from that, they used to acquire a company that led to their franchise in cystic fibrosis.
So I'm not telling you that we would partner the asset after phase two. It's a very tractable market. The hepatology community is very small. We have experts in our company that have worked in hepatology for many years, including myself. And we're going to take this as far as we can. Now, that doesn't mean we won't do partnerships for combination studies.
And we already have a partnership now for a combination study with Interferon. As you probably know, Interferon is the only drug approved that causes functional cure. And what I will say about functional cure is you have to think about, why do I call it functional cure and not cure?
Yeah.
That's because functional cure, you don't get rid of the virus. What you do is you change the immune status of the patient such that the virus in a normal setting for HBV is controlling the immune system to one where the immune system controls the virus. Functional cure is defined as sustained loss or lack of measurement of HBV surface antigen, loss of HBV DNA measurable, and normalization of ALT with or without anti-HBV S antibodies. Now, if you take a patient that has a functional cure and immune suppress them, HBV will come back.
Yeah.
Okay. So interferon can cause functional cure in a select number of patients. And it's actually dependent on the patient population you start with. In fact, the interferon responsive population is very similar to the population that's responsive to Epivir, adefovir. So you need lower baseline surface antigen, elevated ALT, and lower DNA. And those patients will respond to interferon as well as these other therapies.
So we're going to combine our drug with interferon. And we've partnered with a company called Amoytop, which a lot of people in the West don't know who they are, but I can tell you that they're the largest producer and manufacturer and seller of pegylated interferon in Asia. And at AASLD, they reported on a study of 10,000 patients treated with their pegylated interferon, which is a generic version of pegylated interferon alpha-2b.
So we're in the midst of starting a study with them. It'll start sort of mid-year next year in combination with pegylated interferon. And in that patient population, we'll be looking to enhance the functional cure of those patients.
Perfect. Very helpful. Would love to also spend a few minutes on your THR beta asset that was presented as a late-breaker at AASLD. It was very well received. And I think we also saw the ESSENCE data, which I think took a big overhang on the MASH stocks out.
So how do you, stepping back, like now that we have the data on ESSENCE, we know the excitement around THR beta and you have a strong asset. What is the strategic interest? Where are you in the process? And how do you see the market is going to evolve? Because there is a definitely.
Let me say a few things. Just to recap, we did a phase 2A study. Dose response of our drug, doses ranging from 0.3 to 0.9. That's about a hundred-fold less drug than resmetirom, for example. We met our primary endpoint with patients' placebo-adjusted median reduction in liver fat by MRI-PDFF of 46% at the best dose group. 70% of those patients achieved 30% or greater reduction in fat.
Importantly, 20% of the patients who qualified for the study were on stable GLP-1, which is an interesting statistic in and of itself in that they were on GLP-1, yet they still qualified for our study. In the placebo group, all of the patients on GLP-1 had worsening of liver fat. In our active group at the 0.7 and 0.9, all of the patients on GLP-1 had a 30% or greater reduction in liver fat.
So we see this as important data saying that beta thyroid agonists can complement GLP-1 agonists. And I think the theme that we saw at AASLD in that late-breaker session had a lot of great data, including the long study of semaglutide in MASH, was that we need combination therapy. And you know that we've been saying this for a long time. And if you think about what combinations make sense, I think of four nodes.
One is weight. So the GLP-1 and dual receptors will work on that. But we know that's not enough. The other is the metabolic defect. We know that beta thyroid agonists are one class of compound that can correct metabolic defect. There really isn't been work done or has been work done in the inflammatory component because there's a lot of immunology that gets changed in the inflammatory component.
The last is the fibrogenic effects. We saw good data on FGF21 molecules and some interesting long-acting FGF21 molecules. I think all those classes are going to combine, not in every patient, but based on eligibility. I would say that patients that are F3, F4 are going to need more intensive therapy than patients that are F1 and F2. One of the other bits of data that we presented was our tolerability profile.
We reported no difference in our GI side effects of our drug versus placebo. That's a market difference between our drug and Resmetirom and the FGF21 compounds, which all have significant GI toxicity. In addition to that, we saw other cardiovascular benefits from our drug. In particular, we saw lipoprotein(a) reductions, dose responsive lipoprotein(a) reductions.
And this is a lipid that is not responsive to statins and is associated with atherosclerosis. So we think this drug has a role. And we think we've been saying for a long time, in 2018, when we started the company, we looked at the pharmacological properties of Resmetirom and Viking Therapeutics drug, and we made improvements through chemistry. And those improvements have led to better efficacy, better safety. And the last one we didn't say much about, but that's our drug-drug interaction profile.
So our drug is given at such low levels, and we dialed out the CYP inhibitory properties. And now you see the AASLD guidelines for Resmetirom talking about drug-drug interactions with statins because of CYP inhibition. And so that's going to be a problem for chronic administration of these drugs. And we don't have any of those liabilities.
So that's a long-winded way of saying what is our drug. You asked me about the partner. Following AASLD and presentation of our data, there was a lot of interest in our drug. I can't say much because these are private conversations, but we're in discussions with multiple potential partners. The ideal partner is somebody that is a multinational company, global company, and someone that has other modes of action, preferably in different categories.
So either in the weight aspect or in the fibrogenesis aspect. I think ideally, this is going to move to an all-oral market. Right now, GLP-1s are injectables. But as you're aware, there are a number of people working on oral GLP-1s. And I think ideally, what you'd like to see is a single pill that has these different agents in them. So that's something we're looking at partners for. Our drug, because it's such a tiny dose, can easily co-formulate with another drug. That makes it quite attractive.
No, that's important, and I think that in terms of sort of for investors that are kind of taking a fresh look at Aligos, 2025 is sort of a very transformational and important year from a potential partnership news that you can get, the start of the hepatitis B phase 2B study, then that will roll into an open label. Is there other activities and catalysts that you think you want to flag? Because I mean, that's already a lot.
That's a lot.
It's frustrating, but anything that you can think of.
I think that those are the activities. Yeah.
Perfect. Well, team, it's wonderful to have you. It's not every day that a company is changing the paradigm of medicine. So excited for this study to kick off and a great 2025. So thank you to the team for a great study.