All right, everyone, I think we'll get started here with our next fireside discussion. My name's Derek Archila. I'm one of the Senior Biotech Analysts here at Wells. I'm very excited to have ALX Oncology joining me for the next panel here. From the company, we have Jason Lettmann, CEO, as well as Harish Shantharam, CFO. Gentlemen, thanks so much for joining us.
Yeah, thanks for having us. Always a great meeting. Appreciate it.
Excellent. Well, Jason, maybe start us off, just a little background on what ALX is doing, and ALX2004 is doing, and ultimately, we have a couple interesting catalysts coming up, most notably for 2004, phase I update here in the second half of 2026, so maybe we can start to tee that up.
Yeah, sounds good. Well, again, thrilled to be here. Harish is our CFO, but he's also our acting CMO on this panel.
All right.
If there's any tough clinical questions, Harish is the man for that. It's an exciting time for the company. ALX has been at this for about 10 years, and I think there's really been a lot of data, a lot of advancements in the field, and certainly, I think from our perspective, we're just at a really interesting inflection point with both programs.
As a reminder, we're pursuing evorpacept, really a first-in-class and best-in-class CD47. As is often the case with biotech, you could write a novel or two around the history of CD47. For us, the story of CD47 is really a target that's still very, very relevant and important. There's no question about its importance in oncology, and it's been a tough nut to crack.
Our approach has really been one that is different, and we'll talk about that later, but we do think we just continue to see a clinical signal there, and a targeted signal in the patients that we think will most benefit from evorpacept.
The new program, ALX2004, we developed that program in-house. I think these days, that in of itself can differentiate. Dating back to 2021, we really set out to develop new and novel ADCs. We saw an opportunity at EGFR, again, a very relevant and important target, and at a really exciting inflection point there as well.
We've been dosing patients in our dose escalation now since August. I think we've been pleased with how it's been translating. With this data set, we're expecting to share, call it 20 or more patients.
We've shared in the past that we were able to start at 1 mg/ kg. We were able to double to 2 mg/ kg and double again to 4 mg/kg. Over the summer, we shared that we've been able to escalate beyond 4 mg.
In terms of what we hope to share, of course, we want to be able to give investors in the street a sense of safety. It's an important thing in this class. It's been difficult to target EGFR with an ADC, so we want to take off the major EGFR-related toxicities, if you will. So skin, grade 3 plus diarrhea, et cetera, as well as we hope to answer some of the major questions you'd have with a topoisomerase-based ADC, such as ILD.
We, of course, understand we also need to share activity. Again, I think we're hoping to share what we're excited about on the activity front as well.
Got it. So maybe just take a step back with ALX2004. When you were constructing the asset and sell it to build this program, how did you build it to differentiate versus the other EGFRs out there, and really to try to mitigate those safety issues?
Right. Well, the good news here is I wasn't constructing anything. Just a non-PhD, I think is good for everyone. But we were really pleased to assemble an incredible team at the time, led by Jaume Pons , who's probably one of the most successful drug hunters that I know. His goal was really to look at EGFR in a new way.
Historically, and I think it's still the case today, whether it's a bispecific or an ADC, they've looked to the approved antibodies. So they've looked to cetuximab and panitumumab to form the backbone, to form their epitope. Our approach at ALX was different, because we knew that cetux and pani both have EGFR-related toxicities. So we chose an antibody known as rituximab. We believe, and we think we are, the only ADC in development with rituximab as our epitope. We know in ADCs, epitope matters.
Rituximab was developed as a way to avoid the on-target skin related EGFR issues, and we thought it was a perfect vehicle to deliver a payload. Parallel to that, we spent a lot of time optimizing the payload linker. I think what was also unique is we used ENHERTU as our benchmark.
Of course, ENHERTU is the best performing topoisomerase ADC out there, and we used that to really develop and benchmark both our on-target internalization as well as our bystander effect. We found that this ADC is better on both. So what we're hoping to deliver is an incredibly potent molecule that is safer than what's been done in the past.
Got it. You talked about 20 patients with data, and you explained the dosing 1 mg, 2 mg, 4 mg, and now you're beyond four. I guess, should we think about how many patients per dose cohort should we really be thinking about? Ultimately, as I think you alluded to, we really should be focused on safety, because it's going to be fairly small population. Do you think we'll have a good enough sense of the safety data after this at that dose, or do you think we would need to go higher? Where do you think we'll be when you actually put out the data?
Yeah. I think the good news is our assumptions going into this have largely held, which is at 4 mg, we were hoping that would be entering the therapeutic window, and we continue to feel that way.
Okay.
I think most topoisomerase ADCs have struggled to get much beyond five. They've started to run into significant DLTs that have led to an MTD. For us, it's an ability to show at 4 mg and above, we have a therapeutic window, so call it 4 mg to X, and we have some room to play there. I think with this update, it's really an early update on dose escalation with an eye towards expansion.
I think with this update, we're hoping to show that we're on the doorstep of expansion, that we have a very good idea of what our dose will be, or two doses, I should say, to take forward. I think for an ADC, that's what you want. You want a broad enough therapeutic window with clear early signs of activity that you can advance. I think the other really important part about this study is this is 100% U.S.-based study.
We're enrolling across the top U.S. academic centers, so Moffitt, MD Anderson, et cetera. Therefore, I think the playing field, if you will, is a tough one. We know these patients are going to get the best that they can see in the world, frankly, in terms of therapeutics.
I think if we can deliver a tolerable dose and drive some activity, that would be a check in the box, so to speak, for this phase.
Have you talked about the number of patients at each dose, and what percent are above 4 mg?
We haven't commented on that. I think if you just look back and you think about a BOIN design in a phase I.
You call it 3 mg, 4 mg, 5 mg, and then you think about where we'll be. I would hope we're at 10 mg or better, at the right dose, if you will.
Okay.
And be able to comment on that. I think this setup, we're hoping to drive enthusiasm and interest in this program ahead of where we'll be mid-year next year, which is truly proof of concept in the right patients at the right dose.
For a lot of ADCs, that's the inflection point. You then at that point have demonstrated a profile that will really set you up for the next phase.
Again, in terms of the objective of this trial, is it mostly to see no DLTs, or do you want to see DLTs? Also, should we expect, or I guess you tell me, what would you say in terms of rates of EGFR-related side effects that are acceptable to be like, oh, this is actually differentiated, or do you want to see none?
Well, I think it's every EGFR targeted ADC, every ADC-
Right
is going to be dose limited. When you put a payload on an antibody, it's going to drive toxicity at a level. I think for us in dose escalation, just going from 1 mg - 2 mg-4mg and beyond that in a relatively quick stepwise fashion is a good sign already. It suggests that you're not spinning around DLTs at two, for example.
Yep.
I don't think it's realistic to expect no dose limited tox. Every successful ADC has seen those toxicities. I think, again, the most important thing is to get to a therapeutic window that allows enough room to be able to maneuver as you go forward.
Got you. Just in terms of what you view as differentiated from current EGFR therapies.
Yeah. I think we do want to really address skin-related tox. That can be a chronic thing. That can be a challenge. Ultimately, the bigger issues for topoisomerase ADCs, like ILD, of course, we do not want to have a high rate of that, ocular, et cetera, grade 3 diarrhea, et cetera. So again, we are going to see some toxicities. It is always the case, but you want to be able to see toxicities that are predictable, relatively manageable, et cetera, and I think that is what we are trying to achieve with dose escalation.
Got you. With the first update in the second half of this year, what sort of things do you show from an activity standpoint? Obviously, it will be more mature in the follow-up update, but what would you want to highlight here that could give us some little nuggets of-
Well, I think the hope is, and what we have been trying to consciously think about is where are we going with this drug?
What is ultimately going to be the population of interest? I think for us right now, there's no question lung, head and neck, and esophageal are of interest. For us, we've made a real conscious effort to drive patients in those tumor types. Again, given the setting is a very refractive late stage population in the U.S., we want to see activity in those tumor types.
Ideally, the next time we're talking, we're going to have activity across multiple doses and multiple tumor types. I think when you have that paired with a therapeutic window for an ADC exiting dose escalation, you're in good shape. That's what we're trying to share with this update.
I presume when you guys share some of that activity data, you'll really concentrate on those maybe 10 patients at the higher dose or whatever
Yeah
target dose would be.
Right.
To share that.
Right.
Okay.
Right.
That's helpful. And then, maybe just at the follow-up date, how many patients would you expect in the later update?
Next year, you mean?
Yeah.
I think if we do this well, from our perspective, we need to go with speed, with pace, and urgency. There's no question there's an incredible amount of development in the ADC landscape. When we reach that next update, my goal would be to get into the right patients. So let's call it second/third-line lung, second/third-line head and neck, for example, and to be able to deliver proof of concept in those tumor types.
W hat we need to be able to do now is quickly pivot into those tumor types, right? And into that line, versus where we are right now, which is a much more wait-line population. So with that update, I think our goal is to really deliver that, which I think will look more like proof of concept and set us up well for the next study.
Can you just remind us of the benchmarks there for those tumor types?
I think in head and neck, there's a lot of benchmarks, right?
Yeah.
We've seen benchmarks today.
Yeah
No question. In second-line head and neck, you got to be 30% or greater. I think the great news for patients in head and neck is that is a step change above what they're used to seeing. I think there's been some exciting developments in that space already, and we certainly feel like we need to be competitive with those. I think when you look at lung, certainly there's a lot of activity in mutant lung.
Wild type, I think, is much more open a nd when we think about the promise of an EGFR targeted ADC, it shouldn't matter whether it's mutant or wild type. And in the wild type setting, it's probably 30% ish as well. So, we see opportunity across all of those spaces. And I'd add esophageal to that. Second-line esophageal is really wide open. NCCN guidelines are clinical trials basically right now, and more chemo. So there's no question there's a really big unmet need there for those patients as well. So yeah, a lot of opportunity for us.
To operationalize this program more robustly, in terms of we get the data next year, what would you really want to do first in terms of getting into either a larger trial, registrational? Where do you see that? Where are you headed?
I think if we do this-
How fast can you go there?
Yeah. I think if we do this well, our internal goal is to have both programs on the doorstep of registrational studies this time next year. If we can have both evorpacept and ALX2004 pushing into phase III studies when we're sitting here next year, then I think that is success.
Again, given where we are trading, I am also hopeful we are valued at a different range. I think that will come. Of course, that is out of our control, but I think we have two programs now that are both going well. Execution, I think, has been really strong over the last six months, and we should be in a good place to do that, and I think that is what is in our control right now.
Excellent. Maybe that is a good segue to evorpacept and ASPEN-09-Breast. Maybe just talk to us about where you guys are with enrollment there and, obviously, the data is next year. We can tee that up a little bit in terms of the benchmarks and ultimately where we want to take that.
Yeah. Execution has been really strong there as well. For those who have tracked the story, what has really changed is the emergence of CD47 as a biomarker. I think in IO, there has been the PD-1 story and then everybody else, and it has been challenging from a drug developer's perspective. I think what has changed for us, and what we believe could potentially set us up in a way more like pembrolizumab, a gain, I know that is bold, but we think we have a biomarker, and it is our target.
What we have learned both from our breast study as well as our gastric study is that when we have patients that are CD47 high, we can drive a major benefit. That data, starting with our ASPEN-06 data in gastric and then the data we presented at ESMO Breast Cancer in the spring, has really helped elucidate that for clinicians.
That has been a huge boost for site activation and now enrollment. We feel really confident in enrollment and what we are seeing in terms of the pace of patients getting in the study.
Got it. Are you pretty confident those patients, that we will have enough mature data by mid 2027. Everything is still tracking that.
Yeah. Everything is tracking for sure. As you know, this study is, in essence, an all-comers study. We are going to have patients in this study that are CD47 high and CD47 low. That will give us an ability to compare, again, not in a randomized way, but to understand how these various populations are doing in that study. That is something that we are keeping an eye on as we go because we need to ensure that we have enough patients, if you will, in both of those buckets.
Do you cap the number of CD47 low?
We have not done that to date.
Okay.
Again, we just want to have a nice balance. The CD47 high subgroup will be the basis for our phase III.
Yep.
We want to ensure we have enough patients in that bucket, if you will, to make some conclusions.
Got you. Have you guys communicated the expression thresholds or the cutoff for the pre-specified analysis?
We haven't. Right now, what we know is in our gastric study is whether you pick IHC 2/3+ in terms of CD47, IHC 3, so sort of high to medium expression. It really didn't matter. In the breast study, in the breast data we shared in combination with zanidatamab, it was similar, meaning if you just did on/off there versus not, we were able to show a pretty strong benefit.
In that study, we were 5 for 5 in terms of patients that overexpressed CD47. So one of the objectives for this study is to really better define that cutoff, and that's something that we're working towards.
Got it. It seems like the data's fairly strong and very suggestive that this strategy will work. I guess, where do you think the disconnect, is it just more we need to see more data or I don't know, and maybe it's different in the investor community versus the actual physician community in terms of how they feel about CD47 as a biomarker. Although I will say that, as you were alluding to earlier, it's a storied history with CD47.
Right.
Maybe that's got something to do with it. Maybe you can talk to that.
I think with clinicians, they might have a shorter-term memory than investors in pharma. I think there's such a big patient need in this setting. Patients that progress on ENHERTU, it's pretty woeful as to their prognosis. I think everyone understands that, and there's really no IO agents approved in breast. That's our opportunity, is to drive a next-gen IO agent.
I think that they get that. I think for investors, there's still just a lot of history, right? There's no question that when you have a $5 billion acquisition and then a $2 billion acquisition fail, that's going to lead to some skepticism around the target.
As we like to say, it's not the target's fault, so to speak. It's still a very valid target. It's just been a tough one to crack. But I think where we're winning with investors, and we certainly have seen a lot of renewed interest, particularly post the financing we did in February, is when you look at the data with evorpacept, you separate that from the history, it's a strong story. I think that's what's been working.
Can you talk to some of the differences between those legacy programs and certainly the benefit that you've seen more on the heme tox and things like that that really haven't been an issue for evorpacept?
It really dates back to the beginning. If you think about when CD47 was emerging, it was widely understood that this was a primary immune checkpoint that our healthy cells were using, that cancer was hijacking. How do you do that? If you use an Fc active approach and you're going to activate a macrophage against anywhere you see CD47, you're going to have on-target toxicities.
That was the insight behind forming ALX in the beginning, which is you can't do it that way. You have to separate the don't eat me signal from the eat me signal. That's what evorpacept does. Evorpacept effectively blocks the don't eat me signal, and then we utilize an Fc active antibody like Herceptin or cetuximab, or take your pick, to drive a macrophage to eat. It's those two things working together.
Long story short, very long story the active approaches failed, and they failed because of the mechanistic reason, because they were activating against healthy, and ultimately it was a therapeutic window challenge they just couldn't overcome.
Gotcha. When we get to the readout mid-year next year or so, can you just walk us through how you plan to disclose and what level of data that you'll give us? Ultimately, next steps after that, will they be communicated then, or will you have to go out to the FDA and get an an understanding of next steps?
I think in terms of the update, it will be a pretty robust number of patients. Again, feeling really good about enrollment. I think the setup there is great, and the path forward is also very clear. Of course, we are going to need to meet with the agency and get their buy-in on where we are headed. But if you look at the design of the study we are running right now, it is evorpacept plus trastuzumab plus chemo versus trastuzumab plus chemo.
I think that is what the phase III will be is versus trastuzumab plus chemo. For us, it is a pretty clear path. Going into that, we will have three data sets in HER2-positive cancer to base the design and the discussions with the agency on where we go.
Now, should we only expect ORR, or will we get PFS and what level of durability?
That is a complicated clinical question.
Oh. Let us get Harish.
Yeah
in on this.
No, primarily it'll be ORR, and we do believe we'll have some early color on durability.
Yeah
With the data set and enrollment timeline we have, we think we should have some early read on that as well.
Would there be any reason to think that there'd be compression in the signal relative to the high and the low CD47 patients in this trial just because it's larger or different type population? Just walk us through why that could occur.
Yeah. I mean, Harish can weigh in, too, as our sitting CMO here.
Yeah.
I think we're not going to show an ORR of 100%. I'm confident in that.
Yeah. The five out of five.
Yeah. That was phenomenal. I think the benchmarks in this space, we know.
It's about a 15%, is what we've seen from a real world data study, for example, in a post-ENHERTU setting. So we believe as long as we can show an ORR, at least, let's say, maybe doubling that rate and show a meaningful improvement in the PFS. Right now, we're probably what the data suggests is 3-4 months is what we see in the real world setting again. So clearly, again, we see there's a huge unmet need. So if you're able to clear that bar, I think that's going to be a , we see that as a win and a green light to move to the next phase.
The doubling of current standard of care or doubling of the CD47 low patients?
Well, for CD47 low, we know it is a negative prognostic.
Yeah.
It could even be lower.
Yeah.
When we said 15%, that was the overall.
Yeah. Okay.
I don't think we have studied.
Right
I don't think there's been data to.
Yeah
see exactly what the rate, but it could suggest it could be even lower than that.
That's right.
given the negative prognostic.
Got it.
In the breast data we shared in the CD47 low group, the PFS was around 3.5 months. That is consistent with what we see with the real-world study that Harish mentioned, three, four, five months. Again, it is a low bar. If we could post a gain to that, I think that will be a win.
Got you. Maybe think about for the phase III, like a registrational trial, what that would look like and what that typical timeline would be.
Yeah, I am happy to take that, or you can take it, Harish. But I think for us, it is-
Is he going to get paid for this, do you know?
He is. I do not know. I feel like this might come up at year-end. I think it all depends on magnitude of benefit, right?
Okay
If in a targeted oncology play, if you can drive a really significant delta versus control, that then informs your powering. In our gastric randomized study, we had an almost 40% delta in terms of ORR, PFS more than double. Again, if you think about those sorts of assumptions going into a phase III, it is going to be a pretty tight phase III.
You are not going to need to run 600, 700 patients. Again, that is part of the reason why we are doing this study, to help inform that a nd hopefully we are sitting here this time next year, and we are looking at a really transformational benefit for patients, which then should lead to a rather quick phase III is our goal.
What would the control arm do you think be in that trial?
I think it is going to be in line with what we just said.
Okay
15%-ish ORR. I think Harish made an important comment.
Oh, no, evorpacept plus key
evorpacept.
Sorry. trastuzumab plus chemo would-
Okay
it would be the control.
The control arm. Yeah.
Be the control.
Right.
Yeah. Okay, got you.
The only thing I was going to add on, I think it's another important goal objective of the current study is also to help set up the right cutoff point for
Yep
CD47's expression. I do think that's going to be important to, as we go and design and to proactively select, prospectively select those patients in the phase III setting.
Got you. So trial's positive. We're all happy. Everything's going well. I guess, talk about the post-ENHERTU opportunity in breast, and then ultimately what other tumor types this unlocks and where you'd want to go first.
Overall, there's about, I believe about 50,000 patients in the core markets, of which 20,000 patients who probably are more the retains HER2-positive as well as in a high CD47 expression. This is a sizable market opportunity here that we think we can address with evorpacept. That's what we're going for in this trial.
Got it. Other tumors, where would you go after this once you lay down the foundation in breast?
I think the beautiful thing about CD47 is it looks like an immune checkpoint. If you look at the tumor types where CD47 is overexpressed, it's frankly harder to find tumors that don't have it. That's what is exciting is it looks like, again, an IO mechanism. For us, I think gastric would be up there, head and neck would be up there, CRC, and then we haven't even talked about the heme malignancies. Heme was where CD47 started.
Yeah.
Right? NHL would be an opportunity, multiple myeloma, et cetera.
Do you think the CD47 expression would differ across the different tumor types in terms of-
It definitely differs. We know, for example, one of the reasons why everyone started in heme is that it's incredibly high, meaning the vast majority of patients overexpress CD47. Outside of that, I think there is some variability.
There was a recent publication that suggested that breast and head and neck are the right places to go. We agree, and I do think this program gets really even more exciting at that point because we're at a place where we're certainly executing on a phase III. Just within breast, I think we'd have multiple places to go beyond just second line plus. I think if we are successful in this study, it's going to unlock a lot of really interesting indications.
Got it. Just to bring it back to head and neck, so now you have potential two assets.
Right.
How do you think about the development for both of those and where you'd want to play relative to EGFRs, next-gen EGFRs moving earlier to the first line, and we had Pyxis today with second line data and focus there. So where would you look to play with both assets?
Yeah, I think the future of that space, like many, is going to be in combinations. I think with evorpacept, we have a really unique opportunity to combine with the existing antibodies like cetuximab as well as with PD-1 and amivantamab. Both of those bispecifics are Fc active antibodies. I think that's an interesting place for evorpacept to play.
I do think just in developing a combination agent like this, we have a very unique and interesting pitch in terms of BD. Because if you're running one of those franchises, how do you compete? Well, you could compete with another TKI or another ADC, but there's really only one CD47 left is the reality, and that's us. Our ability to find for them a CD47 high population where they could effectively be the only ones competing is really interesting.
I think ALX2004 has unique opportunity, of course, as monotherapy. Again, if you think about what could be competitive with a bispecific, well, I'd argue an ADC targeting the same target has the potential. Certainly, there's been examples of ADCs outperforming a bispecific. So we could certainly do that, or we can combine.
The epitope advantage here is really, I think, one that takes a little time to appreciate, but all of these constructs are fundamentally cetuximab based, and by having a different binding, it allows us to combine as well as to treat after in a way that's really unique. So that's in a rambling overview, how we're thinking about head and neck in a nutshell.
Got you. So let's talk about cash runway and what's funded through that runway.
Yeah. Harish can put his CFO hat back on.
All right. Our cash runway gets us through the first half of 2028, and primarily we are funding the two programs we just talked about, which is the ALX2004 through the dose escalation. I think it is going to be an important data set.
Then through ASPEN-09, the phase II trial. We are also in parallel investing in key areas that it is going to be critical for phase III readiness. I mean, talking about companion diagnostic investments for CD47 and as well as ensuring on the CMC front. So that is where our focus areas are. Clearly the goal being end of the day, how do you ensure that we are phase pivotal ready in both those programs by end of next year.
Got you. Maybe going back to the last set of questions here. You talked about a little bit of the history of CD47 and novel epitope and all those things. Maybe do you feel like that is the most underappreciated thing about evorpacept and maybe just talk to us about what you think people are missing on ALX here?
I think what is fun about what we do is all of these stories and indications just have an unpredictable trajectory, right? I have been involved with ALX since the beginning. I wrote the Series A check. A lot of this was not in my investment memo as you would expect. Again, fundamentally and why I am here and a lot of us are working at ALX is that mechanism in our Series A is the same one in our slides.
So that is what has played out in the clinic. Again, what happened around us is out of our control, but fundamentally the science and the inspiration behind the company is still true. So that is what we think holds. Again, I think where we are winning with investors in pharma is when you take a look, right?
Because as much as you can listen to me or Harish ramble on for a half hour, it is hard to appreciate 10 years of drug development in a short amount of time. So when investors in pharma dig in, I think it resonates.
We had a pharma tell us you should just take CD47 off of your slides and just present the data. So we do not have the power to change the name of the target and say their history. But I do think we have our data, and I think that is what gives us conviction. With ALX2004, again, just at a really exciting inflection point. Again, it does help to have a program and an ADC that has been in our hands since inception, and we know how that drug performs for us.
We know how it performed in terms of preclinical work and in NHPs, and so we have a lot of comfort with it. I think we've been really pleased with how that program has been going as well.
Got it. Jason, Harish, we'll leave it there. Thank you so much.
Thanks for having us. Yeah, really appreciate it.
Thank you.
Thank you.