ALTERITY THERAPEUTICS (ATHE) FIRESIDE CHAT - ALLARITY THERAPEUTICS INC

All right. Welcome back, everyone, tuning in to today's Biotech Catalyst Conference here at Craig Hollam. My name is Adam Vogel. I'm a senior biotech analyst here. And today with us, we have from Alterity Therapeutics, CEO David Stamler. David, thank you for joining us and taking the time to speak with us today. Hey, Adam. Good to be here. Before we jump into Q&A, I'd love to just hand it over to you for a few opening remarks, maybe on what's been developing over at Alterity the last six or so months and what we have to look forward in the coming 12? Yeah, so the last 6 months has been quite active. We've had a lot of progress on our regulatory interactions in terms of working on our study design and our protocol. And we've had a series of favorable interactions with the FDA, as well as pursuing similar type of feedback from the European authorities. And then we're really, we've been working in earnest to try and set up the phase three study. So that's been a major focus of ours you know, in this period of time. And then we're, you know we're working hard towards reaching that goal and really trying to deliver this new therapy to patients with MSA. Awesome. Perfect. Yeah, maybe just moving from there, kind of just making that case for the phase three trial and multi-system atrophy. For investors coming into the alterity story today, what is the strongest reason to believe that ATH434's phase two functional benefit can be reproduced in a larger MSA trial? Yeah, so I think what gives me great confidence about our phase two trial results is the breadth of efficacy across different clinical endpoints. You know, regulators always want to see, you know, clinical endpoints that they believe are meaningful. And that's why the primary endpoint in our phase three study, the MSA rating scale, which was, you know, which we tested in phase two as well, demonstrated a very robust signal along with other global measures of the clinician assessment. But then the other data that we looked at in the trial that we think is important are so-called patient-reported outcomes. The FDA likes these as secondary outcomes because there is no kind of filter between the patient and the clinician, and it represents the ones that we're targeting and that we tested in phase two represent important symptoms that are part of MSA. And then finally, we do have objective measures, markers of or measures of physical activity in the outpatient setting that addresses a cardinal manifestation of the disease, which is the immobility that patients with MSA experience. So seeing the breadth of efficacy across all those endpoints with very consistent results, and then I would be remiss in not mentioning a very favorable safety profile is really what gives me confidence that not only are we targeting the underlying pathology of the disease and slowing its progression, but that we are doing it in a manner that is well tolerated by this rather fragile patient population. Got it. And then I guess kind of on the flip side of that, what is the most important uncertainty that phase three still needs to resolve here? You know, I don't see that there's any major uncertainties. The one thing that we always, you know, we try to do, if at all possible, is keep phase three as similar as we can to phase two. So we feel quite confident that we are identifying a patient population in phase three that is similar to phase two, maybe somewhat refined and further de-risked, which we can talk about if you like, but that, you know, that we're confident that we know how to select the patients that actually have MSA. And we've done a natural history study to try and get us to that and learned a lot from phase two. The other thing, so some programs in development don't always do a randomized double-blind trial in phase two, or it's not well-powered. So I think we've got a very good insight onto how the drug is acting and how to select the patient population. There's always inherent uncertainty in phase three regarding the magnitude, say, of the treatment effect, although we did see quite robust efficacy at both doses that we tested in phase two. But there's intrinsic variability. So I think a larger phase three study will give us, you know, another important data point with a large sample of patients. And then we'll obviously look to fully characterize the safety profile in a larger data set. So, I think it's really looking to reinforce what we found in phase three, but I don't see any inherent uncertainties about how we're proceeding with that trial. Got it. And yes, we'll certainly dive into kind of delineating the MSA patient population from those other indications that commonly get confused with it. But maybe first, you recently reported a new analysis at the MBS conference this month from the phase two trial examining the efficacy and biomarker responses of 434 and MSA. Could you take a moment to walk us through what you observed there and what the analysis tells you about how to design and analyze the phase three? Yeah. So the analysis that was done was still focused on the MSA rating scale, which is the important endpoint. And what was done in that trial or in that presentation used a somewhat different methodology for analyzing the data. And it was done so that we could try to, if you will, sync the clinical data with the neuroimaging data. It's a little detailed, but the way they were analyzed in the phase two study and what we've released publicly so far, used one analysis for the neuroimaging, which is appropriate for the data collection and the frequency of the time points, and a somewhat different analysis method for the clinical endpoint because we had more measures on the MSA rating scale. What this analysis did was it kind of harmonized those two. We applied to both endpoints, the same analysis model, the mixed model with repeated measures. And not surprisingly, but reassuringly, we did see the same efficacy signal as we did and what we had released previously. So I'd say it's similar, but in a way, it's how we plan to analyze the data for phase three using that mixed model. And importantly, it still showed a very consistent treatment effect of around 50%, I think slightly over 50% for the 50 milligram dose group. Got it. All right. And then maybe just on dose selection. So in its phase two, 434 is 50 milligram BID dose produced a clearer functional signal than the 75 milligram BIT dose. What gives you confidence that this is the right pivotal dose? And, you know, how much of the apparent difference from 75 milligrams can you explain with exposure and maybe patient characteristics? Yeah. So, you Know, for those who don't know the data so well, we did see a somewhat a larger treatment effect at 50 milligrams than at 75. And we think, I've thought all along, that this is largely a population issue, not a drug issue, because we didn't see any evidence of increased toxicity at 75. I think that patient population was slightly more severe and behaved a little bit differently. Importantly, the treatment effect that we saw at both dose levels exceeded what's referred to as the minimal clinically important difference of 1.5 points. So we exceeded that at both dose levels by a substantial amount. Now, we did look at baseline differences in understanding the population, and we did see that that 75 milligram dose group had a higher rate of a clinical finding that we think predisposed them to rapid disease progression. And when we included that variable in our analysis, the efficacy signal strengthened. So that's why we think that even though the 75 milligram dose is somewhat less than 50, we think they're both effective. Now, then the question is, how do we know that 50 is right or how comfortable are we? And I am I am very comfortable with that dose. And what we've done is, as part of the plan analysis plan of the phase two results, we have collected sparse PK samples, which allows us to calculate pharmacokinetic parameters for each individual subject. And then what we've done across the board is looked at multiple efficacy parameters and plotted the efficacy, say, on the y-axis versus the concentration on the x-axis to see, is there any evidence of increasing efficacy as we go up with exposure? And really what we saw was a pretty flat dose response, meaning that the exposure that we see at 50 milligrams, we really do see a saturation of that effect, and we don't see any benefit from going higher at the 75 milligram dose level. So that is part of the reason that we feel quite confident in conjunction with the robust efficacy that we saw at 50 kilograms. The other thing I would add is that when we look at how we selected our doses and the animal studies, the exposure that we achieved at the 50 milligram dose level was the maximally effective dose in one of the key animal models. So, you know, we didn't want to risk dosing below that level in phase two, but I think based on the aggregate data, we feel that everything is pointing to the 50 milligrams as an effective and a robust dose. Got it. And then I guess on framing up what a pivotal phase three success requires. So with the 11 item, I'm sorry, as the pivotal primary endpoint here, what magnitude of benefit would be meaningful to patients? And do you think that is in line with what investors are kind of looking for? Or, you know, is that, you know, there's a difference there? Yeah. So I think a treatment effect of anywhere from, you know, one and a half to two points is the minimum that we would target. And it's not how we've powered the study because we saw a much larger treatment effect than that. But I think a treatment difference of one and a half to two points, if you call it one point in one person and two points in another, on this scale is meaningful. And the reason is that if you look at the individual items of the MSARs, they're rated on a zero to four point scale. And a one-point improvement on that scale can have a meaningful difference. If you take, say, a patient that has slow movements associated with either cutting their food or dressing themselves, a one point difference can mean a difference between somewhat slowed movement and no impairment. Or a one-point difference could mean a difference of occasional choking versus no choking. Or similarly, having unintelligible speech where people have to repeat themselves more than half the time versus understandable speech. So we think these small differences can have a big impact. And then if you think about that, if you see improvement or stabilization compared to placebo in one or more domains, that's the treatment effect that we're really targeting. So, you know, we've, I think we've designed our study to see, to power it for closer to a two to two and a half treatment, two to a half point treatment effect, which we feel very comfortable that we can achieve with a study design that we have planned. Great. And I guess kind of like one of the driving factors there too then would be what you were alluding to earlier, patient selection and trial quality. Could you maybe elaborate there on the challenges that these sites have in identifying and distinguishing MSA patients from other conditions like Parkinson's and what you've been able to learn from your natural history study that helps out there? Sure. Yeah, I think you've really hit on something that's critical for trial success in MSA, because as people probably know that MSA is referred to as a Parkinsonian disorder, which means early on it can look like Parkinson's. So you want to get early patients, but you don't want to include Parkinson's patients in your population, which could obscure a meaningful drug effect. So the natural history study that you referred to, the Biomuse study, which looked at 21 patients who met clinical criteria, really helped us identify MRI signatures that are very characteristic of MSA that really help us identify an MSA patient with confidence. And that's either elevated brain iron to identify MSA patients or brain atrophy in certain regions. And we showed those, you know, we applied those tools in phase two and we feel very confident that the patients that we selected in phase two had MSA. And we're taking our learnings from that phase two study and kind of building on what we did in the natural history study where we had focused solely on using iron, but now we're pivoting to using brain volume, which is equally useful in identifying the patients, but just operationally easier to implement. So that was one aspect. And the other one is using a plasma biomarker of neuronal damage called NFL. And we use that in phase two in our planning and using that again in phase three to select patients. It's elevated in MSA and not in Parkinson's disease. Great. And then just kind of on that operational side, how are you balancing then like the diagnostic certainty and disease stage and enrichment against like recruitment speed? Yeah, well, that's a good question. I think we're using sites, we're identifying sites that should be able to identify these patients clinically. Um, and it's true that the biomarkers may exclude, uh, patients that would otherwise qualify just based on clinical criteria. But, um, but I have to say, you know, that, that rapid recruitment in this disease makes me nervous. I've seen it before, uh. With other large development programs, uh that enrolled quickly. And I, I just think that these are not easy patients for sites to find. So while it maybe creates uncertainty and may slow down recruitment, I think that a fast recruitment speed that doesn't use these biomarkers really is not a desirable strategy because I think it's going to maybe accelerate the timeline to get to a negative trial. I feel firmly that using a very careful approach towards patient selection that really assures that we can find a patient that we're confident has MSA is ultimately going to be the recipe for success. But it's a kind of time-honored problem or challenge that you have in development is how do you make sure you get the right patients without making the trial too difficult to enroll? Yeah, makes sense. higher quality, cleaner signal. So I guess moving from FDA alignment to first patient dose, could you walk us through what elements the FDA has aligned with on 434's pivotal program and what remains to be aligned before the first patient is dosed? Yeah, I'd say we have reached alignment with the FDA on the critical aspects of the Phase 3 program. So that means the selection and the scoring of the primary endpoint, which is the MSA rating scale that we've discussed, the 11-item rating scale. We have made specific proposals at the end of Phase 2 meeting on what that phase, or sorry, how we're selecting that patient population using some of those biomarkers as well as established clinical criteria. But they've also agreed importantly on the secondary endpoints, some of which we've talked about that I think are going to be quite important to give us a nice label. They've agreed on how we are going analyze the data, notably the selection of covariates. And we haven't, we've talked a little bit about NFL and plasma, and plasma NFL is good, but we're also going to use NFL in spinal fluid, which is an important predictor of a disease prognosis and disease, speed of disease progression. So we're going to used that as well as that blood pressure change that we saw confounded our phase two results. So the FDA has agreed that we can use both of those in the analysis of the key phase three endpoint. And then finally, they've agreed to our projected size of the overall safety database. So I don't think there's too much uncertainty left with what we have to do. Obviously, we propose detailed safety monitoring, which is critical. The FDA is always going to reserve judgment until they see a final protocol. But we're going to do, you know, the trial conduct is going to be very similar to phase two. So we don't anticipate any challenges there. Got it. And then maybe quickly on just funding for the program, what can the current balance sheet fund and how are you weighing financing versus a partnership to deliver the entire Fibro program here? Yeah. So the current cash balance that we've last disclosed, which is somewhere between 25 and 30 million US, is going to comfortably get us to the beginning of the phase three trial, to do everything we need to do from a regulatory standpoint and a trial setup standpoint. And we continue to look at active partnerships. We've had several discussions. Those discussions are ongoing. We have new prospective partners coming to the table on a regular basis. And we're always weighing what that partnership opportunity looks like versus a capital raise. And, you know, I know this is for existing shareholders always creates some angst because the notion of dilution is a challenge. On the other hand, we want to make sure that we, from a partnership standpoint, that we select a partner that is really a thoughtful development partner, as well as a source of financing, because we don't want to take just any partnership that will minimize dilution for an existing shareholder, but ultimately not deliver a positive result. because that in the end is not going to really provide much satisfaction from a long-term investment standpoint. Also, it's not going do much for the patient population, which is in desperate need. We're always trying to balance and do what is best for shareholders and do what's best for the asset. We are firmly committed to doing that. Got it. Then over the next six to 12 months, which two or three milestones would you think demonstrates that Alterity is moving from a promising phase two asset to a well-executed pivotal program? Well, for starters, we want to publish the phase two results. We've been actively working on that. Our team is rather small, so it's taken us a bit longer than desirable, but that's something that's in process and we hope to make some progress on in the near term. obviously commencing the phase three trial is going to be a very important, you know, very important milestone. So we are making significant progress towards getting to that milestone. And we expect that we'll be enrolling the first patient in the trial in the first quarter of next year. And then I think having countries come on board, you You know, we are planning a multinational trial in the U.S., several European countries, as well as Australia. Having those countries come on board with regulatory approval really sets the stage for bringing and activating those sites and getting the momentum. So those are, I think, are the key things that will really message that we are on our way towards delivering this phase three trial. all right i think with that uh it's a good place to leave it because unfortunately we are out of time which always just goes too quickly um david always a pleasure speaking with you uh thank you for taking the time and we're looking forward to the updates great always always a treasure adam take care