STIFEL 2026 HEALTHCARE CONFERENCE - ALAUNOS THERAPEUTICS INC

Financial Performance:

• Valerius recently upsized its financing from an initial target of $200 million to $350 million due to investor demand.
• The raised capital provides a runway extending into 2029 to fund operations through key proof-of-concept (POC) milestones.
• The company is in a pre-revenue stage; it is a clinical-stage biotech focused on drug development rather than commercial sales.

Guidance and Future Outlook:

• 2025 (Next Year): Entry into clinical trials for lead asset 199 (Cetaceptimab copy) and asset 360 (anti-PDGFB antibody).
• 2028: Expected data readouts for Phase 1b/2 POC data for both 199 and 360, covering PAH, HFpEF, and lung indications.
• Long-term Strategy: Aim to be first-in-class in multiple pulmonary indications (ILD, IPF, COPD, PPF) and a fast follower in Heart Failure with Preserved Ejection Fraction (HFpEF).
• Pipeline Options: Plans to advance assets 247 and 258 (BMP9/10 sparing) contingent on competitive data from GSK's similar asset in PAH/HFpEF.

Business Segments and Product Lines:

• Lead Asset (199): A pharmacomimetic antibody targeting Actin signaling, designed to replicate the mechanism of Merck's approved drug (Winrevair/Sotatercept) but with optimized dosing (potentially flat dosing/auto-injector).
• Next-Gen Assets (247, 258): Engineered to spare BMP9/10 signaling to potentially allow higher dosing without hemoglobin-related side effects; positioned as potential best-in-class if GSK's data supports this approach.
• Combination Therapy (Asset 360): A half-life extended anti-PDGFB antibody; the company aims to combine this with 199, as they are engineered to be co-formulatable.
• Indication Expansion: Targeting Group 1 (PAH), Group 2 (Heart Failure/HFpEF), and Group 3 (Lung diseases: ILD, IPF, COPD, PPF), leveraging existing clinical data showing efficacy across these groups.

Market and Competitive Landscape:

• Competitor (Merck/Winrevair): The standard of care has a $2–$10 billion peak sales potential. Valerius argues Merck is locked into a Q3-week subcutaneous dosing regimen and has not optimized for heart failure dosing (favoring the lower 0.3 mg dose).
• Competitor (GSK): Holding a phase 2 asset for BMP9/10 sparing; Valerius will pivot its strategy based on GSK's 2025/2028 data results.
• Competitor (Regeneron): Developing a PDGFB-selective antibody in Phase 2; Valerius aims to offer a half-life extended version and first-in-class combination therapy.
• Market Dynamics: The target populations (HFpEF, IPF) are significantly larger (10x) than PAH, offering blockbuster potential ($20–$30 billion) similar to recent launches by companies like United Therapeutics and Roivant.
• Commercial Access: Focuses on a concentrated prescriber base (specialists) rather than primary care, facilitating rapid market entry and share capture with compelling data.

Risks and Challenges:

• Dosing Optimization Risk: Merck's high-dose data in HFpEF showed worse outcomes; Valerius faces the risk that their own dosing strategy may not outperform existing therapies.
• Competitive Timing: If GSK's BMP9/10 sparing data is negative, Valerius may have to rely solely on its lead asset 199, missing the potential "best-in-class" improvement in that specific mechanism.
• Safety Profile: Risk of hemoglobin increases (a known side effect of Actin inhibition) and potential safety overlaps if combination therapies are used.
• Execution Risk: Transitioning from a biotech startup to a commercial entity requires successful Phase 2 trials in diverse indications (PAH, HFpEF, ILD).

Management Commentary and Tone:

• Confidence: Management expresses high confidence in the "unmet need" and the biological plausibility of Actin signaling in Group 2 and 3 diseases, citing real-world anecdotal data from physicians.
• Strategic Focus: Emphasizes speed ("aggressively forward") and the "first-mover advantage" in expanding beyond PAH into larger markets where competitors are still in early development phases.
• Leadership Structure: Current leadership includes the CEO from Paragon; a permanent CEO is planned to be hired within the first year, with the current executive team continuing to support the board.

Analyst Questions and Answers:

• Inertia at Merck: Management explained that Merck could not easily change their approved dosing (Q3-week) or pivot to lung diseases without delaying approval by years due to regulatory requirements for new Phase 2/3 trials.
• Dosing Strategy: Discussed potential for flat dosing or weight-band dosing with auto-injectors to improve upon the complex titration required by Winrevair.
• BMP9/10 Selectivity: Addressed previous failures (e.g., Kuros) where sparing BMP9 led to ineffective dosing; Valerius plans to hold both approaches (with and without BMP9 sparing) to remain agile.
• Pricing Dynamics: Expectation that Merck will maintain high orphan pricing for HFpEF; Valerius anticipates switching market dynamics but acknowledges patient inertia if current therapies are working.
• IND Readiness: Confirmed that toxicology studies are on track, with a focus on establishing the entry dose to achieve dose-dependent biomarker changes (Serum FSH).

Other Key Points:

• Team Background: The executive team largely transferred from Apogee Therapeutics, bringing experience in rapid clinical translation.
• Regulatory Pathway: Leverages clear regulatory precedents set by Actin inhibitors for accelerated approval in PAH, with a "seamless" transition to Phase 2 and 3.
• Biological Mechanism: Actin signaling rebalances pro- and anti-proliferative signals to reopen remodeled blood vessels, improving oxygen transport in both heart and lung diseases.