STIFEL 2026 HEALTHCARE CONFERENCE - ALAUNOS THERAPEUTICS INC

Good to be here. Appreciate everyone, especially the early morning slot. They're real go-getters. So excited to tell you about Valeris today. There we go. I will be making forward-looking statements. So Valerius was set up out of Paragon to develop a pipeline of drugs going after pulmonary hypertension and related cardiopulmonary diseases. When you look at kind of PAH or pulmonary arterial hypertension, significant unmet need, mortality, like survival curves, and one mechanism really has risen to the top, and that is actamin signaling. One drug, Cetatercept, or now Winrever, has launched very well over the past few years. This was Acceleron acquired by Merck, and it has launched incredibly well, which we'll get into in a moment. And nothing else has really come behind this. It's a second-in-class mechanism. What we're doing is we are advancing quickly, something that Pharmaco copies, Cetatercept, to go quickly into PAH. We'll be in the clinic next year with phase 1B proof of concept data, which is very nice and dose dependent. It should be quite reifying. And then we're bringing a number of next-gen approaches as well, 247 and 258, which spare BMP910, and we'll get into the biology of that in a bit. And we're the first company to also be bringing combinations to this space. So PDGFB, we're advancing in the clinic next year. We'll look to this as a potentially best-in-class model and also the first-in class combination approach in PAH. Outside of PAH, I think, is where the story gets quite interesting as well. We'll be looking at heart failure, so specifically HEF-PEF, where cytators have just put up very strong hazard ratio of less than 0.2 data in Phase 2, and they're now moving to Phase 3. And then we look to be first in class across five or so different pulmonary indications, all of which have blockbuster potential. And we will have first-broker advantage there. This is data which I think many people might have actually missed, which is within Merck, Sertanercept is off to a very strong launch. So $2 billion two years in. I think this is one of the more under-the-radar launches out there. And it is looking to do $8 to $10 billion in pH alone. When we compare PAH on the left to the other indications where cetatricept and active insignaline could be employed, I think this tells a story of how this could be one of the larger classes out there, again, under the radar. PAH, 30,000 to 50,000 patients, 8 billion peak. The cardiac indication, pulmonary hypertension of heart failure with preserved ejection fraction, what is called HEPF for short, about 10 times as many potential patients in that indication. Merck just put out Phase 2 proof-of-concept data showing a hazard ratio of 0.18, which is kind of unheard of these days in any heart failure study. So they're now moving that into Phase 3, just the lower dose. We think there's room to improve on the dose there. And then in respiratory indications, there's been a number of different PAH drugs with less efficacy that have transitioned from PAH into interstitial lung disease, PHCOPD, IPF, PPF. Nobody has tried formally to take an active drug into those indications. We look to be the first movers. We'll get into some of the anecdotal and clinical evidence out there from doctors that are doing this already, putting out quite compelling data. This just shows the lung and the heart are connected. but pulmonary vascular remodeling does happen due to imbalanced growth signaling and this is why outside of just group 1 which is pulmonary arterial hypertension this mechanism also works in group 2 and group 3 diseases. Group 2 being left sided heart failure, that HEPF we talked about and group 2 being interstitial lung diseases, IOD, IPF COPD, etc. Active end signaling just rebalances the growth so you make the vessel much more patent and able to deliver blood and therefore transport oxygen. Our lead program, 199, as you can see on the left, it rebalances the pro-proliferative and anti-pro-liferitive mechanisms to reopen that blood vessel and allow for oxygen to be carried more effectively. On the right you can how we compare to Winrevere or Sertatracept in our pre-clinical studies. You can see that we, you know, very closely pharmacomimetic winter ears mechanism of action, giving us confidence to take this drug aggressively forward. Outside of PAH, where we will look to, right, improve upon what Sotetracept does in terms of dosing, delivery, and a number of other factors with our clinical strategy in PAH. We are going to move aggressively into HEPPF, where we can be a fast follower. Again, Merck, they relied on their PAH dosing, and we think that there's room to improve as their top dose did not deliver, and only the lower dose is currently being taken forward. It is in phase three, though, very, very impressive results, but we'll look to see if we can optimize dosing further, and then be first in class in PHILD and additional opportunities like COPD, IPF, PPF. And these are the sorts of indications, right, where $20, $30 billion biotechs have recently launched drugs. And we think the efficacy could be quite profound. What's really nice about PAH is that you can move quite rapidly, and there's precedent data that we can rely on to get very quick proof of concept. You can see here we're going from left to right, phase one, two, and three. The phase one we will run a SAT, and we'll look for a dose-dependent biomarker where we will look to replicate what Sotirisept has done. We'll then do Phase IIs and PAH, HFPEF, and the lung diseases, which can then quickly go to registrational studies. Very nice regulatory precedent here, and the unmet need is still incredibly high in these patients. So, you know, plenty of appetite out there globally for these indications and to get these trials enrolling. This is just that Phase I data, which will be really the first data that we put on the board after we get in the clinic next year. You know, some phase 1s, you look to prove that it's safe, and then you move forward into phase 2. I think here there is a very clear dose-dependent biomarker, serum FSH, and we're showing sort of Hatercept's data or Winrevere on the left. We'll look to replicate this with our phase 1 data, giving us confidence, and informing the doses that we then take into a phase 2, We'll also look for hemoglobin changes and other biomarker changes closely linked with actin signaling. Following the phase 1, our phase 2, we'll look to optimize the dose. These can be pretty tight studies, right, talking 100 to 150 patients, so pretty seamless. And then we'll go into a phase 3 design where, again, regulatory pathways are quite clear, propopressinone and 6-minute walk duration. beyond PAH I think is where you know there there's significant upside and where OC is focused a lot of our story because again heart failure roughly 10 times the number of patients the Merck data was quite impressive and I think a lot of room to improve for options for patients in this space then across lung disease right interstitial lung COPD IPF PPF these are all you know IOD is the closest in terms of, you know, pH is 50,000 patients, IOD is 60 to 70,000. The others are obviously much larger. So each a potential blockbuster indication where docs are already using this, and we'll get into that data shortly. This is the heart failure data that I've mentioned. You can see the PAH data for cetatricept on the left, where it has a ratio of 0.16. Again, right, these are trials that end up getting paused earlier because equipoise demands that the drug be approved faster. And on the right, you can see the heart failure data of 0.18 that Winrevere delivered just earlier this year. Again, at that lower 0.3 mg per gig dose, the 0.7 actually looked worse. So we think room to potentially improve there. And they are advancing into phase three and will look to be a fast follower. A number of PAH drugs have gone from PAH into ILD and pulmonary fibrosis with remarkable success. despite having more limited PAH data. So we're excited to take the most active PAH drug into these diseases and see what we can do. Two examples that I think will just be familiar for investors, United, of course, with Tavaso, prostacyclin. You know, it does achieve stat-sig and PAH, but is nowhere near as effective as cetatercept. You know two positive IPF phase 3s just read out following an ILD. Phase III, they're doing a few billion in these indications. And Roivant, of course, took a drug that had been shelved for PAH and reported a few months ago positive Phase II data leading to, right, a pretty nice market reaction, and then moving quickly into Phase III we would expect to do something similar. A bit more around kind of the signal that has been seen in these lung diseases, a bit of a complicated slide, but in gray is sotitercept PAH data. You can contrast that with the standard of care troponostil in orange, and you can see that on six-minute walk and BNP, you see a very nice improvement for sotitracept versus inhaled prostacyclines. And then you can see that docs have of course been have noticed this and they have tried this in their patients and a number of different case reports in group three lung diseases the first kind of lime green from Patel and the darker green from dogger and you can see you know heretofore unseen changes in six minute walk duration and group three patients you know really nice improvements in PBR which would be expected given the mechanism of Cetanercept and very nice changes in B and P as well. So this isn't just a hypothesis but docs are actually doing this given that they have used these patients before, used different pH drugs and IOD and seen really nice results. Beyond kind of our lead program and moving aggressively into the group 1, 2 and 3 diseases, we are trying a few next-generation approaches as well, we structure this company so that whatever mechanism that anybody is trying in PAH, we want to be the winner. So we've built in a number of different call options into the company because if this architecture can be improved upon, we want To be the ones to do it. Two distinct approaches that we're taking beyond our lead 1099 are layers 247 and 258. Here we've dialed out BMP 9 and 10 signaling. It gets a bit complicated, it, but BMP9 and 10 lead to hemoglobin increases, and they limit the amount of efficacy that can be achieved with sirtatracept because they limit the dose. You really want to hit active in A, B, A and B hard, but you can only do so much without changing too much hemoglobulin in BMP 9 and 10. People have tried to go after this and do it. GSK acquired a company earlier this year, 35 Pharma, that is currently in phase two in both PAH and HEPP, that heart failure indication. That date is coming next year. If that date is positive, then we will be positioned quite well to move forward our Valerius 258 and 247 into the same indications where GSK is playing, potentially able to push the dose without worrying about those side effects. And if that does not read out positively, then we'll continue forward with 1.99 as planned. Additionally, there is emerging work on PDGFB. This stems from a really impressive dataset, the imatinib, which is, of course, Gleevec, a cancer drug produced in PAH, where it showed similar efficacy data, almost as profound as cetatercept, with an orthogonal mechanism. Of course, imatinab does carry tox, so close to 30 percent dropout rate. that really nice efficacy benefit, so it was not carried forward given the efficacy safety equipoise was not there. However, it's thought to be that PDGFB was the primary driver of that efficacy. So Regeneron is currently in phase two with a PDGFP-selective antibody. We are coming into the clinic next year with a half-life extended antibody against PDGFT, so we can improve upon their dosing and look to develop this not only as a monotherapy on their hills but we would be uniquely positioned to combine this with our lead and we have engineered these to be co-formulatable so quite excited to to see that readout and you know if there is safety that does not overlap with soda as well as you know a modicum of efficacy even anything incremental We would look to be first-in-class combining it in pH and also consider additional indications This just shows the mechanism is a bit more active in signalings on the left, you know, it really is a pro proliferative Mechanism so decreasing that With an active in inhibitor leads to just less proliferation and kind of opening up those blood vessels PDGF be signaling You know, he hits a number of things really sell growth survival and remodeling. So a really nice with all kind of mechanism to try out And as mentioned, we have designed this with a combination of mine so that we can co-formulate these and look at these quickly in a phase two proof of principle. Next year is going to be a very exciting year for us as we enter the clinic with our lead program, 199 and also 360, that's the anti-PDGF-B antibody. We'll be getting our proof of concept data for both of those then in the 2028 timeframe. I think along the way, what's going to be exciting as well is there's going to be external data from first-generation molecules. Obviously, Merck's Wind River will continue to produce data. DOCS will continue use it, I'm sure, and publish case studies across Group 3 diseases, which we'll be closely watching to inform our own studies. GSK is advancing, again, their BMP-910 sparing drug with data coming in PAH next year, and then HEPF in 2028, which we'll be keenly watching, and then Regeneron with their Phase II data in 2029 in PAH. And lastly, the team, you can see us here. So we, most of us recently came over from Apogee Therapeutics, heard this opportunity, and I got quite excited. Thank you. I think maybe the first question I wanted to ask that I feel like is a line of questioning you've been used to in the past is sort of, you know, why can't Merck look at your plan here for 199 and sort of just do the same thing with cetatercepts? Like, what's been the inertia there to prevent them from going back and sort of fixing some of the historical issues and maybe thinking about lung disease, too? Yeah. You know, I think that a pharma or a rational biotech wouldn't exist. Yeah. And not the first time I kind of encountered that situation. You know. If you look at the history of cetaricept, right, it had a long clinical development history. It eventually proved itself incredibly effective in PAH. If you Look back at kind of how they landed on their dosing, right? And I think if you talk to people that were involved in that, it was not fully optimized, right? It's the only Q3-week drug, bioinsurge, that I'm aware of that's approved. Yeah. And I think that they landed on that, you know, kind of after a number of indication pivots, eventually landed on PAH. I think Merck, when they acquired Acceleron, right, they looked to get that drug approved as quickly as they could, and it was already in flight with that dosing. So to change it would have been, you Know, a step back, and steps back costs time and money. So they took it forward aggressively, and then I think the heart failure data really shows that even if, within PAH, they have an interesting dose within heart failure, they only take the low one forward, and now as they think about other pressures like IRA, it's kind of just too late for them to go into group three diseases. They have to do a phase two, and they have to phase threes, and you're talking IRA about nine years from now for them which is right a soda problem not an us problem yeah so being first in class in these lung diseases in particular i think it's just a it's a moment in time yep yeah maybe can you unpack a little bit more around the specific dose ranging data or that sort of process that was done and sort of where you see you know the potential for gaps that you can optimize around beyond just q3 weak dosing yeah so the the 0.3 so so does a 0.30.7 mc per kg uh titration um and that came out of a phase 1b in post-menopausal women when satiricept which is an anabolic mechanism was being studied for osteoporosis and it was there were hemoglobin changes above that, but it was never then kind of, you know, they said that they did modeling, et cetera. It then kindof just fell back into let's go with the 0.3 and the 07 because above that at different dosing frequencies, you now, 100 days past the last dose, there was a heme change. Yeah. So, they settled on it. Obviously, it worked quite well in PAH. If you look at the phase two data in pH, I think PBR, which is pulmonary vascular resistance, did show a nice dose-dependent change. None of the other endpoints really did. They actually looked pretty flat. But you do see more AEs at the 0.7 mcg per kick dose. So I think it's obviously an incredible drug. Docs love it. But if you asked docs, do you think that the dosing is nailed and that patients love an every three-week schedule, or do you love an every three week schedule? That's bio syringe that requires math to figure out what to give each patient. They recognize that a class of this size with this much market potential, improvements could be made. So is ultimately the goal to get to maybe some sort of flat dosing with a sub-Q auto-injector first Q4 weekly profile? Is that kind of broad strokes what you're looking for? Yeah, I think that could be a likely outcome. I don't know, it would probably be more weight bands. Okay. but try to make it easy for everyone. Yep, yep, yep. And then maybe, I think the other question here too is sort of like, when you're thinking about 910 sparing in particular with the second gen asset, we talked about what happened, the progression of the GSK now, the now GSK asset, but I think Kuros is the other story that people might see and sort of get worried about the ability to achieve that level of selectivity. So can you walk through maybe what the learnings were from Kiros and how you're approaching this question? Yeah, we are fortunate in that there's been a number of successes and failures that we are able to learn from in this space. Yeah, I think Kiros, and even 35Harma's lead drug, both kind of experienced setbacks in the clinic that were surprising to folks. I think hindsight's 20-20, of course, so it's super easy to sit here now and sound smart about it. But if you look at the Kuros drug, they did spare BMP9, but they actually, they spared everything, right? So they also spared activant signaling. So to get to the same activant inhibition that is achieved with cetatercept, they actually ended up, you have to dose to a level that you hit BMP 9 and 10 both harder than cetatercep does. And you can see that kind of in their past dose, and it's also evident just in their phase two data. Not only was safety not favorable, but efficacy wasn't favorable either. So I think that it was an interesting hypothesis with a flawed molecule. I think with GSK's drug, it does spare BMP910 a bit. We'll see what that delivers. I think the reason why we are a bit reserved on making predictions is improving your hemoglobin, Increasing it, which is on target for Cetidracept, it's not the worst thing. Cetiricept, it's on anti-doping for bikers. I'm sure you're on it, Alex. But it's like taking EPO. So it does improve your six-minute walk duration, potentially. And you can get very smart scientists who will have a knife fight about whether or not you want to spare BMP910. Our view is we're going to have both. So if it does work, and you can spare it and push efficacy, great. we'll be ready to kind of quickly go into it. If no, it looks like that's actually a feature, not a bug, then, you know, full steam ahead with our lead. And then maybe I want to talk a little bit more about thoughts around commercial dynamics, particularly with HFPEF versus pH in the smaller specialty markets. Is your expectation that, you Know, with the lower dosing, the price there will be a significant price differential between HFPAF and PAH? Is that the way that this probably shakes out or no? Not based off of what Merck's saying. I think that Merck is, they're very focused, which makes sense, on retaining kind of orphan status. So I think they're going to tailor kind of, you know, make the argument that their label and their inclusion, exclusion criteria for their ongoing FF study, you know, matches kind of Orphan. And there is flat pricing between the 0.3 and 0.7. So they're gonna, I think, maintain that high price. And given, you know, a hazard ratio of 0.18, when we're seeing myriad heart failure drugs just, you know, be unsuccessful with hazard ratios of 0,99, they're going to have a pretty strong argument to be able to push that. I think the other interesting question in this space is obviously morbidity and mortality is quite high. You know, if 1,99 is out in the market, you're you're improving tolerability dosing convenience is is this a switch market or is this more of an incident market dynamic for you over time yeah um you know i think it could be both um you know fortunately mortality curves are improving on cetatercept uh and right i think that when you start to see patients just get better controlled um and then be on a drug for quite some time, sometimes they will be unwilling to switch because why rock a boat if it's working? I think a lot of them too, especially if it is the same mechanism, they can get comfort with that. Then as we think about combinations and pushing that even further, layering on another mechanism when they are already achieving benefit from something I think would be a proper just a pretty normal path. This is already very much a polypharmacy indication, right? Yeah, these docs, I mean, they layer on mechanisms, right? Like you're on a vasodilator compressor, like you end up on ACEs, ARBs, everything, because they historically have kind of thrown the kitchen sink at these very sick patients to try to control their hemodynamics. And then you mentioned this a little bit, you know, as a biotech versus Merck. Can you talk a little about, you Know, this being a Medicare population and, you Now, the sort of pros and cons versus being a biotape versus a large pharma there? Yeah, I mean, right, these are the sorts of indications that I'm at needs where you can rapidly get access. It's a very concentrated prescriber base, so you can, you know, I think launch quite well without, you Know, this isn't a primary care space. You have specialists that really treat these that follow the literature and are looking right now for the best commercialists but just the best data. And I think that we will be able to, right? If we produce data that is compelling, rapidly gain share. Yep. And then maybe, can you walk through what's sort of left from an IND-enabling perspective to get into the clinic across 199 and 360 at this point? Just all the operations, you know, all the boring stuff. So, right, we know what to expect with tox. We're just running our tox studies. And then we'll advance into the Clinic. We know what you expect from soda, right? There is toxine, so it's more about just establishing what entry dose you get into The Clinic with and then setting it up for success with that dose-dependent FSA exchange. Yeah, and then maybe the other thing to cover here is just sort of your position as the president here and your position at Paragon and sort of your expectations around, you know, running Valeris over time. Like, how are you framing that? Yeah, you Know, we've been very clear with investors on this. So also CEO of Paragon as part of that, right? Paragon creates companies like Valerius. You'll see other companies come out of Paragan over the next, you know, year. you know coming out of this what we had done in Apogee where I was before is we had kind of you know understood what capabilities Paragon was great at and then kind of built a team to then translate those rapidly into the clinic and achieve POC so a good portion of that team is now ported over we the executive team which we announced about a month ago alongside kind of the Valeris financing so we'll be setting it up for success with that team and then within the first year, we'll look to find a permanent CEO that will come in, and then it'll all be on the board, a very annoying board member, I'm sure, and we'll continue to support it via Paragon, but install a more permanent management team. And then maybe finally, with the financing, what does your runway look like? Yeah, into 2029. So we set out to raise $200 million. We ended up upsizing that due to demand to $350 million. That gives us the ability to kind of achieve all the data that you saw on that slide with Runaway into 2029, which is a great position to be in in these fund markets. Great. Any further? Any final thoughts? Thank you for the opportunity to be here. Thanks, Michael. Appreciate it. Thanks.