Acumen Pharmaceuticals, Inc. Q3 FY2022 Earnings Call

Good day. Thank you for standing by. Welcome to the Acumen Pharmaceuticals, Q3 2022 Conference Call and Webcast. At this time, all participants are in a listen-only mode. After the speakers' presentation, there'll be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Alex Braun, Head of Investor Relations. Please go ahead.

Thank you, Latonya. Good afternoon and welcome to the Acumen conference call to discuss our business update and financial results for the quarter ended September 30th, 2022. With me today are Dan O'Connell, our Chief Executive Officer; Dr. Eric Siemers, our Chief Medical Officer; and Matt Zuga, our Chief Financial Officer and Chief Business Officer. Before we begin, we encourage listeners to go to the Investors section of the Acumen website to find our press release issued this afternoon and the related slide presentation that we'll discuss today. Please note that during today's conference call, we may make forward-looking statements within the meaning of the Federal Securities laws, including statements concerning our financial outlook and expected business plans. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Please see slide two of the accompanying presentation, our press release issued this afternoon, and our most recent annual and quarterly reports filed with the SEC for important risk factors that could cause our actual results to differ materially from those expressed or implied in the forward-looking statements. We undertake no obligation to update or revise the information provided on this call or in the accompanying presentation as a result of new information or future results or developments. After our prepared remarks, we'll open the call for questions. Now, I'll turn the call over to Dan.

Thank you, Alex. Good afternoon and thank you for joining our call today. The third quarter was characterized by increased momentum on several fronts for Acumen. The highlights include improved enrollment in the ongoing INTERCEPT-AD trial, Fast-Track designation for ACU193 from the FDA, and publication of our INTERCEPT-AD trial design and anticipated critical development plans for ACU193. I'd also like to note that our progress comes amid renewed optimism in the Alzheimer's field due to lecanemab's recent positive clinical trial results, which reinforce the role that soluble Aβ species may play in the disease. I'll start today by discussing our business and operational highlights, and Dr. Siemers will then provide some comments and context on the recent developments for both ACU193 and the Alzheimer's field as a whole. Turning to updates from our Phase 1 INTERCEPT-AD clinical trial of ACU193, the first monoclonal antibody discovered and developed to selectively target soluble Aβ oligomer to enter the clinic. Enrollment is now ongoing at 17 active sites in the US. As previously noted during the initial stages of the trial last year in early 2022, we experienced slightly slower patient enrollment than originally projected. However, in the last four months, patient recruitment and enrollment have accelerated considerably. We are working closely with our partner CRO and clinical sites to ensure timely scheduling of the various visits per the study protocol, which also includes imaging conducted at third-party sites. We are pleased that enrollment momentum is accelerating ahead of the holiday season. I should also note, we are very encouraged with the safety profile observed to date in the trial, which aligns with our expectations for ACU193. Based on the trial's current status, we are targeting enrollment completion in the first quarter of 2023 and reporting topline results in the second half of the year. In anticipation of moving quickly to a subsequent clinical trial, I want to provide an update on some of the pertinent Phase 2/3 activities that have been completed or are underway. On the toxicology front, the in-life phase of the chronic GLP toxicity study has been successfully completed and the final study report is expected in the first quarter of 2023. Our chemistry manufacturing and controls team led by Leanne Shank, who joined as Head of CMC this June, is working diligently to ensure clinical drug readiness in support of the planned Phase 2/3 study for ACU193. We have completed development of our new drug substance production process and produced our first Phase 2/3 drug substance manufacturing lot. We have also completed development of the lyophilized formulation of our drug product. Based on this progress, we are well-positioned to scale manufacturing and have sufficient drug supply to meet the requirements of our current development plan. As part of the CMC efforts and our application for the non-proprietary name for ACU193, we have confirmed ACU193 as a consensus IgG2 subclass antibody, which is consistent with our hypothesis that the reduced effect of the function of this subclass should favorably influence safety outcomes for ACU193. We continue to pay close attention to the development of subcutaneous formulations of other antibody products in the Alzheimer's field. Dependent on observed patient dosing information generated in our Phase 1 study, we will assess options for the potential development of a subcutaneous formulation as part of our ACU193 product development plans. Though we are acutely focused on advancing INTERCEPT-AD and readying for the next phase of our development plan for the product, we do continuously evaluate the landscape for opportunities that fit with our capabilities and expertise. We are committed to being highly selective in the deployment of capital and evaluating such opportunities, but also appreciate that pipeline expansion could be a path to greater value creation in the future. On a final note, during the third quarter, we continued to expand our senior leadership team, adding Derek Meisner as Chief Legal Officer. Derek's legal career has spanned more than two decades at both biotechnology companies and investment firms, and he is a valuable addition to the company and our senior leadership team. With that, I'll hand the call over to Dr. Eric Siemers.

Thanks Dan, and good afternoon everyone. We are delighted that the FDA recently granted Fast-Track designation to ACU193 for the treatment of early Alzheimer's disease. This underscores the potential clinical utility of ACU193 in this patient population with such a high unmet need for additional disease-modifying therapies. To this end, we are committed to designing an efficient and innovative clinical development plan for ACU193. We recently published an article in the Journal for Prevention of Alzheimer's Disease that outlines the design of our ongoing Phase 1 INTERCEPT-AD trial for ACU193, and the planned criteria for advancing to a Phase 2/3 clinical trial based on recent advancements in clinical research methods in Alzheimer's disease. As we detail in the article, the criteria for advancing from a Phase 1 to a Phase 2/3 trial will be based on safety and tolerability, pharmacokinetic parameters, and target engagement at doses that have acceptable safety and tolerability. While we have not finalized the design for the Phase 2/3 trial, we do anticipate it would begin with a patient sample size typical of the Phase 2 trial, and an interim analysis would then determine whether to increase the sample size to meet the statistical power of a typical Phase 3 trial. This interim analysis may be based on several cognitive measures and various biomarkers, for example, correlated in the blood and cerebrospinal fluid. Pending discussions with regulators, if the interim analysis is positive and the trial has expanded, the Phase 2/3 trial could potentially serve as a registration trial. Considering the design of the Phase 1 INTERCEPT-AD study in patients with early Alzheimer's disease and the adaptive design of the planned Phase 2/3 study, this innovative clinical development plan could allow us to evaluate oligomers more rapidly as a promising therapeutic target for Alzheimer's disease patients. Looking at the field more broadly, the recent positive Phase 3 CLARITY-AD trial results for lecanemab underscore the progress the field is making in the fight against Alzheimer's disease. It has also driven a renewed look at the role that soluble Aβ species, rather than deposited amyloid plaques, may play a major role in the pathology of Alzheimer's disease. The gantenerumab GRADUATE study results announced today describing a negative readout for our plaque-targeted monoclonal antibody further supports the importance of these soluble species. The amount of plaque lowering with gantenerumab was reportedly less than expected, and we look for a more complete assessment of the relationship between plaque lowering and slowing of disease progression at the upcoming CTAD Meeting. Lecanemab was designed to target what are known as protofibrils, which are soluble, and is a similar approach to ACU193, targeting Aβ oligomers, which are also soluble. We view these similarities as important to the ACU193 program, so I'll take a minute to discuss them in more detail. The relationship between Aβ and Alzheimer's disease is complex, and Aβ may exist as soluble species, which include monomers, oligomers, and protofibrils, as well as insoluble species, which include fibrils and amyloid plaques. The fact that amyloid plaques begin to deposit 15 to 20 years prior to the onset of cognitive symptoms is now well-established. Following the appearance of plaques, neurofibrillary tangles and synaptic degeneration begin, leading to inevitable cell death in the brains of patients with Alzheimer's disease. This temporal course and other data suggest that deposited plaques are not themselves toxic. However, we believe that amyloid plaques can be one source of the soluble Aβ species that are toxic, which includes the protofibrils targeted by lecanemab, as well as the forms of oligomers targeted by ACU193. Many years of research indicate these soluble species inhibited normal electrophysoilogic activity of brain cells, known as long-term potentiation, and they disrupt their function. Considering these data together, since ACU193 and lecanemab both target similar soluble Aβ species, we believe the recent announcement of a statistically significant benefit from lecanemab in a Phase 3 trial improves the probability of success for ACU193. Importantly, lecanemab exhibited a lower rate of ARIA than other monoclonal antibodies that directly target plaque, even though it does reduce plaque load based on PET imaging. This finding suggests that targeting soluble Aβ species such as protofibrils or Aβ oligomers rather than plaque directly may lead to a better safety profile. The gantenerumab ARIA rate of 25% announced today further highlights the safety challenge with antibodies that directly target plaque; a somewhat lower rate of ARIA for gantenerumab compared to abetamabs and donanemab would be consistent with less plaque reduction for gantenerumab compared to those monoclonal antibodies. ACU193 appears to have little or no plaque lowering based on animal studies and ex-vivo studies using autopsied human brain tissue of patients with Alzheimer's disease. For these reasons, we are hopeful that minimal or no ARIA will occur with ACU193 in the clinic. The development of therapies with less ARIA and greater or equal efficacy will continue to be an investment opportunity for the foreseeable future in Alzheimer's disease. And with that, I'll turn the call over to Matt.

Thank you, Eric. Good afternoon, everyone. Our complete third quarter and year-to-date 2022 financial results are available in the press release we issued this afternoon and in our 10-Q filed today. With approximately $200 million in cash and marketable securities on the balance sheet at September 30th, we ended the third quarter in a strong financial position, which provides us with the runway to achieve multiple clinical development milestones. Based on our current operating plan, we expect our cash to last through 2025. R&D expenses were approximately $8.3 million in the third quarter. The increase over the prior year period was primarily due to the increased activity in the ongoing INTERCEPT-AD trial. G&A expenses were $3.1 million in the quarter, with the increase over the prior year period primarily due to increased headcount. This led to a loss from operations of $11.4 million in the quarter. In conclusion, we remain well-financed to execute against our strategic priorities. We look forward to reporting topline data for INTERCEPT-AD in the second half of 2023, and we'll remain disciplined as we use our capital to advance our clinical program for ACU193 and deliver value to patients and shareholders. And with that, we can open the call for Q&A.

Certainly. Our first question will come from Paul Matteis of Stifel. Your line is open.

Hi, this is James on for Paul. Thanks for taking our question. Maybe just to clarify kind of on the exact dynamics in enrollment and how they're playing in with the delay here. I'd just be great to understand… I see you're kind of expanding clinical sites, but it would be great to understand what you think is maybe causing the delay, if at all, if that's kind of what is baked into the later readout in the second half 2023? And then just a second question, specifically, you mentioned everything in the blinded Phase 3 looks good. But I was wondering if you could speak to anything more specific and if you're seeing kind of any instances of ARIA or any sort of specific signals that would be great? Thanks so much.

Thank you, James, for your question. We expected both of those inquiries early in the Q&A session, so I appreciate you bringing them up. Regarding the updated guidance for 2023, it relates to our current status with enrollment and the legacy factors from late 2021 and early 2022. The momentum has significantly increased, which is why we've decided to project the completion of enrollment in the first quarter. Traditionally, we have provided guidance within a six-month timeframe, and we have now shifted our expectations to the latter part of the year based on our current position in the study. Concerning safety, I can only say that at this point, we are quite optimistic about what the blinded data has indicated upon review, consistent with our original expectations for ACU193 regarding its safety profile related to various clinical measures. I won’t go into further detail, but as I mentioned, we are encouraged by what we have observed so far.

Great. Thanks.

Our next question will come from Tom Shrader of BTIG. Your line is open.

Good afternoon. Thanks for taking the question. I had a question on the assays to measure Aβ oligomers directly in their complexes with antibodies. How easy are those? How ready are those sort of for prime time? Is that something you think you could use from an interim look? And is it something you think you could follow with time? Or is it a more elaborate asset? Just curious where that is in terms of being useful in a clinical trial setting?

Well, yes, thanks for the question. It's a very pertinent one. That assay is under development. We have a prototype already, but the sensitivity is being increased. And I should mention that rather than trying to measure oligomers directly, what we are trying to measure is the oligomer bound to the antibody ACU193. And the reason for that, as you probably know, is that the oligomer concentrations are very low in their symptomatic range. And so you're trying to take just the oligomer concentration is low to begin with and then when it gets lower, it just becomes technically not feasible. But what we do want to do in our study is show target engagement which is defined as antibody 193 bound to the oligomers. So that concentration obviously will go up with dosing. And that's the assay that we're actually working on. Now, to get to the question about the interim, there's no interim analysis for our Phase 1 study per se. We do look at safety data routinely. But there's no formal interim analysis. Now, we will do an interim analysis for the Phase 2/3, as I mentioned. And we're still working out the details of what all might go into that. I think our target engagement really will probably come out of this Phase 1 study. I don't know that we'll need that as part of the interim for the Phase 2/3, but again, we haven't finalized the design of the Phase 2/3 study yet.

Okay. If I can follow-up with a question from your prior life. Where are you in your thoughts on using counter-pathology as part of the recruitment? Is that still very much in flux? Do you think it's a good idea? Just you're going to be one of the next people to design a big trial?

That's an interesting question. The programs are incorporating counter-pathology into their inclusion and exclusion criteria. From a scientific perspective, it's a defensible approach, though I have some doubts about its practical application, especially in clinical settings. The requirement for a positive amyloid result followed by a positive tau result, and ensuring the tau levels are just right—not too low—might pose significant challenges in practice. However, I understand the scientific reasoning behind this methodology.

Got it. Thanks for the detail.

Our next question will come from Colin Bristow with UBS. Your line is open, Colin.

This is Yang on for Colin. Thanks for taking our question. We have two questions. So the first one is that what are you specifically looking for in terms of presentations at the CTAD meeting, for example, from your competitors? And the second question is with the level of cognitive slowing, do you think it is clinically relevant? Thank you.

Thanks. So I think—go ahead, Eric.

Well, yes. So in terms of the CTAD meeting, and I think you referred to the presentations on gantenerumab, which are on consecutive days, we're looking forward to those presentations. We've seen press releases for both studies. Obviously, one was positive and the other was negative. But to really understand the results, I think we need to see more of the data, and we're looking forward to seeing those presentations. As far as your second question about being clinically meaningful, this has become quite an important question for the field and there are a number of efforts to understand this better, including efforts by the Alzheimer's Association. Generally, there has been broad consensus that slowing disease progression by 25% or more is clinically meaningful. So 27% for lecanemab, based on that consensus number, would cross that threshold. The other thing to point out is that I don't think anyone expects a single drug to cure this disease; if lecanemab shows a progression decrease of 27%, the next drug that is used in combination therapy with lecanemab might slow it another 25%, 30%. By the time you get two or three drugs having an effect, it will be very obvious that this is clinically meaningful, but you have to start somewhere, and you can't start with the expectation that a single drug is going to cure the disease or create some huge effect on the disease. I think that's what the field is trying to understand right now. But generally, I personally think, and I think many people in the field think that 27% crosses the threshold for clinical meaningfulness for us.

Thank you, this is very helpful.

Our next question comes from Judah Frommer of Credit Suisse. Your line is open.

Yeah. Hi. Thanks for taking the questions. First, just, Dan, to follow-up on the enrollment commentary around issues from 2021. Is that largely COVID? Is there anything else you'd call out, whether it's competing against other late-stage trials or publicly available information from those late-stage assets?

Yeah. Thanks, Judah. I think that the legacy issues in 2021 were certainly COVID mediated in terms of site activation and access to patients and getting stuff standing up during the course of the pandemic. I think we tried to get a sense of whether, to the best of our understanding, our sites weren't necessarily competing with other studies at the sites per se. We are doing a Phase 1 study in patients. So I think the value proposition and the ask of getting patients enrolled, we've refined that messaging in multiple formats. And I think a lot of the steps that we've taken, a lot of ground game that we rolled out over the course of this year has really impacted the current momentum in the study. So I don't think we can attribute the current progress—we're obviously updating with a shift to the back half of the year—but certainly, the progress is a result of many little things that we've gotten right over the course of this year as we've made additions to the team and explored some other avenues towards recruitment. So again, we're really encouraged with the progress and the operational elements that are in play right now, which is why we've decided to guide toward the first quarter enrollment.

Understood. And then just to follow-up on what I think is new commentary in the prepared remarks around business development and obviously, you hired a Chief Legal Officer. Anything you could elaborate on regarding your thoughts around business development, would it be assets that would work in conjunction with ACU193 or is it more than that?

Yeah. I think the color I'd add to that, Judah, is a great question. Thanks for picking it up there. I mean, we did want to make some comment in the script as business pipeline expansion has always been part of our business strategy. I think on the heels of lecanemab's success and as Eric noted, the higher probability of success for ACU193, I think that the pipeline expansion criteria and priorities are more aligned with ACU193 going forward and looking for things that are complementary, supplemental, or additive to that asset. Beyond that, we don't have a specified time frame. I do think as we look at the deployment of capital, we're pretty judicious and I think we are looking for things that are going to be near-term, have reasonable capital requirements, and also have specified milestones that would be appreciated and valued by shareholders and potential investors.

Great. Thank you.

Our next question will come from Charlie Yang of Bank of America. Your line is open.

Hi, this is Charlie on for Jeff. So I guess my first question is regarding the CTAD presentation from lecanemab and gantenerumab—what kind of data, specifically maybe more about what you said, would you like to see to help gain more confidence with your assets? And the second of all, regarding your computerized cognitive assessment test, are there any beta or publication evidence you have that can correlate that to the CDR sum of boxes or other traditional cognition measurements which we can use to somewhat extrapolate the data from the Phase 1 results? Thank you.

Well, yes, thanks for that question. There's a lot to dive into there. Yes, as far as the CTAD presentation, there are a lot of biomarker effects that will be of interest, things like phosphorylated tau in plasma or cerebrospinal fluid, I think will be important for both compounds, lecanemab and gantenerumab. One of the important things about lecanemab, based on our press release, is that at least according to the press release, they were seeing very early separation between drug and placebo in the clinical measures, even at six months, which is fairly remarkable. So we're going to take a close look at the time course of the effect, which—as you can see in the graphs in the press release—you expect the effect to grow over time with the disease-modifying therapy. So I think those are—there's just a lot to look at in those studies, and they will guide us in terms of the design of our Phase 2/3. As far as your other question regarding the Cogstate computerized battery and its relationship with the CDR, even in our Phase 1 study, we are measuring—the CDR, and obviously, we're doing the Cogstate battery. This will be a small sample size, but it will be the first attempt to actually see how those measures line up with each other. The CDR, as you may know, consists of six items, three of which are taken from measures, and three are more functional measures. That's a little different than our Cogstate battery, where these are all computerized tests that we—are cognitive measures. So there may be a little dissecting out to be done, too. But again, the reason for putting the computerized testing in the Phase 1 study to start with is we think it should have less variability than the CDR sum of boxes, which does have a certain amount of subjectivity to it. This will give us a better chance of picking up front signals if one is there.

Thank you. Just a quick follow-up regarding the potential timing for Phase 2 initiation—is 2024 still roughly the time frame for the trial to initiate? Or is there going to be some sort of delay to either late 2024 or early 2025?

Yes. So Charlie, we have just guided the notion that we are looking to start that Phase 2/3 study as expeditiously as possible. We recently did receive the Fast Track designation from the FDA, which we think reaffirms our notion that ACU193 is potentially addressing a large unmet need. We'll use the Fast Track as well as our previously disclosed plans to have an FDA engagement around an end of Phase 2 interaction with them to discuss the merits of the Phase 2/3 design. We will obviously need the data set from INTERCEPT-AD as part of that briefing document, and there will be some regulatory time associated with the review and discussion. But I think our goal is certainly to launch that Phase 2/3 study in early 2024. I don't think we can guide beyond that, but I do think based on our best estimates, certainly a 2024 event. And early in the year is our stated objective internally with the team.

Great. Thank you.

Great. I think that's it for Q&A.

I'm showing no further questions.

Okay. That's it for the Q&A. Thank you so much for your interest. And if you have any questions, please don't hesitate to contact us at the company. All right. Have a good night.

This concludes today's conference call. Thank you for participating. You may now disconnect.