Alx Oncology Holdings Inc (ALXO) September 2026 Conference Transcript

discussion. My name is Derek Archula. 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 Lettman, CEO, as well as Harish Shantaram, CFO. Gentlemen, thanks so much for joining us.

Yeah, thanks for having us. Always a great meeting. Appreciate it.

Excellent. Well, Jason, maybe, you know, start us off just a little background on what ALX is doing and ALXO is doing, and ultimately, you know, we have a couple, you know, interesting catalysts coming up, most notably for 2004, you know, phase one update here in the second half of 26. 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 in this panel. So if there's any tough clinical questions, Harish is the man for that. But, you know, it's an exciting time in the company. ALX has been at this for about 10 years. And I think, you know, there's really been a lot of data, a lot of advancements in the field. And certainly, you know, I think from our perspective, we're just at a really interesting inflection point with both programs. You know, as a reminder, we're pursuing Evo, 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. And for us, the story of CD47 is really, you know, 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, you know, we just continue to see a clinical signal there and a targeted signal in the patients that we think will most benefit from evo. And then the new program, AOX 2004, you know, we developed that program in-house. You know, I think these days that in of itself can differentiate. But 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, you know, are at a really exciting inflection point there as well. We've been dosing patients in our dose escalation now since August, and I think we've been pleased with how it's been translating. So 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 one mg per kg, we were able to double to two mgs per kg and double again to four, and over the summer, we shared that we've been able to escalate beyond four. 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 been 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 the topo-based ADC, such as ILD. We, of course, understand we also need to share activity. And 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 2004. When you were constructing the asset and sell it to build this program, how did you kind of build it to differentiate versus kind of 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. Non-PhD, I think, is good for everyone. But we were really pleased to assemble an incredible team at the time, led by John Mappons, who's probably one of the most successful drug hunters that I know. And 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, right? 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 Metuzumab. We believe and we think we are the only ADC in development with Metuzumab as our epitope. And we know an ADC's epitope matters. And metuzumab 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. And parallel to that, we spent a lot of time optimizing the payload linker. I think what was also unique is we used in HER2 as our benchmark. Of course, in HER2 is the best performing topo ADC out there, and we use that to really develop and benchmark both our on-target internalization as well as our bystander effect, and 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.

So, I mean, you talked about, you know, 20 patients worth of data, and you kind of explained, you know, the dosing, one, two, four, and now you're beyond four. I guess, should we think about how many patients per dose court should we really be thinking about? And ultimately, as I think you alluded to, we really should be focused on safety because it's going to be a 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?

I mean, I think the good news is our assumptions going into this have largely held, which is at four, we were hoping that would be entering the therapeutic window, and we continue to feel that way. You know, I think most topo ADCs have struggled to get much beyond five. They've started to run into significant DLTs that have led to, you know, an MTD. So for us, it's an ability to show at four and above we have a therapeutic window. so call it 4 to X, and we have some room to play there. And I think with this update, it's really an early update on dose escalation with an eye towards expansion. And 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. And, you know, 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. And I think the other really important part about this study is this is a 100% U.S.-based study. We're enrolling across the top U.S. academic centers, so Moffitt, MD Anderson, et cetera. And so 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, you know, in the world, frankly, in terms of therapeutics. And, again, I think if we can deliver, you know, a tolerable dose and drive some activity, you know, that would be a check in the box, so to speak, for this phase.

Have you talked about, you know, the number of patients, you know, at each dose and what percent are above four?

We haven't commented on that. I think if you just look back and you think about a buoyant design in a phase one, you call it three, four, five, and then you think about where we'll be, you know, I would hope we're at ten or better at the right dose, if you will, and be able to comment on that. You know, 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, And for a lot of ADCs, that's the inflection point, right? You then, at that point, have demonstrated a profile that will really set you up for the next phase.

So, again, in terms of, you know, the objective of this trial, I mean, is it mostly to see, like, no DLTs, or do you want to see a DLTs? And also, you know, should we expect, you know, or I guess you tell me, what would you say in terms of, you know, rates of, you know, 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, you know, every ADC, right, is going to be dose limited. When you put a payload on an antibody, you know, it's going to drive toxicity at a level. And I think for us in dose escalation, just going from one to two to four 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.

So I don't think it's realistic to expect no dose-limiting 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.

And then just in terms of what you view as kind of differentiated from current EGFR therapies.

Yeah, I mean, I think we do want to really address skin-related tox. I mean, that can be a chronic thing. That can be a challenge. Ultimately, the bigger issues for topo ADCs like ILD, of course, we don't want to have a high rate of that, ocular, etc., grade 3 diarrhea, etc. So again, we're going to see some toxicities. It's always the case, but you want to be able to see toxicities that are predictable, relatively manageable, etc. And I think that's what we're trying to achieve with dose escalation.

Gotcha. And then with the first update in the second half of this year, you know, what sort of things do you show from an activity standpoint? I mean, obviously, it'll be more mature, you know, in the follow-up update, but, like, what would you want to highlight here that could give us, you know, some little nuggets of...

Well, I think the hope is, and what we've been trying to consciously think about, is where are we going with this drug? What is ultimately going to be the population of interest? And I think for us right now, there's no question lung, head and neck, and esophageal are of interest. So So 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. So ideally, the next time we're talking, we're going to have activity across multiple doses and multiple tumor types. And I think when you have that paired with a therapeutic window for an ADC, you know, exiting dose escalation, you're in good shape. And that's what we're trying to share with this update.

I presume when you guys share some of that activity data, you really kind of concentrate on those, you know, maybe 10 patients at the higher dose or whatever kind of target dose would be to kind of share that. Right. Right.

That's helpful.

And then, yeah, maybe just the follow-up date, how many patients would you expect in the later update? Next year, you mean? Yeah.

You know, I think if we do this well, from our perspective, we need to go, you know, with speed, with pace and urgency. There's no question there's an incredible amount of development in the ADC landscape. So when we reach that next update, my goal would be to get into the right patients. So let's call it second slash third line lung, second slash third line head and neck, for example, and to be able to deliver proof of concept in those tumor types. So what 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 late-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 step.

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. We've seen benchmarks today. I think there's no question. In second line, head and neck, you've 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. So I think there's been some exciting developments in that space already, and we certainly feel like we need to be competitive with those. You know, I think when you look at lung, certainly there's a lot of activity, and mutant lung, wild type, I think, is much more open. And 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, you know, we see opportunity across all of those spaces. You know, and I'd add esophageal to that. Second line esophageal is really wide open. You know, 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.

You know, to operationalize this program more, you know, robustly, you know, in terms of, you know, we get the data next year, what would you really want to do first in terms of, you know, getting into either a larger trial, registrational, where do you kind of see that, like, where are you heading and how fast you go there?

Yeah, I think if we do this well, you know, our internal goal is to have both programs on the doorstep of registrational studies this time next year. So if we can have both Evo and 2004 pushing into phase three studies when we're sitting here next year, then I think that's success. Again, given where we're trading. I'm also hopeful we're valued at a different range. I think that'll come, of course, that's 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's what's in our control right now. Excellent.

Maybe that's a good segue to Evo and Aspen Breast. So maybe just talk to us about where you guys are with enrollment there, and obviously the data is next year, so we can kind of tee that up a little bit in terms of the benchmarks and ultimately where we want to take it.

Yeah, so execution has been really strong there as well. For those who have tracked the story, what's really changed is the emergence of CD47 as a biomarker. I think in IO, there's been the PD-1 story and then everybody else, and it's 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 Pembro. Again, I know that's bold, but we think we have a biomarker and it's our target. And what we've 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. And so that data, starting with our Aspen 6 data in gastric, and then the data we presented at Asmobrest in the spring, has really helped elucidate that for clinicians. So that's been a huge boost for first site activation and now enrollment. So we feel really confident in enrollment and what we're seeing in terms of the pace of patients getting into the study.

Got it. And you're pretty confident, you know, those patients, you know, that will have enough mature data by the 27, like everything's still tracking that?

Yeah, everything's tracking for sure. I mean, as you know, you know, this study is in essence an all-comers study. So we're going to have patients in this study that are CD47 high and CD47 low. And so that'll give us an ability to compare, again, not in a randomized way, but to understand how these various populations are doing in that study. So that's something that we're 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 haven't done that to date. Again, we just want to have a nice balance. The CD47 high subgroup will be the basis for our phase three. So we want to ensure we have enough patients in that bucket, if you will, to make some conclusions.

I mean, have you guys communicated kind of the expression thresholds or the cutoff, you know, for the pre-specified analysis?

We haven't. I mean, right now what we know is in our gastric study is whether you pick IHC2-3 in terms of CD47, IHC3, so sort of high to medium expression, you know, it really didn't matter. And in the breast study, in the breast data we shared in combination with ZANI, it was similar. Meaning, if you just did on-off there versus not, you know, we were able to show a pretty strong benefit. In that study, we were five for five 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. So, I mean, you know, it seems like the data is fairly strong and very suggestive that this strategy will work. I guess, what do you think the disconnect? Is it just more, you know, we need to see more data or, I don't know, And maybe it's different in the investor community versus, you know, the actually physician community in terms of, like, how they feel about CD47 as a biomarker. Although I will say that, you know, as you were alluding to earlier, it's a storied history with CD47. So maybe that's got something to do with it. Maybe you can talk to that.

I think with clinicians, you know, they might have a shorter-term memory than investors in pharma. Well, I think there's such a big patient need in this setting. I mean, patients that progress on Inher2, it's pretty woeful as to their prognosis.

So I think everyone understands that.

And there's really no IO agents approved in breast. And so that's our opportunity is to drive a next-gen IO agent. And I think 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. I mean, 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 Evo, you separate that from the history, it's a strong story. And I think that's what's been working.

I mean, can you talk to some of the differences between those legacy programs and certainly kind of the benefit that you've seen more on the heat talks and things like that that really haven't been an issue for Evo?

I mean, 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. And so how do you do that? Well, 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 You can't do it that way, so you have to separate the don't-eat-me signal from the eat-me signal, and that's what EVO does. EVO 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 macrophage to eat. It's those two things working together. And so long story short, I mean 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.

So when we get to the readout mid-year next year, so can you give us, just walk us through how you plan to kind of disclose and what level of data that you'll give us and then ultimately, you know, next steps after that, will they be communicated then or will you have to go out to the FDA and kind of get an understanding of next steps?

I mean, I think in terms of the update, it'll be a pretty robust number of patients again feeling really good about enrollment. So I think the setup there is great and in the path forward is also very clear of course we're gonna need to meet with the agency and get their buy-in on where we're headed but if you look at the design of the study we're running right now it's EVO plus TRAS plus chemo versus TRAS plus chemo and I think that's what the phase three will be is versus TRAS plus chemo. So for us it's a pretty clear path. And 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, like, ORR, or will we get PFS, and what level of durability? That's a complicated clinical question. Let's get Harish in on this.

No, I mean, primarily the ORR, and we do believe we'll have some early color on durability. and with the data set and enrollment timeline we have. So I think we should have some early read on that as well.

I mean, would there be any reason to think that there would be kind of compression in the signal relative to the high and the low CD47 patients in the astrologist because it's larger or different type of population? Maybe just walk us through why that could occur.

Yeah, I mean, Harish can weigh in too as our sitting CMO here. But I think we're not going to show an ORR of 100%. I'm confident in that.

The five out of five.

Yeah, I mean, that was phenomenal. I think the benchmarks in this space we know.

About 15% is what we've seen from a real-world data study, for example, in a post-inheritive setting. So, I mean, we believe, you know, so that's going to, as long as we can show an ORR, let's say, doubling that rate and show a meaningful improvement in the DFS. Right now we're probably, what the data suggests is three to four months is what we've seen in the real-world setting. 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's a negative prognostic.

So it could even be low.

When we said 15%, that was the overall. I don't think we haven't studied. I don't think there has been data to see exactly what the rate, but it could suggest it could be even lower than that, you know, given the negative prognostic.

I think in the breast data we shared in the CD47 low group, the PFS was around three and a half months. And that's consistent with what we see with the real world study that Harish mentioned. Three, four, five months. Again, it's a low bar. So if we could post a gain to that, I think that'll be a win.

So, you know, maybe think about, you know, for the phase three, like a registrational trial, what that would look like and, you know, what that typical timeline would be.

Yeah, I'm happy to take that, or you can take it, Arish. But I think for us, it's... Is he going to get paid for the CMR?

Oh, I don't know. I feel like this might come up at year end.

You know, I think it all depends on magnitude of benefit, right? If in a targeted oncology play, if you can drive a really significant delta versus control, that then informs your powering. So 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 three, it's going to be a pretty tight phase three. You're not going to need to run six, 700 patients. Again, that's part of the reason why we're doing this study to help inform that. And hopefully we're sitting here this time next year and we're looking at a really transformational benefit for patients, which then should lead to a rather quick phase three is our goal.

What would the control arm do you think be in that trial?

I think it's going to be in line with what we just said, so 15%-ish ORR. I think Harish made an important point.

Oh, no, EVO plus chemo. Sorry, trast plus chemo would be the control.

Yeah, right. Okay, gotcha.

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 CD47's expression. So I do think that's going to be important to, to, you know, as we go and design and proactively select, prospectively select these patients in the phase three setting. Gotcha.

So, trials positive, we're all happy, everything's going well. So, I guess, you know, talk about the post in HER2 kind of opportunity and breast and then ultimately what other, you know, 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 the 20,000 patients who are probably are more, you know, the retains HER2 positive as well as a high CD47 expression. This is a sizable market opportunity here so that we think we can address with EVO. So that's what we're going for in this trial.

And then just other tumors, like where would you go after this, you know, once you kind of lay down the foundation in breast?

I think the beautiful thing about CD47 is it looks like an immune checkpoint. So if you look at the tumor types where CD47 is overexpressed, it's frankly harder to find tumors that don't have it. So that's what is exciting is it looks like, again, an IO mechanism. So 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. And heme was where CD47 started, right? So NHL would be an opportunity, multiple myeloma, et cetera.

Do you think the CD47 expression would differ, like, across the different tumor types?

It definitely differs. I mean, 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 overexpressed CD47. You know, 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. You know, 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 three.

Just within breast, I think we'd have multiple places to go beyond just second line plus. so you know again I think if we are successful in this study it's going to unlock a lot of really interesting indications and just to bring it back to like kind of head and neck so now you have potential two assets right how do you think about you know the development for both of those and where you'd want to play you know relative to kind of EGFRs next gen EGFRs moving earlier to the first line and you know we had fixes today with second line data and focus there so where would you kind of look to play with both that?

Yeah, I mean, I think the future of that space, like many, is going to be in combinations. I mean, I think with Evo, we have a really unique opportunity to combine with the existing antibodies like cetuximab as well as with PETO and AMI. Both of those bispecifics are FC active antibodies. So I think that's an interesting place for Evo 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, right? 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. And so our ability to find for them a CD47 high population where they could effectively be the only ones competing is really interesting. And I think 2004 or as unique opportunity, of course, as monotherapy. Again, if you think about what could be competitive with a bispecific, well, I'd argue ADC targeting the same target as 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, you know, in a rambling overview, how we're thinking about head and neck in a nutshell.

Gotcha. So let's talk about kind of cash runway and what's funded through that runway.

Yeah, Rish can put his CFO head.

All right, now, finally.

So our cash runway gets us into the first half of 28, and primarily we're funding the two programs we just talked about, which is the LX2004 through the dose escalation. I think it's going to be an important data set. And then through SBEN9, the phase two trial, I think. And we're also in parallel trying, you know, investing in key areas that it's going to be critical for phase three readiness. I mean, talking about compending diagnostic investments for, you know, CD47 and as well as insuring on the CMC fund.

So that's kind of where our focus areas are.

Clearly, the goal being end of the day, how do you ensure that we're, you know, face, you know, pivotal ready in both those programs, you know, by the next year? Gotcha.

So maybe going back to the last set of questions here. So you talked about a little bit of the history of CD47 and kind of novel epitope, all those things. Maybe do you feel like that's kind of the most underappreciated thing about Evo? And maybe just kind of talk to us about what you think people are missing on ALX here.

You know, I think what's fun about what we do is all of these stories and indications just have an unpredictable trajectory, right? And I've 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'd expect. But again, fundamentally, and why I'm here and a lot of us are working at AOX is that mechanism in our Series A is the same one in our slides. So that's what's 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. And so that's what we think holds. And again, I think where we're 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's 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. You know, we had a pharma tell us you should just take CD47 off of your slides and just present the data. So we don't have the power to change the name of the target and see the history. But I do think, you know, we have our data, and I think that's what gives us conviction. And with 2004, 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. And I think we've been really pleased with how that program has been going as well.

Jason Harish, we'll leave it there. Thank you so much. Thanks for having us. Yeah, really appreciate it. Thank you. Thank you. Thank you.