Hello and welcome to the Eledon Pharmaceuticals Third Quarter 2021 Earnings Call and Webcast. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to CFO, Paul Little. Please, go ahead.

Good afternoon, and thank you for joining Eledon's third quarter 2021 financial results conference call. Joining me today is David-Alexandre Gros, Chief Executive Officer; Steven Perrin, President and Chief Scientific Officer; and Jeff Bornstein, Chief Medical Officer. Earlier today, Eledon issued a press release announcing financial results for the third quarter ended September 30, 2021. You may access the release under the Investors tab on our company website at eledon.com. Before we begin, I would like to remind everyone that statements made during this conference call relating to Eledon's expected future performance, future business prospects or future events or plans may include forward-looking statements, as defined under the Private Securities Litigation Reform Act of 1995. All such forward-looking statements are intended to be subject to the Safe Harbor protection provided by the Reform Act. Actual outcomes and results could differ materially from these forecasts, due to the impact of many factors beyond the control of Eledon. Eledon expressly disclaims any duty to provide updates to its forward-looking statements, whether as a result of new information, future events or otherwise. Participants are directed to the risk factors set forth in Eledon's reports filed with the U.S. Securities and Exchange Commission. It is now my pleasure to pass the call to Eledon's CEO, Dr. David-Alexandre Gros. DA?

Thank you, Paul, and thank you all for joining us this afternoon. We formed what is now Eledon just one year ago, when we acquired Anelixis and concurrently executed a financing with leading life science investors. Since then, we have built a world-class team and strived towards initiating clinical trials in three therapeutic areas; transplantation, focusing on kidney and islet cell transplantation; autoimmunity, focusing on IgA nephropathy; and neurodegeneration, focusing on ALS. I'm proud of the progress our team has made over the past year and especially the past months, underscoring our focus on operational execution. Specifically, we are nearing completion of enrollment in our Phase 2 trial of AT-1501 in adults with ALS, with 16 of 18 subjects enrolled in the fourth and final cohort. We received a no-objection letter from Health Canada, allowing us to initiate our open-label clinical trial evaluating AT-1501 in kidney transplantation, and we are in the process of opening our first site in Canada. We received IND clearance from the FDA to proceed with a clinical trial to assess the safety and efficacy of AT-1501 in the prevention of rejection in patients undergoing islet cell transplantation for the treatment of Type 1 diabetes. We initiated an AT-1501 monotherapy kidney transplantation study in non-human primates as requested by the FDA in advance of a potential IND application for AT-1501 in kidney transplantation in the United States. We announced a research collaboration with CareDx, a world leader in transplant diagnostics and services, and we've recently announced IgAN as the next indication for development of AT-1501 and remain on track to begin opening sites for the Phase II study by the end of this year. Finally, we presented additional data at the International Pancreas and Islet Transplantation World Congress from our nonhuman primate islet transplantation study focusing on the potential benefit of using AT-1501 in transplantation versus traditional immunosuppression including calcineurin inhibitors. Before Steve and Paul dive into last quarter in more detail, I'd like to talk about the importance of our upcoming work with CareDx as well as share some thoughts about 2022 since the New Year is quickly approaching. We recently announced a research collaboration with CareDx in October. This multi-year and multi-trial collaboration enhances our capabilities for our upcoming and potential future clinical trials of AT-1501 in kidney transplantation for a number of reasons. First, it gives us access to CareDx's Kidney Care suite including AlloSure, a noninvasive cell-free assay that looks for donor-derived double-stranded DNA in the blood as an indicator of graft rejection. Second, it gives us access to algorithms including iBox, a predictive algorithm that provides a prognostic indication of allograft survival. When possible, we plan on integrating biomarkers and algorithms such as these into our renal transplant studies as exploratory endpoints to allow us to better characterize AT-1501's performance and its differentiation from current standard of care, and potentially allow us to do so at earlier time points than what's historically possible. Finally, as we plan and execute our trials, we will benefit from CareDx's large footprint, experience with kidney transplantation clinical trials, and its established relationship with both key medical institutions and opinion leaders. I'll end by talking about 2022. With our ALS Phase II study enrollment nearly completed, enrollments in other trials are expected to begin in the near term. Starting with ALS, in the first half of 2022, we are approaching a very busy year of sequential clinical data readouts from ALS renal transplantation IgAN and transplantation.

Thank you, DA. As a brief reminder, our lead asset AT-1501 is an IgG1 anti-CD40 ligand antibody lacking Fc effector function. Physiologically, the interaction of CD40 ligand and CD40 results in T and B-cell clonal expansion, antibody production, and secretion of pro-inflammatory cytokines that amplify an immune response. The CD40/CD40 ligand pathway is an attractive drug development target because the engagement of these receptors plays a pivotal role in immune system activation by mediating both antibody and cellular immune responses. Our programs are centered around the development of antagonistic antibodies that target the ligand rather than the receptor since inhibition of the ligand has shown greater efficacy in preclinical models of autoimmunity, as well as in the prevention of acute and long-term allograft transplant rejection in animal models. I'll begin my program updates with ALS, our most advanced indication. Previous research has found the costimulatory pathway to be an overactive pathway involved in more than half of people with ALS. Preclinical work has demonstrated that stopping or delaying immune system activation by inhibition of CD40 ligand can improve muscle function, slow disease progression, and improve survival in an ALS animal model. This provides strong scientific rationale for the development of AT-1501 in this challenging indication. We're in the midst of a 12-week open-label dose-escalating study enrolling up to 54 patients at 13 sites in the United States and Canada. Enrollment in the fourth and final cohort is nearly complete with 16 of 18 patients enrolled, and we remain on track to report data from this study in the first half of next year. Data that we are looking to obtain include safety and tolerability as well as multiple categories of biomarker endpoints, with each subject serving as their own control by comparing changes from baseline. The first category of biomarkers will assess CD40 ligand target engagement. Mechanistically, inhibiting CD40 ligand function has profound effects on B cell maturation, antibody production, and antibody class switching. We anticipate we'll be able to assess the inhibition of CD40 ligand target engagement by AT-1501 with biomarkers of B cell functions such as CXCL13. The second category of biomarkers includes changes in pro-inflammatory chemokines and cytokines that are upregulated in people living with ALS. There is a long history of ALS data describing increases in pro-inflammatory signals in circulation, including TNF alpha, MCP-1, IL-6, and others as examples. We anticipate the inhibition of CD40 ligand will result in an overall decrease of these pro-inflammatory markers. Finally, we will also assess exploratory endpoints including changes in ALS functional rating scale or ALS FRS, respiratory function, and levels of neurofilament light chain in circulation. We consider these endpoints exploratory since we do not know if 12 weeks of therapy is sufficient time to see an effect. Of note, seeing an effect on neurofilament light chain would be particularly exciting because of this biomarker's association with neuro health and may allow us to be the first company to both show that a therapeutic intervention can lower inflammatory biomarkers of ALS as well as lower neurofilament light chain in patients where they are elevated. We're in the process of opening our first site in a Phase 1b de novo transplant study in Canada, enrolling up to 12 subjects undergoing renal transplant. Our goal in this study is to demonstrate that AT-1501 is safe, achieves predictable drug levels, and prevents allograft rejection when used as a preclinical replacement for CNIs as a component of an immunosuppressive regimen in this patient population. As DA mentioned, we'll also be looking at exploratory endpoints including biomarkers. The reason we're looking to replace CNIs with AT-1501 as the backbone of transplant immunosuppression is that CNIs have been shown to be beta-cell toxic, causing diabetes; neurotoxic, causing neurological symptoms including tremors; resulting in hair loss; creating an increased risk of heart disease, infections, and cancers. Moreover, the chronic use of CNIs to prevent graft rejection has been associated with nephrotoxicity in up to 30% of patients after one year, 50% of patients after five years, and 100% of patients after ten years. These toxicities can ultimately shorten graft survival, while others may lead to dose lowering or patients becoming less compliant, thus indirectly increasing the chance of rejection. By improving the safety and tolerability of first-line immunosuppression, we believe that AT-1501 has the potential to both improve patient quality of life and overall morbidity in the near term, as well as ultimately improve graft survival rates in the longer term. In parallel to this clinical trial, we have initiated a non-human primate kidney transplant study with AT-1501 as monotherapy as requested by the FDA as a prerequisite to a potential future US kidney transplantation IND. We've begun the transplants as planned and are on track with our initial data from this study expected in mid-2022. Now turning to islet cell transplantation, we are focusing on people living with high-risk Type 1 diabetes, who are on chronic treatment with exogenous insulin and experience severe swings in blood glucose levels, hypoglycemic unawareness, and associated comorbidities. Clinical trials conducted by the immune tolerance network, as well as islet cell transplants in other countries, have demonstrated that islet cell transplants in patients with difficult-to-control Type 1 diabetes can maintain glycemic balance, reinstate metabolic control, and in some cases, even eliminate the need for exogenous insulin. However, the current use of calcineurin inhibitors or CNIs for the prevention of islet cell transplant rejection poses challenges, as CNIs are toxic to transplanted islets, potentially resulting in significant islet cell loss post-transplant and thus potentially leading to the requirement for multiple islet cell transplants in order to reduce insulin dependence and improve hypoglycemic unawareness. Earlier this year, we initiated a Phase 2 clinical trial of AT-1501 in Canada, as a replacement for CNIs in a single center at the University of Edmonton, which is historically the most active islet cell transplant site in North America. Unfortunately, COVID spikes in Alberta have led to the site temporarily suspending elective procedures, including islet cell transplants, twice this year, most recently in August. In addition, due to the COVID environment, it's been challenging to find patients willing to undergo the procedure considering the necessity for immunosuppression. As a result, we announced last quarter that we were considering other geographies for potential expansion. We are proud to announce that the FDA has cleared our IND and provided us with a path forward for the clinical development of AT-1501 in islet cell transplantation in the United States. This IND clearance is particularly important since it covers both AT-1501 as well as a method to purify cadaveric islets necessary for transplantation; it represents the same dosing level we are using in our Canadian transplantation studies and expect to use in future kidney transplantation studies; and it provides us with another geography for islet cell transplantation. Finally, in Canada, we are happy to report that the site in Edmonton has recently reopened and is restarting to screen subjects for elective procedures. In terms of data, we presented additional non-human primate data at the International Pancreas and Islet Cell Transplantation World Congress in October. In a non-human primate model of islet cell transplantation, animals treated with AT-1501 versus those treated with standard care including CNIs demonstrated longer graft survival, better graft function, glycemic control, and healthier post-transplant weight gain.

I'll now turn the call over to Paul for the financial update.

Thank you, Steve. In addition to the financial results summarized in our press release, you can find additional information in our Form 10-Q, which we will file today. The company reported a net loss of $9.8 million or $0.66 per share for the three months ended September 30, 2021, compared to a net loss of $6.1 million or $5.31 per share for the same period in 2020. Research and development expenses were $7.7 million for the three months ended September 30, 2021, compared to $615,000 for the same period in 2020. The increase in R&D costs primarily reflects clinical and CMC activities as we advance AT-1501 programs. G&A expenses were $2.8 million for the three months ended September 30, 2021, compared to $3.7 million for the same period of 2020. The decrease in G&A reflects prior year restructuring charges totaling $2.2 million, partially offset by increased personnel and stock-based compensation costs, legal and other professional fees in the current period. I'll turn to a few key financial metrics for the full year-to-date. The company reported a net loss of $25.7 million or $1.73 per share for the nine months ended September 30, 2021, compared to a net loss of $1.9 million or $16.81 per share for the same period in 2020. Research and development expenses were $17.6 million for the nine months ended September 30, 2021, compared to $3.1 million for the same period in 2020. The increase in R&D costs primarily reflects clinical and CMC activities as we advance the AT-1501 program. G&A expenses were $9.9 million for the nine months ended September 30, 2021, compared to $6.7 million for the same period last year. The increase in G&A spend primarily reflects increased personnel costs, stock-based compensation expenses, legal, and other professional fees. The company had $94 million in cash and cash equivalents as of September 30th compared to $101 million in cash and cash equivalents as of June 30th, 2021. We expect our financial resources to be sufficient to fund operations as currently planned well into 2023, thereby allowing us to generate data across all of our currently planned trials and still have a year of cash on hand. With that financial update, let me turn the call back over to DA.

Thank you, Paul. We have made significant progress during the third quarter advancing our lead molecule AT-1501 with our nearly completed enrollments in our ALS Phase 2 study and receiving regulatory clearances to begin clinical trials for kidney transplantation in Canada and islet cell transplantation in the United States. We're now approaching what should be a very busy year of sequential clinical data readouts in 2022 including for our Phase 2 ALS study followed by interim data readouts for our islet cell transplantation, kidney transplantation, and IgAN trials. With that, I will now ask the operator to begin our Q&A session, Operator?

Thank you. And I'll be conducting a question-and-answer session. Our first question today is coming from Alethia Young from Cantor Fitzgerald. Your line is now live.

Thank you for addressing my questions, and congratulations on your progress. Regarding ALS, I am interested to know if you believe neurofilament light chain could be recognized as a potential biomarker by regulatory agencies. Additionally, could you provide some insight into the baseline levels and any related information? Moving on to IgAN, I would like to discuss how you see the CD40 mechanism being differentiated from other treatments currently in development. Thank you.

Alethia, thank you for the questions, let me turn it over to Steve to talk about ALS and IgAN.

Great question on neurofilament, Alethia. As you know, neurofilament light chain is a fairly new biomarker in neurodegeneration, not just ALS, but multiple sclerosis and Alzheimer's and others as well. Historically, we know from lots of studies that neurofilament light chain is elevated in adults with ALS. But the levels are very variable and they tend to correlate with prognosis more than anything at this point, where at the time of diagnosis, if you have high levels of neurofilament light chain, you tend to be a fast progressor, and if you have lower levels of neurofilament light chain, you tend to be a slower progressor. The only data we have with therapeutic intervention at this point is the recent data from Biogen with their antisense oligonucleotide that's been in Phase 2 studies in adults with ALS. And there they showed decreases in neurofilament light chain, but they didn't necessarily correlate with clinical outcomes or survival. So, we all agree I think in the community in neurodegeneration that neurofilament light chain is a marker of neuron health and ends up in CSF in circulation. But therapeutically we need to demonstrate that that does correlate with other biomarkers such as pro-inflammatory markers, as well as clinical outcomes and that's one of the goals of the exploratory component of our study. Did that answer your first question on ALS?

Yes, that's helpful. It seems like you did the correlation since the numbers and reductions aren't definitive, and you have to interpret the Biogen data, which is somewhat confusing.

We are conducting a 12-week study, which may not be sufficient to show significant changes in neurofilament light chain or clinical outcomes in ALS. However, it would be groundbreaking if we find a link between reduced pro-inflammatory markers, neurofilament light chain, and disease progression. If we could demonstrate that changes in pro-inflammatory markers with therapeutic treatment correlate with changes in neurofilament light chain levels, it would be a significant discovery for our company.

Okay. That’s helpful.

Regarding your inquiry about IgAN and its mechanisms, I’ll summarize the scientific explanation. The pathophysiology of IgA nephropathy is well-established as a multiple hit model. The initial hit involves deficiencies in enzymes that attach the appropriate sugars to IgA, leading to improperly glycosylated IgA that the immune system identifies as foreign. The subsequent step involves B cells producing antibodies against this misglycosylated IgA. This process ultimately leads to the formation of immune complexes in circulation. These complexes, identifying the abnormal protein, get deposited in the kidneys over time, resulting in kidney damage and proteinuria, along with progressive fibrosis and further chronic damage to the kidneys. Other therapeutics currently in clinical development target various components of this multi-hit process, but they may not address all aspects fully. For instance, blocking CD40 ligand could potentially target three of the four hits. This is because it inhibits class switching at the IGM level, which should reduce overall IgA production, consequently decreasing the amount of misglycosylated IgA. Furthermore, blocking CD40 ligand impedes B cell maturation and germinal cell formation, resulting in lower levels of antibody production and less immune complex formation since the misglycosylated IgA won’t be recognized as foreign. Additionally, even post-deposition in the kidney, blocking CD40 ligand has shown to prevent pro-inflammatory differentiation of T cells and monocyte lineage cells, leading to reduced immune cell infiltration and consequently less damage and fibrosis arising from any deposited immune complexes. Therefore, we believe that blocking CD40 ligand may be more effective than other modalities currently in the clinic as it addresses three of the four hits.

Great. That's helpful. And then just another one. On the primate study, have you guys said how many primates you need to enroll or anything about that or where you're in that? Thanks.

We indicated that the guidance we received was a requirement for at least four non-human primates. Today, we announced that we have started the trial, and we have begun performing kidney transplants on the primates.

Okay. Thanks.

Thank you. Our next question is coming from Thomas Smith from SVB Leerink. Your line is now live.

Thank you for taking the questions and congrats on all the progress. I have a couple of questions. First, it sounds like you're making good progress on enrollment. Regarding the efficacy markers in the study, you mentioned neurofilament light chain, which I appreciate. Can you provide more insight into the other exploratory endpoints, like changes in ALS FRS respiratory function? What are you looking for during the 12-week treatment period? I understand it's a short time frame, but would any signals on these functional endpoints be viewed as positive by you? Secondly, concerning the islet cell program and the US IND clearance, could you share more about your plans for enrollment in the US? Since islet cells are still considered experimental in the US, how many study sites do you think you could target, and how do your expectations for enrollment in the US compare to those in Canada?

Sure, so maybe, let me start by turning it over to Steve to talk about ALS. And then I can take over and talk about islet cell. But thanks a lot for your question, Tom. It's so good to talk to you.

Tom, regarding the exploratory clinical endpoints for ALS, a 12-week study is relatively short. ALS has varied disease progression, and it's challenging to distinguish differences in progression rates at diagnosis. Therefore, we would likely be surprised to observe significant changes in the ALS FRS, respiratory function, or muscle function during a 12-week study. Typically, these clinical endpoints are assessed in longer studies, lasting six months, 12 months, or even 18 months. If we were to observe any changes, it would be very exciting, especially if they correlated with the biomarkers we've discussed. However, given the brevity of the study, I would be surprised to see significant findings.

Does that answer your question, Tom? The primary focus here is going to be obviously around safety and tolerability, but then looking for changes in terms of inflammatory biomarkers. And maybe Steve, do you want to add some color on the inflammatory biomarkers we're looking at and what's been historically found in ALS?

Yes. So two types of markers that we're looking for that's directly related to immune cell function. One is target engagement, as I mentioned on the call, blocking CD40 ligand has a very profound effect on B-cell development in germinal cell formation. And it can really block many of the chemokines that are associated with that aspect of an antibody response. So we can measure target engagement by looking at B-cell markers, including CXCL13 which is a potent chemokine associated with B-cell activation. For the pro-inflammatory markers, and I mentioned TNF alpha, IL-6, and MCP-1 as examples. There's a long, long history going back decades of people measuring pro-inflammatory markers in patients with ALS in not only the clinical setting but just in general studies, and those have been very well characterized. So because of the fact that those are elevated and they're pro-inflammatory, if we block CD40-ligand signaling and block pro-inflammatory differentiation of T cells and B cells, we should see a decrease in pro-inflammatory markers like TNF alpha, IL-6, MCP-1 and others.

Got it. Got it. Okay. Super helpful color on ALS. And then on islet cell?

Great. On islet cell, as you mentioned islet cell transplant is considered experimental here in the US. And so a path forward for clinical trial in this country is a big step forward for us. In terms of the design, we'll start – and right now the plan will be to start with a single site in the States. In terms of enrollment, as you've seen with us and as we've seen with some other ICT trials that are being done, enrollment has been relatively slow. What's good here is that we need a few patients in order to be able to have some data that could be meaningful, and that data can come relatively quickly. So we're looking forward to getting our first patients, hopefully, enrolled in the US and Canada. And once they get enrolled, once they get transplanted, what's nice is that within about 90 days we'd be able to see how well grafts are doing. So the impact that AT-1501 might be having in terms of protecting that graft and potentially allowing patients to be insulin dependent. In terms of opening the US site, we just recently got the feedback from the agency. So we'd expect that site to open probably towards the middle of next year.

Understood. All right. Thank you guys for taking the questions, and thanks for the – thanks for the color.

Thank you.

Thank you. Our next question is coming from Matt Kaplan from Ladenburg Thalmann. Your line is now live.

This is Raymond in for Matt. Thanks for taking our question. Congrats on all the progress. Just, I guess maybe just a quick question on the islet cell transplantation program. I was wondering, I guess, since you have a US site and a Canadian site, would the data readout be kind of combined, or would it be similar to the initial Canadian design for the US trial?

Let me turn – first Raymond, thank you very much for the question. Let me turn that over to Steve or Jeff, just to talk about the similarities between the programs.

Yeah. Jeff, you're on the call. The protocols are slightly different. So why don't you explain the nuances?

Yes, sure. Thank you. Thanks, DA. Thanks, Steve. Hi, it's Jeff Bornstein. They are separate trials. So the trial in Canada has been open for some time now. But as Steve talked about earlier, we ran into issues with COVID, and we're optimistic that now that seems to be behind them that they can start recruiting. The US trial is a separate protocol, quite similar in design, really recruiting very similar patient populations. So although they are separate protocols and they're meant to be managed and analyzed separately, the totality of the data we can look at comprehensively to give us an overview of how well AT-1501 is performing in this population. So we will be able to look at the comprehensive set of the data even though they are separate studies.

Thanks for that information. I have a quick follow-up question. You mentioned that the dosing is similar. Can you provide some insight into your interaction with the FDA and their perspective on the islet cell program? Any additional details would be appreciated. Thank you.

What do you mean by that question?

Sorry. More like, you mentioned that it's kind of the clinical trial path in the US is kind of still experimental. I was wondering if perhaps the FDA had changes in thinking or something kind of in that line or so as such.

Yes, this pertains to the procedure itself, and the purification of the cells is regarded as experimental in the US. Consequently, the FDA has adopted a different stance compared to some other regulatory bodies globally. This issue is not unique to our drug but is more related to the procedure itself. Regarding AT-1501, we are implementing the same dosing regimen and schedule in both Canada and the US. In Canada, the schedule and dosage align with what we are using for kidney transplantation as well as islet cell transplant.

Thank you. Our next question is coming from Rami Katkhuda from LifeSci Capital. Your line is now live.

Hi guys. Thanks for taking my questions as well. I guess first, can you walk us through how you're thinking about dosing of AT-1501 in the IgA nephropathy trial compared to studies in ALS or transplantation? And then secondly, is there a potential for the FDA to consider AlloSure and iBox's approvable endpoints in future renal transplant studies, or has there been no indication of that?

Thank you for the question, Rami. I can address both of your inquiries. Regarding your second question about the FDA's guidance on the use of other endpoints, the current recommendation from the agency is to focus on non-inferiority in terms of biopsy-proven rejection. It remains uncertain if other endpoints will be accepted in the future, but for now, we are considering this as the primary endpoint. However, we can utilize novel biomarkers and algorithms from an exploratory perspective to gain more insights into our asset and potentially better predict its performance compared to standard care. As for dosing in IgAN, we have not disclosed specific details yet. Generally speaking, the dosage will be slightly higher, similar to the range used in ALS studies, which is still lower than what is applied in transplantation.

Got it. I’ll pass the floor. Thank you.

Thank you. We reached the end of our question-and-answer session. I'd like to turn the floor back over to management for any further or closing comments.

Thank you very much everyone for joining us today, and we look forward to talking to you in the future as we continue to make progress as a company and with AT-1501.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.