Good afternoon, ladies and gentlemen and welcome to Eledon Pharmaceuticals first quarter 2023 earnings conference call. At this time, all lines are listen-only mode. This call is being recorded on Thursday, May 11, 2023. I would now like to turn the conference over to your host, Paul Little, CFO. Please go ahead.

Good afternoon, everyone, and thank you for joining Eledon's first quarter 2023 operating and financial results conference call. I am joined today on today's call by David-Alexandre Gros, Chief Executive Officer, and Steve Perrin, our President and Chief Scientific Officer. Jeff Bornstein, our Chief Medical Officer, is traveling today. Earlier today, Eledon issued a press release announcing financial results for the first quarter ended March 31, 2023. You may access the release under the Investors tab on our company's website at eledon.com. 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 US Securities and Exchange Commission. Now it is my pleasure to pass the call to our CEO, Dr. David-Alexandre Gros.

Thank you, Paul, and thank you all for joining us today. We began the year by announcing our primary organizational focus on our kidney transplantation program, and have since directed our resources and efforts to advance this program forward. We believe that Tegoprubart, our anti-CD40 ligand antibody, can address a significant unmet need in patients undergoing kidney transplants through its potential to prevent rejection, maintain high graft function, and reduce the many toxicities associated with calcineurin inhibitors or CNIs. We believe there is a profound urgency for new treatment options to benefit patients receiving solid organ transplants and kidneys in particular. According to the United Network for Organ Sharing, there are now over 25,000 annual kidney transplants in the US, the most in history, and yet the standard of care first-line chronic immunosuppression for this growing market has not changed since the approval of tacrolimus in 1994. Our goal is for Tegoprubart to ultimately replace tacrolimus as the standard of care post-transplant immunomodulator, significantly reducing the broad number of side effects associated with that drug and thus improving graft function and survival. This in turn should result in fewer patients requiring repeat transplants, thereby freeing more kidneys to be allocated to first-time recipients and thus allowing more people to receive the kidneys that they need to live. At the end of March, we presented open-label data from our ongoing Phase 1b trial, evaluating Tegoprubart in kidney transplantation at the World Congress of Nephrology. Our initial three participants did not show any evidence of acute rejection at measured time points, which is important since most rejection in the first year occurs within the first 90 days post-transplant. In addition, we observed strong graft function in our participants with mean eGFRs above 70 at measured time points as far out as week 31. These results were highly encouraging and suggest early clinical proof of concept for Tegoprubart in this indication. And we look forward to reporting updated data from this study at a medical meeting in the latter part of the year. In addition to the clinical progress we made this year, we also strengthened our balance sheet through the execution of a private placement financing of up to $185 million, including $35 million upfront. Subject to achievement of our milestones, this financing will enable us to execute our kidney transplant clinical development plan, including our Phase 2 BESTOW trial in kidney transplantation. We were particularly proud to have this financing co-led by one of our historical investors, BVF Partners, as well as by new investor, Armistice Capital. Of note, Sanofi, the global pharmaceutical company, also participated in the financing, as did a number of private individuals and families that believe in Eledon's mission and have done so and invested in our company since our early days. With the financing completed, we are now laser-focused on execution. We continue to enroll our Phase 1b trial, in which we have now enrolled six participants and expect to initiate our Phase 2 BESTOW trial midyear. With that, I would now like to hand over the call to Steve Perrin, our President and Chief Scientific Officer, to provide more details on our development programs.

Thank you, DA. I'd like to begin by touching upon the opportunity we see in kidney transplantation and why we made the decision to focus our resources on the development of Tegoprubart for this indication. Kidney transplantation is a growing space that has had limited innovation in decades. The National Kidney Foundation estimates that 660,000 people live with kidney failure in the United States. And out of those, over 100,000 people are on the kidney transplant waiting list, with about 5,000 individuals dying annually while waiting for a transplant. Since the average deceased donor transplanted kidney only functions for an average of 10 to 12 years, and the mean age of transplantation is 50 years, most patients will require multiple kidney transplants if they are to live a normal lifespan. Therefore, the need has never been greater to pursue a new treatment option that can prolong the functional life of a transplanted kidney. That is our goal. And we believe this can be achieved with Tegoprubart, allowing transplanted kidneys to last the duration of recipients' lives and thereby freeing a precious kidney so that a greater percentage of patients on the waiting list can receive a kidney. As DA mentioned, we reported open-label data from our ongoing Phase 1b kidney transplant study at the World Congress of Nephrology in March. At the time of data submission, three patients had been enrolled in the trial, which has sites enrolling in Canada, Australia, and the UK. To evaluate signals of clinical efficacy, we reported the estimated glomerular filtration rate, or eGFR, of each patient at specified time points. From large retrospective studies conducted in transplant recipients taking CNIs, we know that a 50th percentile eGFR falls around 50 during the first year post-transplant. Twelve-month eGFR has been shown to be the most significant single predictor of future graft failure, and as eGFR values decrease, the risk of graft failure and hospitalization increases exponentially. Importantly, studies have shown that the 12-month eGFR is correlated with eGFR value seen as early as 90 days. Thus, we believe that the eGFR data we shared at 90 days is highly relevant and potentially predictive in determining graft function and outcome. At the time of our data submission for the conference, we had three subjects enrolled in the trial. Results from the first three participants demonstrated no incidence of acute rejection at 56, 167, and 232 days, respectively. Graft function was very good in all three participants with the participants having eGFR as 54, 85, and 77 at the latest available time point of 49, 154, and 217 days, respectively. Given the correlation between eGFR levels at 90 days and 12 months, we feel encouraged by these early results and their potential to translate into longer-term graft functionality. Long-term graft function is critical, but not the only part of meaningful outcomes we are looking for in kidney transplant recipients. The current standard of care, calcineurin inhibitors, helps preserve graft survival, but they are also associated with significant side effects such as hypertension, dyslipidemia, nuances of diabetes, and tremors. Moreover, research shows that 10 years post-transplant, almost all transplanted kidneys will demonstrate evidence of CNI-induced nephrotoxicity. We believe based on the evidence generated to date that Tegoprubart has the potential to reduce or even potentially eliminate these side effects while also providing improved graft function. Turning to the safety results we observed in the study, among the three participants, Tegoprubart showed good tolerability, especially among a difficult-to-treat population. None of the participants experienced acute rejection, and there was no evidence of new onset diabetes after transplant or any impact on glucose levels in the two participants without diabetes at baseline. One participant was discontinued from the study on day 55 after developing BK viremia, a common occurrence following a kidney transplant that occurs in 20% or more of transplant recipients. An additional participant elected to discontinue from the study after 33 weeks reporting mild alopecia and mild insomnia, which the investigator did not attribute to Tegoprubart. The adverse events continued once the patient was switched from Tegoprubart to CNIs. We continue to make progress with this ongoing trial and have since enrolled an additional two participants who both remain on study. We expect to report updated data at a medical conference later this year. Building off our results from the ongoing Phase 1b trial, we remain on track to initiate our randomized open-label Phase 2 BESTOW study to assess the safety and efficacy of Tegoprubart compared to tacrolimus and the preservation of allograft function after kidney transplantation. 120 participants will be randomized one-to-one to receive either Tegoprubart every 21 days or twice-daily oral tacrolimus. The primary endpoint will compare the mean eGFR at 12 months for participants receiving Tegoprubart versus tacrolimus. Secondary objectives will include safety and tolerability, participant graft survival, biopsy-proven acute rejection, and the incidence of new onset diabetes mellitus after transplant. I'd like to conclude by briefly covering our IgAN program. Following our announcement to deprioritize the program at the beginning of the year, we continue to collect safety data from patients previously enrolled to provide additional insight into Tegoprubart's safety profile. The data we presented at WCN from 16 patients in the high dose cohort of 10 mg per kg every three weeks showed Tegoprubart to be safe and well-tolerated with no serious or severe adverse events reported and no early discontinuations. Four participants had completed at least 24 weeks on treatment and five others completed at least 12 weeks. We are encouraged by the safety profile Tegoprubart continues to display, and to date, we have now dosed approximately 100 human subjects across multiple disease indications. Given the deprioritization of the IgAN program, and having now generated key safety insights in this population, we are now winding down all IgAN study activities at our sites, and we anticipate winding down the vast majority of our IgAN activity and spending in the second quarter of 2023. With that, I'd now like to turn the call over to Paul for the financial update.

Thank you, Steve. The company reported a net loss of $10.8 million or $0.75 per share for the three months ended March 31, 2023, compared to a net loss of $9.9 million or $0.69 per share for the same period in 2022. Research and development expenses were $8.1 million for the three months ended March 31, 2023, compared to $6.6 million for the comparable period in 2022, an increase of $1.5 million. The increase is primarily due to higher clinical development expenses, primarily with external CROs of $2.1 million and an increase in personnel costs due to increased headcount. The increase was partially offset by decreases in stock-based compensation, manufacturing, and consulting expenses. General and administrative expenses were $3 million for the three months ended March 31, 2023, compared to $3.2 million for the comparable period in 2022, a decrease of $200,000. The decrease was primarily related to lower stock-based compensation costs. Earlier this month, we announced the entry into a definitive securities purchase agreement with select healthcare investors that will provide up to $185 million in gross proceeds through a private placement. The purchase agreement included an initial upfront financing of $35 million, an additional aggregate financing of up to $105 million, subject to achieving clinical development milestones, volume-weighted share price levels, and trading volume conditions, plus up to $45 million upon the full exercise of warrants being issued in connection with the agreement. The financing was led by BVF Partners and Armistice Capital and includes participation from new and existing investors, including the global pharmaceutical company Sanofi. Eledon ended the first quarter with approximately $46.5 million in cash and cash equivalents. With that financial update, I'll turn the call back over to DA.

Thanks, Paul. I am proud of the progress that Eledon has made in the early part of 2023 and feel we are now well-positioned to make significant strides in our evaluation of Tegoprubart as a potential much-needed replacement for CNIs in kidney transplantation. We are highly encouraged by the data generated to date in our ongoing Phase 1b study and look forward to both its continued enrollment and to providing a clinical update later in the year. Finally, following our financing, we now have a well-capitalized path to launch and execute our Phase 2 BESTOW trial while we continue to report data from the open-label Phase 1b study in parallel. Operator, please begin the Q&A session.

Thank you. Pete Stavropoulos, Cantor Fitzgerald.

Hi, DA, Steven, and Paul. I want to congratulate you on your successful financing and am happy to see that the Tego kidney transplant program is moving forward. One of your investors stood out at me when I saw the press release for the financing, which was Sanofi. It's a well-established company that has a well-established kidney transplant franchise, so well-versed in the space. Can you provide any color on those interactions? What do you think drew this company to invest in this molecule and program? Do you think it was the totality of the data generated with Tego to date across all programs? Or was it kidney-specific data?

Hey, Pete. Thanks for the question. In terms of Sanofi, we obviously appreciate having them as a new investor. As you mentioned, they know the space quite well. They've also said in the past that in terms of the way they viewed their interactions for their development in the space, they were not looking at kidney transplantation. I think they looked at us and saw a good investment opportunity. This was an investment that came through in the same way as other investors. So Sanofi did not get any type of rights beyond or in any way different from what other investors received in this financing.

All right. Thank you. So I have a couple of questions on the BESTOW study. In the data presented for Tego at the Kidney Transplantation World Congress of Nephrology, there was one patient who had BK viremia. Can you sort of touch on how common BK viremia is in kidney transplant? And how is it going to be handled in the BESTOW study? Will it be up to the investigator to withdraw the patient from the study? Or will there be some type of protocol in place?

Thanks for the question, Pete. Steve, I'll turn that over to you.

BK viremia is quite common, especially with the polypharmacy used to prevent transplant rejection, affecting 10% to 20% of patients studied. The occurrence varies by site and country, as well as by treatment regimen. The typical approach to managing BK viremia involves reducing the immunosuppressant drugs necessary for preventing rejection, based on the viral load and at the investigator's discretion. There is a careful balance between allowing the transplanted individual's immune system to combat the viral load while protecting the organ from rejection. Ultimately, it's up to the investigator at each site to determine the management strategy.

Okay. I mean, I don't know if you've disclosed, but is there opportunity to sort of wean off of Tego and then sort of put it back on as time progresses?

So being an antibody, typically the administration, as you know, is every three weeks. If somebody's viral load creeps up shortly after dosing, the investigator has a period of time where they could try to manage other immunosuppressants to see if they can manage viral load and get it back down prior to the next infusion. There is some flexibility if you wanted to delay the next infusion of Tegoprubart a little bit. But as we know with biologics, you don't want to pause an infusion for too long due to the increased risk of anti-drug antibody responses. Again, we'd be in close dialogue with PIs if that's the route that they chose to take and we would give them guidance based on what we know from our preclinical and clinical data to date on how to manage that.

Great. Thank you for that. Another question again on the BESTOW study. One of the goals will be to reduce steroid use. And there will be steroid tapering from my understanding until they're completely removed from each of the patients' treatment regimens. Can you just talk a bit about the clinical benefit? It may be still on these patients, tapering them off? And how do you plan to capture that benefit?

DA, do you want me to take that one?

Sure.

The primary difference between our Phase 1b study and the Phase 2 BESTOW study is that in the BESTOW study, participants will start reducing their steroid use fairly quickly after the transplant, aiming to be completely off steroids by six months. This is a common practice in many places worldwide where a complete tapering of steroids is performed. The main advantage for patients is that the side effects of steroids can be significant, so it is crucial to minimize the number of immunosuppressant drugs they are on. We believe this presents a significant opportunity, and we are confident that we can successfully wean patients off steroids within a six-month timeframe.

People don't like to be on steroids — it's DA. They have impacts in terms of blood sugar control, moods, ability to sleep, and potential hair loss. So, removing — if we're able to allow people to taper completely off steroids, that would be another win on top of removing the CNIs for patients.

In terms of the clinical study, any secondary or exploratory endpoints that you're going to use to sort of capture that benefit?

I'm sorry.

No, no, go. You can go.

I don't think there, Pete, there's any exploratory endpoints that specifically deal with the tapering of steroids. But obviously to be captured as part of the safety profile of Tego, much like in our other studies.

Okay. Thank you very much.

We're going to look at removing steroids from both arms. So it would be comparative. But in terms of the steroid-specific side effects, one would see the benefits if one compared the data to historicals.

All right. Thank you very much. And again, congratulations on the financing and all the progress.

Thank you, Pete.

Hey, guys, good afternoon. Thanks for taking the questions and congrats on all the progress. A couple of questions on our end. I guess first on the Phase 1b study, you mentioned that you've enrolled six patients to date and you're targeting a medical meeting later this year for an update. So, if you can elaborate on some of the venues you're considering and just walk through sort of your expectations in terms of how many patients an amount of follow-up you think you could have by then?

Thanks, Tom. It's DA. So we'll look for a medical meeting towards the end of the year. There are a number of kidney meetings for this including Kidney Week, where we might be able to present. Since we already have six patients as we just mentioned, even without counting potential new patients that come into the study, that would mean that all of the patients would have over 90 days on drug by that point. So we would go from somewhere in the 90-day timeframe all the way out to a year or so.

Okay. Got it. That makes sense. And then, maybe just following up on the Sanofi investment. I understand they are pursuing solid organ transplant at this point for their CD40 ligand for ALS, but maybe if you could just remind us of the differences between Tego and their program? And then just on thinking a little bit bigger picture, wondering if you could comment on sort of the broader strategic interest in the space and how you're thinking about partnership or other business development opportunities at this point?

Sure. So the two molecules are both anti-CD40 ligands. We're using a full antibody approach. If you looked at the broader competitive landscape, the two that are the most similar. The difference has been around strategy and where we've chosen to focus. We've now chosen to focus on transplant. Sanofi's focus has been on larger population indications, including ALS, MS, and they've discussed rheumatoid arthritis before. So that is the difference in terms of the approach that we're taking.

Yes, that's helpful. I was just wondering if you could comment on sort of the broader strategic interest in the space and how you're thinking about business development and partnership opportunities at this point?

Yes. So in terms of broad interest in the space, there are a lot of companies that are interested in the broader immunology space. It's become one of the key areas of focus for both smaller biotechs as well as large pharma. From our perspective today in terms of business development, we are not looking to in-license. That wasn't one of the reasons why we did the deal. We now have the capital we need if we hit our milestones to be able to take this drug and develop it all the way through to getting Phase 2 data and beyond. So that's very much what we are going to be focused on, which is executing our trials and continuing to generate data with Tegoprubart.

Got it. That makes sense to me. All right, guys. I appreciate you taking the questions and congrats again on the progress.

Thank you. Appreciate it, Tom.

Thank you, Tom.

Thanks for taking my questions as well. And congrats on the update. A couple of quick ones from me. I guess first up, are you guys using the iBox scoring system in the BESTOW study?

Yes, that's being evaluated as an exploratory endpoint. We're obviously really excited that the agencies are starting to look at alternative endpoints like iBox, which can be really transformational as far as helping to assess early-stage clinical trial development and the ability to estimate long-term graft function and survival.

And Rami, maybe just to add to what Steve said, we're doing it as part of our collaboration with CareDx. If you remember, we announced a collaboration with CareDx, and that covers a number of biomarkers and algorithms including iBox.

Got it. Makes sense. And then going off a previous question, with recent regulatory successes in the ALS field, can you touch upon potential routes to make continued development of Tegoprubart in that indication?

So right now, this financing is going to allow us to advance Tegoprubart in transplantation. That's what we are primarily focusing on. We'll continue to look for other ways to potentially finance Tegoprubart in ALS as we've said before. We believe in order to advance Tegoprubart in ALS, what we would like to do is trial that would be well designed and have the best possible chance of success to do a smaller trial, potentially one that would require less money. We don't think would help fundamentally answer the question of whether Tegoprubart would work in ALS, and as such, wouldn't be the best solution for patients and for the field. So we're focused on transplant. We'll continue to look at ways to advance Tegoprubart in ALS, and then if we do so, we do it in a way to have a trial that would be substantially set to truly be able to answer the question of how well Tegoprubart is working in that indication.

Got it. Thanks so much.

Hi, DA, Steve, and Paul. Good afternoon and thanks for taking my questions. Congrats on bolstering the balance sheet. And I appreciate the presentation on the kidney transplant. This question is less more to do with that data — and apologize for the music. Hopefully you can hear me well enough. Perhaps what to do with Tegoprubart in IgAN, given what you see as side effects, biomarkers that are looked at, and perhaps endpoints you're considering for, again, less severe than a kidney transplant, but perhaps a future study with — in IgAN. Is there anything that is informing you that targeting anti-CD40 ligand as a strategy to potentially replace calcineurin inhibitors is effective? Because as you know, with the calcineurin inhibitors, you've seen that as dose goes up, so do side effects and so does efficacy. Except for perhaps a bit of an exception that we've seen but not performed. Just wondering if anything there you're seeing so far? And I know that the number of patients has been low so far. So you don't have a concrete idea about how to answer this question. Just wondering if there's something you're seeing now that's perhaps informing you of a future study and whether targeting anti-CD40 ligand is churning out as you expect. Sorry for the long preamble.

Vernon, thank you for the question. Steve, I'll turn that over to you to talk about what we're seeing or what we've seen in terms of biomarkers as well as how you interpret the data that we've generated to date with regard to Tegoprubart's efficacy.

Sure, DA. Great question, Vernon. Thank you for that question. We've actually gleaned an amazing amount of data from very diverse indications to date in a very short period of time as you know. We demonstrated very robust target engagement in our ALS study showing that we knock down both T and B cell markers of target engagement in a very dose-proportional way. That translated into functional decreases in over 20 pro-inflammatory markers that sit downstream of co-stimulatory signaling. We have very good functional data showing that Tegoprubart modulated the immune system in that study in a very rapid way after the first infusion, which was quite exciting. Globally across all of our indications, the safety profile of Tegoprubart continues to look very exciting and very encouraging. We haven't seen any serious adverse events in any of our studies. These are patient populations that you just suggested, those patients in transplant and ALS are very sick, and yet the drug has shown a very good safety profile at this point and very predictable pharmacokinetics as well. This opens up an opportunity when you summarize all of that data in total. We have hypothesized in general going back over 30 years of data, that blocking this pathway really has an opportunity in multiple autoimmune indications as well as in the transplant indications that we're pursuing.

Do you plan to present any outcome, even if it's preclinical data, that continues to validate the approach?

I mean in the preclinical side, we have multiple collaborations with both allograft transplant experiments as well as in the xeno transplant space. We have a collaboration with eGenesis that's ongoing. We anticipate that as we continue to execute on those primate studies, both on allograft and xenograft that we will present them at some point at scientific conferences.

Perfect. I'm glad to see we have a bolstered balance sheet and look forward to more data. Thanks again for taking my questions.

Thanks, Vernon.

Well, hi, this is Raymond in for Matt. Thanks for taking my question and congrats on all the progress. I guess the question I was thinking — I was reading this recent New York Times article about transplantation, very compelling. I was wondering, how are doctors and patients responding to the initial data in your renal transplantation program? Is that potentially building more awareness for your Phase 2 trial? I have another question.

Thank you. That is a wonderful opinion piece that was published in the New York Times, and I encourage really everyone on the call if you haven't had a chance to read it to do so. Steve, let me turn it over to you in terms of awareness, the need, and the receptivity that physicians that you've been talking to have had to our data.

Yes, sure. Thanks, DA. A great question, I agree. The receptivity has been absolutely amazing. I mean, there's a long history, as we know, of blocking this pathway going back 25 to 30 years with many different antibodies in preclinical models in particular. But the field was set back in the early 2000s with the first-generation antibodies. Yet to this day, blocking this pathway and blocking CD40 ligand in particular has been the most potent way to prevent transplant rejection. It was also a very, very potent strategy to ameliorate autoimmune diseases in multiple different models. Tegoprubart, the second-generation antibody that we have clinical data for, has generated an incredible amount of excitement as we've reached out to potential sites for the BESTOW study and done feasibility. The PIs have been very impressed with the eGFR data that we have to date, albeit on a handful of patients. However, folks have been very excited because of the opportunity to reengage this pathway after so many years.

Yes, that's great. Thanks for all that color. I guess just one other question. It might be too early to say, but the kind of impressive data you had so far and thinking about the BESTOW trial, the magnitude and duration of any potential eGFR benefit over tacrolimus might dictate the path forward now clinically or regulatory?

Yes. We would want to show a — we're looking at eGFR, and this is a superiority study. We want to see a statistically superior Delta in terms of eGFR versus the standard of care. The larger that delta, the better. I would note that even small deltas in eGFR can make a difference clinically. For instance, we know that as early as six months, if you have a 10-point delta in eGFR, it means an 11% delta in the chance of a patient being favored for post-transplant hospitalizations. Similarly, the lower the eGFR, the more likely patients are to be hospitalized multiple times. Also, eGFR is associated with the risk of graft failure. The lower the eGFR, the higher the risk of that kidney being lost. That graph, that increase is almost exponential, pretty much exponential. If you have an eGFR that goes below 50 or 55, which is the mean eGFR in the year post-transplant. If we could move the needle in those patients even by only 10 points, that would be very meaningful since you're looking at an exponential increase in terms of risk.

Yes, I agree. Even small differences in eGFR based on very large retrospective studies can significantly impact our long-term graft function and survival. So, even smaller differences will be very critical.

Thanks for that. Congrats on all the progress.

Thank you.

And there are no further questions at this time. I will turn the call back over to Mr. Gros for closing remarks.

Thank you for your assistance, operator. And thank you all for joining us today on this call. Have a great evening.

Ladies and gentlemen, this concludes your conference call for today. We thank you for joining, and you may now disconnect your lines.