Prothena Corp Public Ltd Co Q4 FY2021 Earnings Call

Ladies and gentlemen, thank you for standing by and welcome to Prothena's Fourth Quarter Full Year 2021 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. Jennifer Zibuda you may begin your conference.

Thank you operator. Good afternoon, everyone, and welcome to Prothena's investor conference call to review our business progress, our fourth quarter and full year 2021 financial results, and review the press release we issued earlier today, which is available on our website at prothena.com and is also attached to a Form 8-K filed today with the SEC. On today's call, Dr. Gene Kinney, our President and Chief Executive Officer will highlight Prothena's progress across our portfolio in 2021, as well as our organizational evolution as we continue advancing towards becoming a fully integrated biotechnology company. Following Gene's comments, Tran Nguyen, our Chief Financial Officer and Chief Strategy Officer will review our financial results and performance for the fourth quarter and full year of 2021 and will provide our 2022 financial guidance before turning it back to Gene for closing remarks. We will then open the call for Q&A and be joined by Dr. Hideki Garren, our Chief Medical Officer; and Dr. Wagner Zago, our Chief Scientific Officer. Before we begin, I would like to remind you that during today's presentation we will be making forward-looking statements that are subject to certain risks, uncertainties, and other factors that could cause actual results to differ materially from those referred to in any forward-looking statements. For a discussion of the risks and uncertainties associated with our forward-looking statements, please see our press release issued today as well as our most recent filings with the SEC. We disclaim any obligation to update our forward-looking statements. And with that, I'd like to turn the call over to Gene.

Thank you, Jen, and thank you all for joining us to review our 2021 financial results and business highlights. 2021 was a productive year for Prothena, marked by meaningful progress in our R&D portfolio, which represents the culmination of multiyear efforts. We're hopeful that these efforts will soon lead to impactful treatments for the millions of patients and families who are affected by diseases caused by misfolded proteins. In 2021, we also continued to attract and retain highly talented professionals with excellent track records to support our transition towards becoming a fully integrated biotechnology company. Additionally, we ended the year with a strong cash position, which included $200 million in partner payments from our collaborations with leading pharmaceutical organizations including Bristol Myers Squibb, Novo Nordisk, and Roche. These collaborations are part of an intentional mix of wholly-owned and partnered assets, allowing us to have a broad pipeline with blockbuster potential further supporting our growth as a company. Prothena is driven by our mission to make a real impact for the patients and families we serve. That mission is enabled by our deep scientific expertise in protein dysregulation, which serves as a unifying thread between our business strategy, our portfolio development, and the dedication that propels our team every day. We believe that our focus on slowing, stopping, and treating neurodegenerative and rare peripheral amyloid diseases addresses significant unmet medical needs where our biology-directed engine, our clinical expertise, and our market positioning will enable us to advance best-in-class therapies that have the potential to transform the lives of patients. Our focus on neurodegenerative diseases includes Alzheimer's and Parkinson's, which sadly are growing exponentially. Combined, these two diseases affect an estimated 60 million people globally today. The significant burden is not only experienced by patients but also by caregivers and the overall healthcare system. In rare peripheral amyloid diseases, birtamimab and PRX004 are being developed in targeted patient populations at high risk for early mortality, which underscores our strategy to develop therapies for patients with an urgent need for improved survival. Since our inception, our core guiding principle has been to follow the science empirically and without bias. This rigorous approach to the advancement of medicine allows us to discover underlying pathophysiological processes and design molecules that optimally target pathogenic proteins and consequently have the greatest probability to slow or prevent disease. Over the years, we have refined our approach to include what we believe is an unparalleled knowledge of disease pathology and expertise in empirical epitope mapping, advancing only those molecules that show a robust and consistent biological effect in the reduction of disease. Using our unique biology-directed engine, which leverages our deep know-how, today we've been able to advance three programs into mid to late clinical stages and six discovery candidates toward the clinic, with five potential new INDs projected by 2026. Prothena's understanding of protein dysregulation is based on many decades of scientific discoveries in the field. Much of our team, including Wagner, our Chief Scientific Officer who's on the call today, have contributed key scientific and clinical discoveries in our field and have built a scientific heritage within Prothena that allows for an informed approach for the development of potentially best-in-class therapeutic candidates. Last year, we continued to add to this deep scientific heritage with the addition of key personnel such as Hideki, our Chief Medical Officer, who is also present on our call today. Before we dive into the progress we made this year, I wanted to take a moment to highlight the breakthroughs that we as a field have made in advancing treatments for Alzheimer's disease. 2021 was a milestone year for the Alzheimer's community. Notable developments included the FDA's accelerated approval of the first disease-modifying therapy, significant advancements in clinical study design including optimized patient selection strategies, advancements in the use of biomarkers including blood-based biomarkers, increased prominence of iADRS as a clinical outcome measure and a growing amount of evidence generated across multiple clinical data sets confirming the benefit of anti-beta therapies that interact with the immunoterminus of that target. This progress stands on the shoulders of many great scientists including Prothena's late co-founder Dr. Dale Schenk and multiple Prothena scientists, who carefully observed and followed the iterative scientific and clinical trial design learnings to bring forth this new class of therapy to patients with Alzheimer's disease. At Prothena, we have celebrated these advancements but also believe that further improvement is needed. This is why we are advancing what we believe is one of the most comprehensive therapeutic strategies to treat Alzheimer's disease. We have developed three product candidates targeting key pathological pathways of the disease cascade, which expands from next-generation potentially disease-modifying treatments to potential combination and prevention strategies. Our portfolio takes advantage of the scientific and clinical trial design advances, and positions Prothena as a leader in the transformation of Alzheimer's therapeutic approaches. With that, let me now focus on highlighting some of the progress made across the portfolio in 2021. I'll start with PRX012, a potential best-in-class, patient-friendly, subcutaneous delivery treatment for Alzheimer's disease targeting a key epitope of the immunoterminus of amyloid beta with high binding potency. To date, preclinical data have shown that PRX012 binds to amyloid plaques with high avidity, consistent with the potential for more effective Abeta plaque clearance at substantially lower doses than approved anti-Abeta therapy. New preclinical data presented at the Alzheimer's Association International Conference or AAIC this past summer demonstrated that PRX012 significantly cleared both pyroglutamate modified and unmodified Abeta plaque in brain tissue at concentrations that are expected to be reached in the CNS with subcutaneous administration on a convenient treatment schedule. We believe that PRX012 has the potential to transform the field of Alzheimer's disease. Our goal with PRX012 is to offer greater patient accessibility and compliance relative to the approved therapy and other immunoterminus-targeted treatments currently under development. Compared to first-generation treatments, subcutaneous PRX012 is also expected to result in smaller fluctuations in brain antibody concentration. This feature may allow us to differentiate on both efficacy and safety endpoints. Because of its high binding potency and suitability for subcutaneous administration, PRX012 has the potential to serve as a foundational anti-Abeta treatment for patients with Alzheimer's disease. We intend to fully leverage the learnings from upcoming clinical regulatory and commercial milestones from other first-generation anti-Abeta therapies to maximize the probability of success for our PRX012 program. In 2021, we also brought our tau-targeting monoclonal antibody PRX005 into the clinic. PRX005 is designed to be a best-in-class anti-tau antibody by specifically targeting an epitope within the microtubule binding region or MTBR. Tau tangles, along with amyloid beta plaques, are pathological hallmarks of Alzheimer's disease. Research indicates that tau pathology is related to the clinical and cognitive decline associated with the disease. By leveraging our unbiased biology-directed engine, we found that targeting specific regions within the MTBR resulted in a more consistent and robust reduction in the pathogenic uptake of tau into neurons and the downstream neurotoxic effects. At the 15th International Conference on Alzheimer's and Parkinson's Diseases, or AD/PD, in March of last year, we presented new preclinical data showcasing PRX005's ability to reduce tau pathology and downstream behavioral deficits in multiple in vitro and preclinical in vivo models. PRX005 is one of the three programs being developed in partnership with our colleagues at Bristol-Myers Squibb and for which we received an $80 million option payment in 2021. We also advanced a third Alzheimer's program, our dual Abeta tau vaccine from discovery to preclinical development in 2021. For the first time, we presented data at AAIC on our dual Abeta tau active vaccine. This vaccine is a multi-epitope single-agent vaccine designed to target the two key pathologies associated with Alzheimer's disease, amyloid beta and tau. Our data showed that vaccination of mice, guinea pigs, and non-human primates generated a robust and balanced immune response to the intended epitopes on amyloid beta and tau without a cytotoxic T cell response to these endogenous proteins. Importantly, the result in antibody response to these vaccines have the appropriate impact in functional studies, promoting both phagocytosis of Abeta plaque and blockade of tau transmission in vitro. Our vaccine offers the exciting possibility to combine amyloid beta and tau targeting into a single construct, potentially aligning with the prevention strategy. Turning to prasinezumab, in Parkinson's disease, Roche our partner for prasinezumab, presented data at AD/PD in March of last year. New analyses from Part 1 of the Phase 2 PASADENA study highlighted prasinezumab's greater effect of slowing clinical decline in subgroups of patients that exhibited more rapid disease progression. These data, when combined with previously discussed data sets from the study, further add to the idea that selective targeting of alpha-synuclein at a key region within the C terminus may provide a disease-modifying impact in patients with early Parkinson's disease. In May of last year, the first patient was dosed in the Phase 2b PADOVA study, for which we received a $60 million milestone payment. The study is currently being conducted by Roche. In addition to our progress in neurodegeneration, we also made significant advancements in our rare peripheral amyloid disease portfolio. 2021 was an important year for our birtamimab program. In February last year, we announced that we had reached an agreement with the FDA under a special protocol assessment, or SPA agreement, which allowed for the initiation of our confirmatory Phase 3 AFFIRM-AL study, where the prespecified alpha for study success was defined as 0.1. The SPA agreement followed multiple discussions with the FDA Division of Cardiology and Nephrology and AL amyloidosis expert physicians on the overall safety of birtamimab and previously observed survival benefit in patients with Mayo Stage IV AL amyloidosis in the VITAL study. We initiated our global registrational AFFIRM-AL study last year and are currently enrolling patients. Current treatments for AL amyloidosis target a clonal plasma cell that overproduces light chain. While these therapies can reduce new protein production, they fail to directly address the amyloid that has already deposited and is causing organ toxicity. Birtamimab is differentiated, as it's believed to remove the amyloid most proximally associated with organ dysfunction. We have extensively published on birtamimab's well-defined epitope and depleter mechanism of action, which we believe provides for broad recognition of different types of light chain proteins that may be present in the organs of patients with this disease. Moving now from AL amyloidosis to ATTR amyloidosis. Following the completion of our Phase 1 study, we are working diligently to move forward for cardiovascular diseases to advance this promising treatment to patients on an expedited timeline. As part of this agreement, Prothena is eligible to receive development and sales milestone payments of up to $1.23 billion, which includes a $60 million upfront payment received last year. Current treatment approaches are focused on the reduction of new transthyretin production or the stabilization of the normal homotetrameric form of this protein. PRX004 is a differentiated approach with a depleter mechanism of action that is designed to target and remove the resident protein. Moreover, PRX004 targets a key region of transthyretin that is not available in the normal homotetrameric structure and as such, uniquely interacts with only nonfunctional forms of this protein. In addition to our portfolio accomplishments, we've also made significant organizational progress this last year, as we continue to build an industry-leading fully integrated company. We strengthened our management team and Board of Directors to best position Prothena for long-term growth and success. Starting with our Board of Directors, in May, we appointed to our Board, Dr. Sanjiv Patel, CEO of Relay Therapeutics and an established leader with significant industry experience. In April, we appointed Dr. Hideki Garren as our Chief Medical Officer. Hideki has extensive expertise and a successful track record of advancing neurological and rare disease programs from late-phase development registration and launch. In October, our CFO, Tran Nguyen was appointed to the additional and newly created role of Chief Strategy Officer and Brandon Smith was promoted from Chief Business Officer to Chief Operating Officer. These expanded roles support our continued transition to a fully integrated biotechnology company focused on neurodegenerative and rare peripheral amyloid diseases. This is an exciting time for Prothena. We are encouraged by the significant progress we have made over the past year. And we are looking towards our future. At this time, I'd like to turn the call over to Tran for a discussion of our 2021 financial performance and our 2022 financial guidance.

Thanks Gene, and good afternoon, everyone. Today we reported results that were either in line with or favorably exceeded our 2021 financial guidance. Please refer to our press release for a detailed breakdown of our financial results. As Gene mentioned during his opening remarks, last year we strengthened our capital position. First, with our strong collaboration where we received $200 million in payments from our strategic partners in 2021, which includes an $80 million option payment from BMS for the U.S. rights of PRX005, a $60 million upfront payment from Novo Nordisk for the acquisition of our ATTR amyloidosis business, and a $60 million payment from Roche for the advancement of prasinezumab into the Phase 2b PADOVA study. Additionally, during the year we received net proceeds of $175 million raised through equity offerings. In terms of our 2021 financial performance relative to guidance we had net cash provided by operating and investing activities of $92 million which was in line with our guidance of $85 million to $95 million. Cash, cash equivalents, and restricted cash were in line and at the top of the range of our guidance of $570 million to $580 million. Also, we continue to have a clean capital structure with zero debt. Now turning to our 2022 financial guidance, we expect our full year 2022 net cash used in operating and investing activities to be $120 million to $132 million which includes an expected $40 million clinical milestone payment from Novo related to PRX004. We expect to end the year with approximately $454 million in cash, cash equivalents and restricted cash which represents the midpoint of the range. The estimated full year 2022 net cash used in operating and investing activities is primarily driven by an estimated net loss of $154 million to $170 million which includes an estimated $32 million of noncash share-based compensation expense. With that, I'll turn the call back over to Gene to discuss our upcoming milestones.

Thanks Tran. Before we talk about our 2022 milestones, I want to first acknowledge and thank our extraordinarily talented employees for their ongoing commitment to advancing our protein dysregulation science to make a real impact for the patients and families we serve. It's a privilege to work alongside my colleagues at Prothena and I could not be prouder of their accomplishments. I'd also like to thank the patients, their families, physicians, and study site staff who participate in our studies. Without their support we could not elucidate the potential impact of these new medicines we're developing. Over the past year our team has delivered on multiple milestones, further advancing Prothena as a leader in addressing devastating proteinopathy. As you heard today, our dedication to our mission combined with our differentiated strategy, our diversified portfolio, and our scientific heritage and human talent have made possible multiple meaningful achievements in 2021 and have positioned Prothena well for an exciting year ahead and beyond. As new data becomes available on the clinical regulatory and commercial landscape in the Alzheimer's field, we believe our programs, which have been advanced through our unique and rigorous biology-directed engine and designed to be best-in-class, are positioned to transform the care of patients suffering from this disease. We are on track and expect to submit an IND filing for PRX012, our anti-Abeta product candidate, this quarter. For PRX005, we are expecting top-line Phase I data this year further elucidating the potential of targeting MTBR-tau in treating Alzheimer's. We're looking forward to multiple scientific congress presentations throughout 2022 beginning with preclinical presentations at AD/PD in March highlighting first our new alpha-synuclein vaccine; and second, additional data on our dual Abeta-tau vaccine for which we are planning to submit an IND next year. For prasinezumab, new data will be presented at AD/PD in March and we are expecting data from the Phase IIb PADOVA study in 2024, both of which will be communicated by our partners at Roche. In our rare peripheral amyloid portfolio, we continue to enroll patients in our Phase III AFFIRM-AL study in birtamimab and anticipate top-line data from that study in 2024. Additionally, Novo Nordisk announced plans on their year-end earnings call to initiate a Phase II trial during the first half of this year for PRX004 in patients with ATTR cardiomyopathy. Prothena made excellent progress in 2021. We have a well-balanced portfolio with multiple wholly-owned assets coupled with strong partnerships and collaborations that could allow us to receive up to $365 million in partner payments over the next five years. We expect to make additional progress across our R&D pipeline this year and we look forward to continuing to provide additional portfolio updates when appropriate. With that, we will now open the call up to Q&A. Operator?

Your first question comes from Charles Duncan with Cantor Fitzgerald. Your line is open.

Good morning, Gene and team. Congrats on a great year of progress last year. Hard to compete with that one. But I had a quick question on PRX012 and that is relative to the upcoming IND. It sounds like you're ready for this quarter. I guess I'm wondering when would you anticipate being able to start clinical studies with that? Could that be shortly within the first half of this year? And would that become a partnering candidate anytime soon, or would you be able to take that through, say a clinical proof of concept?

Yes. Thanks, Charles for the question. Maybe I can start and Hideki can comment as well. But first, you're correct on PRX012. We are expecting the IND filing this quarter. Obviously, there's a time that occurs after that filing where we interact with the agency, and we would expect to begin the Phase I clinical trial thereafter. What we're envisioning right now in that Phase I program is a single-dose study and a multiple-dose component of that study. And I think on your other question around partnering, right now we feel that we are in a very good position to develop that molecule. Some of the advances in the Alzheimer's field we think have made it in such a way that we can actually think about proof-of-concept studies in this space for a company the size of Prothena. So we think we're uniquely positioned and well-positioned given our heritage and our expertise and experience in the space to bring this molecule forward on our own and that certainly is our current plan. But maybe Hideki, do you want to speak further to any of the near-term clinical plans with PRX012?

You might be on mute Hideki.

Hi, Gene.

All right. Well, we'll take my answer as full too.

Good. Are you there? There you go. Hi, Hideki. How are you? So yeah, maybe you want to comment further? Yes.

Yes. You can hear me okay?

Yes, we can hear you.

Okay. Great. Thanks. Yes, no you stated it quite well, Gene. As a reminder, PRX012 is our high-potency anti-Abeta compound. And because of its high potency, we are giving it subcutaneously. And so that's why it should have advantages both in terms of safety tolerability as well as convenience for patients. And as Gene stated, we are seeking a single ascending dose study as well as a multiple ascending dose very shortly after the IND is cleared, and we will do those in healthy volunteers and patients.

All of that will culminate in data in 2023.

All right.

Your next question comes from the line of Michael Yee with Jefferies. Your line is open.

Yes. Thanks for the question and congrats on the progress. We had a question around maybe helping Wall Street think about some of the scenarios in 2022 with regards to the fact that perhaps Wall Street seems a bit mixed or skeptical around Alzheimer's, specifically your PRX012, which is just the class. And the idea that what are the scenarios and what are the thoughts around if we have negative results from the industry this year versus positive results and also how that relates to partnering or strategic pharma interest and how much that data plays a role in their thinking about the value of Alzheimer's. Thank you.

Yes, thank you for the question, Mike. There are several significant events we can expect this year. We anticipate receiving a lot of data over the next 18 months. Starting in April, we will have clarity on the final language regarding the NCD determination from CMS. We know what the draft language looks like and we expect to see where that lands in April after a lot of public commentary. We believe that this could influence how Eli Lilly views donanemab in terms of accelerated approval. Our understanding is that they are pursuing a rolling submission due to their breakthrough status, and when they submit the final clinical data, it may shape whether they seek accelerated or full approval. This is something we will monitor this year. Additionally, we expect data from the Phase III trials later this year for both gantenerumab and lecanemab from BAN20401. These molecules are different in terms of how they interact with biology and clinical trial design. Lecanemab targets immunoterminus while gantenerumab has a dual epitope, leading to different biological outcomes and clinical trial specifications. As we move into next year, we will also see data for donanemab, particularly following the Phase II Trailblazer study. For PRX012, there are key factors to consider. From an NPD perspective, the language surrounding the NCD, regardless of its final form, will have the most significant impact on our near-term candidates. Currently, the impact on PRX012 and its clinical development is less direct. As Hideki mentioned, the possibility of subcutaneous administration allows us to consider the early IV drugs potentially being classified under Part B, while PRX012 could be positioned for Part D, which would carry different implications for final coverage. Moreover, there's a tremendous opportunity to learn from these trials, particularly regarding primary outcomes, treatment duration, and patient selection. We plan to fully integrate these learnings into the PRX012 program. Overall, there is a wealth of information that will benefit the PRX012 development. Let me pause and see if Tran has any comments on this from a strategic perspective moving forward.

Yes. No, absolutely. Thanks, Gene. I think you said it best in terms of over the next 18 months you have donanemab data that looks like middle of next year. And then, of course you have gantenerumab and lecanemab data later this year. And Gene already discussed some of the differences between gantenerumab against both donanemab and lecanemab. But all that being said, I think a lot of the data that's already been recently announced, so to speak, on lecanemab and donanemab have helped basically raise a lot of awareness in the field already in terms of the effectiveness of both of those programs, the positive Phase 2. And that's why those programs only have to do one Phase 3. So from that perspective, we've learned a lot already from those programs. And we're just excited to get to our data here next year in 2023. And then, of course, we will account for the Phase 3 data that come out they do – before we started registrational trials in 24. So I think everything is in front of us. And I think from a strategic perspective, I think as we answered Charles' question, right now with the advent of iADRS as a potential endpoint, we think that really democratizes Alzheimer's clinical development and made it affordable for companies like ourselves. So right now we're – we expect to wholly own this program all the way through to commercialization, given the call point is a specialty call point. And it's a call point that we're clearly keenly focused on from a neurology perspective. So we're really excited for what's ahead of us and for the field too. Thanks for the question.

Your next question comes from the line of Neena Bitritto-Garg with Citi. Your line is open.

Hey, guys. Thanks for taking my question. So I apologize if somebody already asked about this but I was just wondering if you could give us an update on the status of enrollment in the AFFIRM-AL study. And was also just curious if you could comment on how much enthusiasm you're getting from investigators enrolling in that study? Thanks.

Yes. Thanks, Neena for the question. So I'll ask Hideki to jump in on the recruitment and level of excitement part of the question. I'll just say that we're continuing to guide to top-line data there in 2024. We're obviously very excited about that program. As I mentioned in my opening remarks, that program came back following multiple discussions with both the FDA and experts in the AL amyloidosis community, where we had observed a very promising survival benefit in the Stage IV patients in our prior VITAL study and also obviously on the totality of the safety data set. So bringing that back under a SPA with the division of cardio and renal at a predefined success value, alpha value of 0.10 obviously we felt was prudent to do. And we're very excited about moving that molecule forward. Maybe Hideki, do you want to speak just a bit to some of the operational components of the study?

Sure. Yes. Thanks, Gene. Just to say at the top line, we're expecting top line in 2024; we're on track for that. And we're seeing a lot of enthusiasm from sites. We just saw an investigator meeting that was extremely well attended that we are activating sites on a very much an active upflow now, and we have randomized patients within the study. And we're doing everything and anything we can in order to maintain our enthusiasm. For example, we're going back to sites we've already used in the past so they know us quite well. We have a very much hands-on white glove type of approach to these sites so they have direct communication with us for engaging patient organizations like the Amyloidosis Alliance and Amyloidosis Foundation and our present amyloid conferences like ASH and EHA. So we're very, very active out there. We're also growing MSL field force on the site. And so we're very much on track for 2024.

I think it's important to note that while daratumumab has received accelerated approval for AL amyloidosis, the survival data is still not fully mature and doesn't show a survival benefit even up to around two years. For patients with a high risk of early mortality in their trial who have unfortunately passed away, there remains a significant unmet need for a Depleter mechanism like Birtamimab. Our data from the first nine to twelve months suggests a potential survival benefit with a hazard ratio of 0.413 based on a post hoc analysis, which is also supported by our Special Protocol Assessment. We look forward to confirming these findings in 2024. We are optimistic about the direction of the field, and our mechanism is particularly relevant for the patient population in our AFFIRM-AL trial.

Your next question comes from the line of Jay Olson with Oppenheimer. Your line is open.

Hi, hey. Thanks for taking the question. Congrats on all the progress. Maybe just a follow-up on that last question. As you look ahead to the AFFIRM-AL study where you have a really favorable looking SPA that you mentioned, can you just comment on the current unmet need in AL amyloidosis including the mixed results from standard of care chemotherapies, the anti-CD38 antibodies that you touched upon earlier, and then potential for new entrants like I think there's a potential BCL-2 inhibitor from Zentalis? And longer-term, where do you see Birtamimab fitting into the treatment paradigm and your plans to commercialize whether you'll do that alone or with a partner? Thank you.

Yes. Thank you, Jay. So, great questions there. Maybe I can ask Wagner to speak a little bit about this because I think part of what you're asking, Jay, and Tran touched on, this is the relative differences between targeting protein production, which is what the majority of the standard of care approaches do versus targeting for removal of the resident amyloid that has already aggregated and deposited on critical organs, and what's we believe is most proximal to actually leading to organ dysfunction. And so maybe Wagner, do you want to speak just a little bit about that from a mechanism perspective? And then, we can jump back and talk about the commercial component.

Yes, Gene. I think essentially the two very important differentiators between Birtamimab and the other class that is attempting to slow down the disease progression by going after the source, right? We are talking about light chain that is a precursor of an amyloid that's deposited in this organ. So when the patients are diagnosed there is a massive amount of amyloids already there. So it makes sense that one would reduce the production of new amyloids. And that's what these plasma cell therapies and there are many mechanisms that we can name here Birtamimab is one of them. It makes sense that that would be one step. But also another step that will make sense is to remove the amyloid that's already causing toxicity directly to the cells and the organ, particularly in the heart. The myocytes are being directly affected by the amyloid. And an antibody like Birtamimab from our perspective is the only opportunity that we have to really reverse the process that has been built for a long period of time. Even in the patient populations that we classify as late Stage 4, so these are newly diagnosed patients. We are not talking about different stages of the disease. We are talking about a cell population that somehow is at a higher risk of progression that the amyloid is already causing so much damage that you can see via biomarkers you can identify those. In particular in that population, it's very urgent that you have to remove the amyloid because the consequence will be death. Maybe there is another population that could wait a little bit longer and the plasma cell therapies could lead them to a point at least of extension. But the patients at highest risk, it's urgent again that the amyloid has to be removed as quickly as possible to reverse the ongoing process of toxicity.

That's a great segue that we believe. That’s a great segue, Wagner into the BCMA target. I mean look, different ways to better control, light chain production is going to be more competition on the mild side is what we're seeing from the data sets from multiple diseases AL and ATTR. So from that perspective going back to what Wagner just said for patients that are at high risk for early mortality, due to the existing amyloid deposited in the heart, you're going to need a depleter mechanism in order to remove that to have any chance at benefiting that patient. And that's showing up in the DARA data. And so from that perspective, we're highly encouraged about our AFFIRM-AL trial and our position in the disease. And then, we can then start thinking about potential for combination therapies in terms of mild patients, because again these mechanisms are complementary. So I think those are great questions Jay from that perspective. And again, from a commercial perspective, it’s our intention to wholly own this program and commercialize it ourselves. It's a very leverageable sales call point for us calling on hematologists. We know we're up to 75% of the patients are at 500 centers. So it's a very leverageable call point for us. So we're excited to commercialize it on our own, and we're looking forward to data in 2024. Thanks for the question.

Your next question comes from the line of Kennen MacKay with RBC Capital Markets. Your line is open.

Hi. Thanks for taking the question. Maybe just a housekeeping question on PRX012 and then one on – what is – from your conversations with the FDA what is gating the IND for PRX012 at this point? And then following up on the AFFIRM-AL questions. It looks like there are 117 potential clinical trial sites listed on clinicaltrials.gov. But with only 150 or so patients planned for enrollment, that doesn't quite feel right. So maybe as you look at the trial, how many sites are you planning on opening? And I'd love to understand sort of where that is in terms of the number of planned sites being opened? Thanks.

Yeah. Thanks, Kennen. So two good questions. So I think the first on PRX012, I think what you're kind of asking is what's gating from an IND perspective. And obviously, this is the operational pick and shovel work. We just need to get our work done. We need to get all the reports finalized. We need to get the IND compiled and filed. So that's – we look forward to doing that. As I said, the team is on track. They're working hard, and we expect that to be done here in the first quarter. The – on the AFFIRM-AL trial, you had asked specifically about a number of trial sites relative to the number of patients. Obviously, this is a rare disease. We know these sites well. These are expert centers across the globe. The number of these sites we've worked with in the past as Hideki had mentioned earlier in our prior Phase III VITAL study. And so these are sites that are for the most part well known to us and are sites that we now see the patients, for which we're hoping to recruit into the AFFIRM-AL trial. But maybe, I'll let Hideki speak a bit more on that latter topic, if you don't mind Hideki?

Sure, sure. Yeah. So as you mentioned, Kennen, we have 117 sites listed. And that's about right. Remember, the trial has a total enrollment of 150 subjects, 100 to 52 placebo. So that's about right. We don't want to spread ourselves too thin. And so 117 approximately, right? We're looking at additional sites by the way. That's about right in terms of rolling the study on time.

So the other thing to mention too is again, when we first enrolled this trial we were doing all comers right from Mayo Stages 1 through 4. And this time around, this is Mayo Stage 4 newly diagnosed. And so again, this is idiopathic disease. It's equal in regions of the US and Europe. So we just want to make sure we're – as Hideki just said, that we leave no rock unturned, and we want to make sure we do enroll as fast as we can. So hence a lot of the sites, we have already worked with. We're looking for new sites – we're working with some new sites in that number too that you quoted and that's on clinicaltrials.gov. But it's just making sure we try to get as expeditiously enrolled as we can.

Your next question comes from the line of Gobind Singh with JMP Securities. Your line is open.

Good evening. I appreciate the opportunity to ask a few questions. Regarding light chain amyloidosis, are you hearing anything about daratumumab from 2021, which was around $6 billion? How much of that is gaining momentum in light chain since it was approved there? Also, about the Alzheimer's program and the operational expense guidance, what portion, if any, is being allocated for PRX012? If you could provide any specifics on the 150 to 170 range you mentioned, that would be helpful. Lastly, concerning the dual vaccine data presented last year, can you provide any insights on the pyroglutamate Abeta data observed in the models? That's all from me.

Thank you for your questions, Gobind. The three areas we need to address are the expected usage of daratumumab, guidance on PRX012, and details about the dual vaccine. Tran, could you provide insights on the first two questions? Wagner, perhaps you can discuss the dual vaccine and our findings on that topic?

So in terms of the AL breakout for DARA in terms of the 2021 revenue, we don't have a sense of how much of that is AL to this point. Clearly, I think a lot of it is multiple myeloma-driven. And then in terms of our costs that being said it's probably around 20% of our OpEx cost is going to be birtamimab. And so I think from that perspective it gives you a sense of how that's rolling. And clearly, that will go into 2023 and into 2024. So with that maybe I'll turn it over to Wagner in regards to the other question.

The question was whether we have data supporting the clearance of pyroglutamate with our vaccine. Last year, we presented data indicating that PRX012, which targets the N-terminal portion of Abeta, could also clear pyroglutamate plaques from tissues derived from Alzheimer's patients. We believe that all N-terminal antibodies, whether acting directly or indirectly on pyroglutamate like donanemab or other Abeta N-terminal antibodies, can likewise help clear pyroglutamate. This is because when microvilli and macrophages digest plaques, they don't selectively target specific molecules; they internalize both the antibodies and other toxic components present in the plaques. Therefore, I believe that similar to PRX012, the other N-terminal antibodies will exhibit the same effect. Our vaccine was developed based on years of research, particularly with PRX012. So stay tuned, as it wouldn't be surprising if a vaccine designed to generate antibodies targeting the N-terminal portion of Abeta also aids in the pyroglutamate process.

Your next question comes from the line of Tazeen Ahmad with Bank of America. Your line is open.

Hi. Good afternoon, guys. Thanks for taking my questions. One for Tran and one for Gene if I might. Tran, you did get a $50 million milestone payment from Roche for the Parkinson's program. Should we expect any other milestone payments in 2022? And then Gene, I was just curious about your thoughts on ATTR. It's obviously now in Novo's hands. But just given the recent news flow on other programs that have had data namely BridgeBio, just was curious to get your thoughts about the use of the six-minute walk as a primary endpoint or whether or not you think ultimately mortality should be used to figure out the efficacy of this class of particular drug and how you might be differentiated from not only Bridge but also the on-island approach? Thanks.

I'll address the Roche question. We received the $60 million for the Phase 2b PADOVA trial last year, which will be our final clinical milestone. The following milestones will involve regulatory approval, the first commercial sale, and the achievement of certain tiered sales milestones in the program. We are looking forward to those milestones as well. This is the update on the prasinezumab program, and I'll let Gene respond to your second question.

It's a great question regarding ATTR. It ties into our previous discussion about AL amyloidosis and birtamimab, where much of the current research focuses on protein production. ATTR is slightly different because the normal ATTR protein functions as a homotetramer, consisting of four units. There are two approaches to halt the source of protein in this pathological pathway. One approach aims to silence protein production, using methods like siRNA and antisense technologies. The other approach focuses on stabilizing the normal form of the protein, which includes stabilizers like the Idose molecule and Tafamidis, Pfizer's compound in this area. From what we've learned about this strategy, especially reflected in Pfizer's data on Tafamidis, there is a noted survival benefit, with a hazard ratio over 30 months showing about a 30% relative risk reduction in mortality. Most of this effect appears in New York Heart Association Class I/II patients, while Class III patients showed minimal effect. This suggests that targeting the initial stages of this biological pathway requires patients to survive long enough to benefit from the reduction of new protein production. Hence, gentler patient populations may be more suitable for such approaches. However, in these populations, measuring changes in functional endpoints like the six-minute walk test could be challenging since progress may occur more slowly. Regarding PRX004, its mechanism is different as it doesn't aim to reduce new protein production; instead, it targets the aggregated resident protein responsible for organ dysfunction, aiming to remove it. PRX004 is designed to interact with an epitope not present in the normal homotetrameric form but available in its abnormal state, allowing for targeted removal of that protein. This strategy is referred to as a depleter mechanism of action, and despite differences, there are biological similarities between AL amyloidosis and ATTR that could support this approach. Importantly, we believe that a depleter mechanism like PRX004 might uniquely benefit patients experiencing significant amyloid-induced dysfunction. Combination approaches may also be considered since the mechanisms are complementary. As for our partnership with Novo Nordisk, we're very pleased about that agreement. They've announced plans to initiate a clinical trial for ATTR cardiomyopathy in the first half of this year, which we're eager to see progress. Collaborating with Novo, especially on this program, presents an opportunity to expedite bringing such treatments to patients.

Yes, absolutely. I believe the Tafamidis data is the reference point for everyone. Clearly, BridgeBio and Alnylam have reviewed that dataset, which supports what Gene just discussed: a stabilizer is significantly more effective in milder patients, particularly those in New York Heart Association Class I and Class II, while it showed limited efficacy in Class III patients. Thus, the mechanisms of these silencers and stabilizers target the milder population to improve their survival outcomes, even though they may aim to extend beyond 30 months. When considering milder patients, the initial assessment indicates that progressing within a year is a significant challenge based on the BridgeBio data. We will soon see Alnylam's results, and this could indicate whether the findings were specific to the BridgeBio trial. It’s essential to consider the implications of enrolling a milder patient population to enhance survival based on your treatment mechanism. From what Gene mentioned regarding depleters, we are focusing on a more advanced patient group. We are looking forward to the upcoming Phase 2 trial in cardiomyopathy that Novo is set to initiate in the first half of this year, as well as any further necessary clinical studies. Thank you for the question.

That is all the time we have for questions. I'd like to turn the call back to Gene Kinney for closing remarks.

Well, thank you, Josh, and thank you all for joining us. We appreciate your interest in Prothena. And over the coming months, we look forward to sharing further updates on our programs. Thank you.

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