Acumen Pharmaceuticals, Inc. (NASDAQ:ABOS) Q3 2022 Earnings Call Transcript

Acumen Pharmaceuticals, Inc. (NASDAQ:ABOS) Q3 2022 Earnings Call Transcript November 14, 2022

Acumen Pharmaceuticals, Inc. misses on earnings expectations. Reported EPS is $-0.26 EPS, expectations were $-0.23.

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

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Alex Braun: Thank you, Latonya. Good afternoon and welcome to the Acumen conference call to discuss our business update and financial results for the quarter ended September 30th, 2022. With me today are Dan O’Connell, our Chief Executive Officer; Dr. Eric Siemers, our Chief Medical Officer; and Matt Zuga, our Chief Financial Officer and Chief Business Officer. Before we begin, we encourage listeners to go to the Investors section of the Acumen website to find our press release issued this afternoon and related slide presentation that we’ll discuss today. Please note that during today’s conference call, we may make forward-looking statements within the meaning of the Federal Securities laws, including statements concerning our financial outlook and expected business plans.

These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Please see slide two of the accompanying presentation, our press release issued this afternoon, and our most recent annual and quarterly reports filed with the SEC for important risk factors that could cause our actual results to differ materially from those expressed or implied in the forward-looking statements. We undertake no obligation to update or revise the information provided on this call or in the accompanying presentation as a result of new information or future results or developments. After our prepared remarks, we’ll open the call for Q&A. Now, I’ll turn the call over to Dan.

Daniel O’Connell: Thank you, Alex. Good afternoon and thank you for joining our call today. The third quarter was characterized by increased momentum on several fronts for Acumen. The highlights include improved enrollment in the ongoing INTERCEPT-AD trial, Fast-Track designation for ACU193 from the FDA, and publication of our INTERCEPT-AD trial design and anticipated critical development plans for ACU193. I’d also like to note that our progress comes amid renewed optimism in the Alzheimer’s field due to lecanemab recent positive clinical trial results, which reinforce the role that soluble Aβ species may play in the disease. I’ll start today by discussing our business and operational highlights, and Dr. Siemers will then provide some comments and context on the recent developments for both ACU193 and the Alzheimer’s field as a whole.

Turning to updates from our Phase 1 INTERCEPT-AD clinical trial of ACU193, the first monoclonal antibody discovered and developed to selectively target soluble Aβ oligomer to enter the clinic. Enrollment is now ongoing at 17 active sites in the US. As previously noted during the initial stages of the trial last year in early 2022, we experienced slightly slower patient enrollment than originally projected. However, in the last four months, patient recruitment and enrollment has accelerated considerably. We are working closely with our partner CRO and clinical sites to ensure timely scheduling of the various visits per the study protocol, which also include imaging conducted at third-party sites. We are pleased that enrollment momentum is accelerating ahead of the holiday season.

I should also note, we are very encouraged with the safety profile observed to date in the trial, which aligns with our expectations for ACU193. Based on the trial current status, we are targeting enrollment completion in the first quarter of 2023 and reporting topline results in the second half of the year. In anticipation of moving quickly to a subsequent clinical trial, I want to provide an update on some of the pertinent Phase 2/3 activities that have been completed or are underway. On the toxology front, the in-life phase of the chronic GLP toxicity study has been successfully completed and the final study report is expected in the first quarter of 2023. Our chemistry manufacturing and controls team led by Leanne Shank , who joined as Head of CMC this June, and is working diligently to ensure clinical drug readiness in support of the planned Phase 2/3 study for ACU193.

We have completed development of our new drug substance production process and produced our first Phase 2/3 drug substance manufacturing lot. We have also completed development of the lyophilized formulation of our drug product. Based on this progress, we are well-positioned to scale manufacturing and have sufficient drug supply to meet the requirements of our current development plan. As part of the CMC efforts and our application for the non-proprietary name for ACU193, we have confirmed ACU193 as a consensus IgG2 subclass antibody, which is consistent with our hypothesis that the reduced effect of function of this subclass should favorably influence safety outcomes for AC-193. We continue to pay close attention to the development of subcutaneous formulations of other antibody products in the Alzheimer’s field.

Dependent on observed patient dosing information generated in our Phase 1 study, we will assess options for potential development of a subcutaneous formulation as part of our ACU193 product development plans. Though we were acutely focused on advancing INTERCEPT-AD and readying for the next phase of our development plan for the product, we do continuously evaluate the landscape for opportunities that fit with our capabilities and expertise. We are committed to being highly selective in the deployment of capital and evaluating such opportunities, but also appreciate the pipeline expansion could be a path to greater value creation in the future. On a final note, during the third quarter, we continue to expand our senior leadership team, adding Derek Meisner as Chief Legal Officer.

Derik’s legal career has spanned more than 2 decades at both biotechnology companies and investment firms, and he is a valuable addition to the company and our senior leadership team. With that, I’ll hand the call over to Dr. Eric Siemers. Eric?

Eric Siemers: Thanks Dan and good afternoon everyone. We are delighted that the FDA recently granted Fast-Track designation to ACU193 for the treatment of early Alzheimer’s disease. This underscores the potential clinical utility of ACU193 in this patient population with such a high unmet need for additional disease-modifying therapies. To this end, we are committed to designing an efficient and innovative clinical development plan for ACU193. We recently published an article in the Journal for Prevention of Alzheimer’s Disease that outlines the design of our ongoing Phase 1 INTERCEPT-AD trial or ACU193, and the planned criteria were advancing to a Phase 2/3 clinical trial based on recent advancements in clinical research methods in Alzheimer’s disease.

As we detail in the article, the criteria for advancing from a Phase 1 to a Phase 2/3 trial will be based on safety and tolerability, pharmacokinetic parameters, and target engagement at doses that have acceptable safety and tolerability. While we have not finalized the design for the Phase 2/3 trial, we do anticipate it would begin with the patient sample size typical of the Phase 2 trial, an interim analysis would then determine whether to increase the sample fine to meet the statistical power of a typical Phase 3 trial. This interim analysis may be based on several cognitive measures in various biomarkers, for example, correlated to in the blood and cerebrospinal load. Pending discussions with regulators, if the interim analysis is positive and the trial has expanded, the Phase 2/3 trial could potentially serve as a registration trial.

Considering the design of a Phase 1 INTERCEPT-AD study in patients with early AD and the adaptive design of the planned Phase 2/3 study, this innovative clinical development plan could allow us to evaluate oligomers more rapidly as a promising therapeutic target for Alzheimer’s disease patients. Looking at the field more broadly, the recent positive Phase 3 CLARITY-AD trial results for lecanemab, underscore the progress the field is making in the fight against Alzheimer’s disease. It has also driven a renewed look at the role that soluble Aβ species rather than deposited amyloid plaques, may play a major role in the pathology of Alzheimer’s disease. The gantenerumab GRADUATE study results announced today describing a negative readout for our plaque targeted monoclonal antibody further supports the importance of these sole species.

The amount of plaque lowering with gantenerumab was reportedly less than expected, and we look for a more complete assessment of the relationship between plaque lowering and slowing of disease progression at the upcoming CTAD Meeting. lecanemab was designed to target what are known as protofibrils, which are soluble and is a similar approach to ACU193, targeting Aβ oligomers, which are also soluble. We view these similarities as important to the ACU193 program, so I’ll take a minute to discuss them in more detail. The relationship between Aβ and Alzheimer’s disease is complex and that Aβ may exist as soluble species, which include monomers, oligomers, and protofibrils were insoluble species, which include fibrils and amyloid plaques.

The fact that amyloid plaques began to deposit 15 to 20 years prior to the onset of cognitive symptoms is now well-established. Following the appearance of plaques begins to occur with the development of neurofibrillary tangles and synaptic degeneration begins with the inevitable eventual occurrence of cell death in the brains of patients with Alzheimer’s disease. This temporal course and other data suggest that deposit named plaques are not themselves toxic. However, we believe that amyloid plaques can be one source of the soluble Aβ species that are toxic, which includes the protofibrils targeted by lecanemab, as well as the forms of oligomers that are targeted by ACU193. Many years of research indicate these soluble species inhibited normal electro-physiologic activity brain cells known as long-term potentiation, and they disrupt their own function.

Considering these data together, since ACU193 and lecanemab, both target similar soluble Aβ species, we believe the recent announcement of a statistically significant benefit from lecanemab in a Phase 3 trial improves the probability of success for ACU193. Importantly, lecanemab exhibited a lower rate of RAE than other monoclonal antibodies that directly target plaque, even though it does lower plaque load based on PET imaging. This finding suggests that targeting soluble Aβ species such as protofibrils or Aβ oligomers rather than plaque directly may lead to a better safety profile. gantenerumab ARIA rate of 25% announced today further highlights the safety challenge with antibodies that directly targeted plaque, a somewhat lower rate ARIA for gantenerumab compared to abetamabs and donanemab would be consistent with less plaque reduction for gantenerumab compared to abetamab and donanemab.

ACU193 appears to have little or no lowering the plaques based on animal studies and ex-vivo studies using atopies human brain tissue of patients with Alzheimer’s disease. For these reasons, we are hopeful that minimal or no ARIA will occur with ACU193 in the clinic. The development of therapies with less ARIA and greater or equal efficacy will continue to be an investment opportunity for the foreseeable future in Alzheimer’s disease. And with that, I’ll turn the call over to Matt.

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Matt Zuga: Thank you, Eric. Good afternoon, everyone. Our complete third quarter and year-to-date 2022 financial results are available in the press release we issued this afternoon and in our 10-Q filed today. with approximately $200 million in cash and marketable securities on the balance sheet at September 30th, we ended the third quarter in a strong financial position, which provides us with the runway to achieve multiple clinical development milestones. Based on our current operating plan, we expect our cash to last through 2025. R&D expenses were approximately $8.3 million in the third quarter. The increase over the prior year period was primarily due to the increased activity in the ongoing INTERCEPT-AD trial. G&A expenses were $3.1 million in the quarter with the increase over the prior year period, primarily the result of increased headcount.

This led to a loss from operations of $11.4 million in the quarter. In conclusion, we remain well-financed to execute against our strategic priorities. We look forward to reporting topline data for INTERCEPT-AD in the second half 2023 and we’ll remain disciplined as we use our capital to advance our clinical program for ACU193 and deliver value to patients and shareholders. And with that, we can open the call for Q&A. Operator?

Q&A Session

Operator: Certainly. And our first question will come from Paul Matteis of Stifel. Your line is open.

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

Daniel O’Connell: Thanks, James, for your question. We were anticipating both of those coming through early in the Q&A session. So, thanks for putting them on the table. In terms of the updated guidance for 2023, I think maybe the aspects of kind of where we are with enrollment or kind of legacy from late 2021 and early 2022. So, the momentum has picked up considerably, and which is why we’ve elected to guide to completion of enrollment in the first quarter. And in terms of topline results, we’ve traditionally guided within a six-month window and have sort of essentially shifted to the back half of the year based on where we are in the study. In terms of safety, I can’t go further than to say that as of where we are today, we are very encouraged at what the blinded data has suggested on review — kind of standard review as the study has progressed and consistent with kind of the original thesis for ACU193 as safety profile on various aspects of clinical safety measures.

But I won’t elaborate more than that, but I think we are, as I’ve stated, encouraged with what we have observed to date.

Unidentified Analyst: Great. Thanks.

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

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

Eric Siemers: Well, yes, thanks for the question. It’s a very pertinent one. That assay is under development. We have a prototype that already, but the sensitivity is being increased. And I should mention that rather than trying to measure oligomers directly, what we are trying to measure is the oligomer found to the antibody down to 193. And the reason for that, as I think you probably know, the reason is the oligomer concentrations are very lovely in their symptom range. And so you’re trying to take just the oligomer concentration is low to begin with and then when it gets lower, it just becomes technically not feasible. But what we do want to do in our study is show target engagement and really, by definition, that is antibody 193 bound to the oligomers.