Acumen Pharmaceuticals, Inc. (NASDAQ:ABOS) Q3 2023 Earnings Call Transcript

Acumen Pharmaceuticals, Inc. (NASDAQ:ABOS) Q3 2023 Earnings Call Transcript November 13, 2023

Acumen Pharmaceuticals, Inc. beats earnings expectations. Reported EPS is $-0.24, expectations were $-0.31.

Presentation:

Operator: Good day, ladies and gentlemen. Thank you for standing by. Welcome to Acumen Pharma Third Quarter 2023 Conference Call and Webcast. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please note that today’s conference is being recorded. I will now hand the conference over to your speaker host, Alex Braun, Head of Investor Relations. Please go ahead.

Alex Braun: Thank you, Olivia. Good morning, and welcome to the Acumen conference call to discuss our business update and financial results for the quarter ended September 30, 2023. 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 morning and related slide presentation 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 2 of the accompanying presentation, a press release issued this morning 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. So now I’ll turn the call over to Dan.

Daniel O’Connell: Thanks, Alex. Good morning, and thanks, everyone, for joining us today. Throughout the third quarter and into November, our team is focused on advancing ACU193, our monoclonal antibody for the treatment of early Alzheimer’s disease to the next phase of clinical development. We recognize the importance of additional treatment options for Alzheimer’s patients and caregivers living with this disease. And we believe that ACU193’s high selectivity for toxic amyloid beta oligomers may lead to differentiation via increased clinical efficacy and improved safety and convenience as compared to approved and under-reviewed antibodies. We have made significant regulatory, operational and strategic progress to this end, supported by the deep Alzheimer’s development expertise of our team.

Today, we have positive updates to share regarding the CSF biomarkers from our Phase I study, our recent FDA interaction and the newly announced development partnership and financing to pursue a subcutaneous form of ACU193. Starting with the biomarker data, when we disclosed our INTERCEPT-AD Phase I top-line results this past July at the Alzheimer’s Association International Conference or AAIC, our team had not yet had an opportunity to analyze their corresponding fluid biomarker data from the trial. CSF biomarker data are now available and plasma biomarker data will be received in the near future. Today, I’m pleased to share positive results for ACU193 on CSF biomarkers that further reinforce downstream pharmacology in addition to the previously presented target engagement and amyloid PET data for ACU193.

Consistent drug effects were observed in the multiple ascending dose cohorts in the INTERCEPT-AD trial for Phospho-tau181, total tau, neurogranin and the A-beta 42/40 ratio. Statistically significant improvement was seen with reductions of neurogranin at 60 milligrams per kilogram MAD dose level as well as significant correlation between target engagement and the change in neurogranin concentrations. These effects are particularly notable, since with only three administrations of ACU193 in the multiple ascending dose cohorts, any movement in CSF biomarker effects was not entirely expected. The fact that we have seen such movement is highly supportive of our antibodies downstream pharmacological effects in the brain and is also tied to A-beta oligomer target engagement.

Eric will walk you through the CSF biomarker data in more detail shortly. This October, we presented a deeper dive into our Phase I results at the Clinical Trials for Alzheimer’s Disease Medium or CTAD, which was very well received by the medical community. Overall, we continue to be very pleased with the quality of the data generated in our INTERCEPT-AD Phase I trial and the corresponding insights that have helped to guide the design of our Phase II study such as our compelling target engagement, amyloid plaque reduction, and now, CSF biomarker effects. Importantly, as part of our presentation at CTAD, we announced the doses we are taking forward in Phase II. The two treatment arms versus placebo are 50 milligrams per kilogram and 35 milligrams per kilogram, both administered IV every four weeks.

These doses were selected based on extensive PK/PD modeling of our Phase I data and showed direct target engagement of A-beta oligomers at near maximal effect. In other words, on the basis of the Phase I data and subsequent PK/PD modeling, we have confidence that at both these doses of ACU193, we’ll adequately saturate our intended target, toxic A-beta oligomers in the brain. As we think about the Phase II study and the dosing strategy, we anticipate the 50-milligram per kilogram dose level will replicate and presumably extend the plaque reduction observed in Phase I, and the 35 milligrams per kilogram dose may achieve sufficient oligomer target engagement, but possibly with a lower rate of ARIA-E than the 50-milligram per kilogram dose cohort.

To be clear, both of these dose levels may produce clinical efficacy and we are keen to see whether they will differentiate in terms of therapeutic index or overall benefit risk ratio. Turning to our regulatory update. Recently, we met with the FDA in an end of Phase II meeting to discuss our next clinical study, ACU193 201, which we are calling ALTITUDE-AD. The agency indicated that it is aligned in principle with the study design. We were planning the study as a randomized, double-blind, placebo-controlled, 3-arm study designed to evaluate the clinical efficacy, safety and tolerability of ACU193, with up to 180 participants per arm, for a total of 540 participants with mild cognitive impairment or mild dementia due to AD. We will initiate our ALTITUDE-AD as a stand-alone Phase II study with an 18-month treatment duration commencing in the first half of 2024.

The study plan incorporates an adaptive design with interim analysis to inform the possibility of expanding the size of the study from a Phase II to a Phase III study, which we believe is the most expeditious route to a BLA filing and potential approval. As a reminder, these interims are not futility analyses and in alignment with guidance from the FDA and to avoid bias. And to protect the study’s integrity as a potential registration study, the timing of and data from interims will not be disclosed publicly. Now I’d like to provide an update on our efforts to assess the viability of subcutaneous dosing of ACU193. We recognize the attractiveness of this mode of administration to offer additional flexibility and convenience for patients and caregivers.

Over the last nine months to 12 months, we have evaluated several delivery technologies to support the doses we are exploring in our clinical studies. We are very excited about our recently signed global collaboration and licensing agreement with Halozyme. Using Halozyme’s commercially validated enhanced drug delivery technology, we plan to initiate a Phase I study to compare the PK of subcutaneous form of ACU193 to the IV form in mid-2024. Based on our dose modeling, we believe there is a potential for competitive commercial product profile of a subcutaneous dosage form of ACU193, which may ultimately be commercialized alongside every four-week IV ACU193 to potentially broaden treatment options for patients. Today, we also announced that we have secured a credit facility for up to $50 million with K2 HealthVentures, a health care-focused specialty finance company.

And I’ll let Matt tell you more on how this funding provides us with additional operational flexibility. Taking a look back at 2023, the year thus far has been a transformational one for Acumen. Our positive Phase I top-line results enabled us to demonstrate convincing proof of mechanism for ACU193, further supported by the CSF biomarker data share today. We received encouraging feedback from the FDA on the line of our next phase of clinical development, which we are operationalizing as we speak. Our partnership with Halozyme show the development of a subcutaneous option of ACU193 extends its product profile in pursuit of greater patient choice and convenience. And the additional financing to support subcutaneous development provides the capital to support the focus of our talented team, working to solidify AC193’s potential as a future differentiated and potential best-in-class option for early Alzheimer’s treatment.

And with that, I’ll turn the call over to Eric.

Eric Siemers: Thanks, Dan, and good morning, everyone. We have been very productive since our last quarterly update, and I’m pleased to have data to share with you today regarding the CSF biomarker changes we have measured in our Phase I INTERCEPT-AD study. If you turn to Slides 5 to 8 in the earnings presentation posted today on our website and on the webcast. In the first slide, you can see an observed dose-dependent trend in the multiple ascending dose cohorts, indicating a drug effect of ACU193, in CSF levels of p-tau181, total tau, neurogranin and the A-beta 42/40 ratio. This is after only three administrations of drug. So the fact that we are observing changes is highly supportive of ACU193’s target engagement and downstream pharmacology as determined in our Phase I study.

Neurogranin is a synaptic protein that has been shown to modulate glutamatergic neuronal activity and may be linked to enhancement in synaptic plasticity and cognitive function, and the 60 milligrams per kilogram every four weeks dose of ACU193 showed a nominally statistically significant improvement in neurogranin as compared to the placebo group with a p-value of 0.037. There was also a significant correlation between A-beta oligomer target engagement and change in neurogranin across all doses. These data are consistent with the mechanism of action and target engagement of ACU193, and also provide evidence beyond target engagement of downstream pharmacological effects of ACU193 on neurogranin. Turning to p-tau181. We saw changes directionally similar to neurogranin, a nominally significant decrease of p-tau181 was seen with the 60 milligrams per kilogram dose in the INTERCEPT-AD multiple ascending dose cohort, and a trend was seen for correlation of change in CSF p-tau181 versus target engagement.

This is encouraging because it further supports that ACU193’s mechanism may lead to clinical efficacy, given p-tau’s established relationship with cognitive decline. Remarkably, as shown in Slide 6, we observed that the change in neurogranin was significantly correlated with the change in p-tau181. Researchers in the field have found correlations between CSF neurogranin and p-tau, which suggests a biological link between these two biomarkers and provides further confidence in our biomarker observations with ACU193. As shown in Slide 7, correlations between changes in neurogranin and p-tau181 were more closely related to target engagement, that is binding of ACU193 to A-beta oligomers, then to decreases in amyloid plaque load as determined by PET.

While not conclusive, these analyses support the concept that ACU193 binding to A-beta oligomers, rather than plaque reduction, mediates its downstream pharmacology and potential clinical benefits. We would not expect every biomarker to change with ACU193 treatment. And as shown in Slide 8, we did not see an effect on Neuropentraxin 2. Additional study will be required to understand more about this relatively new biomarker. Please note that plasma biomarkers are in the process of being analyzed, and we expect to be able to share some of that data in the near future. I’d also like to highlight that our symposium presentation at CTAD was well received by the medical community, as Dan mentioned. A couple of important points from our presentation in particular, supported the conclusion from our Phase I study that ACU193 is pharmacologically active and engages its intended target in the brain.

The main takeaway I would highlight from our presentation is the confidence we have in the dose selection for our Phase II trial based on the observed maximal target engagement derived from our novel target engagement assays. At the 35-milligram per kilogram dose, we would expect to nearly saturate our primary target, A-beta oligomers, and fully interrogate the oligomer hypothesis that points to A-beta oligomers as being the most toxic species of A-beta. At the 50-milligram per kilogram dose, we would expect to reach even greater engagement of A-beta oligomers, but in addition, we would also expect to lower plaque load based on our Phase I data. We would expect a lower level of ARIA-E using 35 milligrams per kilogram as compared to the 50 milligrams per kilogram dose.

The bottom line is that because of our robust Phase I results, we have been able to choose two Phase II study active dose arms that could both be potentially efficacious and reduced cognitive decline. Another important takeaway from our CTAD presentation is the consistency of plaque reduction in the multiple ascending dose cohorts of INTERCEPT-AD. For the 10-milligram per kilogram MAD cohort, five of six patients on treatment had a decline in amyloid PET, Centiloids in the single patient without a decline had a small increase of 3.4 Centiloids, which is essentially test retest noise. For the 60 milligrams per kilogram cohort, seven of eight patients had a decline in Centiloids. For the 25 milligrams per kilogram every two weeks cohort, all eight people on treatment had a decline in Centiloids values.

The consistency of these results aligns with the conclusion that reduction in plaque load is due to treatment with ACU193. In summary, our clinical team has been working diligently to prepare for the initiation of our Phase II study ALTITUDE-AD in the first half of 2024. I won’t reiterate Dan’s summary of our encouraging FDA interaction this quarter. So I will emphasize that we are committed to executing on the promise of the A-beta oligomer theory hypothesis, and the potential for ACU193 to be a best-in-class therapeutic option for Alzheimer’s patients and their families. And with that, I’ll turn the call over to Matt.

Matt Zuga: Thank you, Eric. Good morning, everyone. As a reminder, our third quarter 2023 financial results are available in the press release we issued this morning and in our 10-Q that we will file after the close today. As of September 30, we had approximately $282.7 million in cash and marketable securities on the balance sheet. Our cash on hand is expected to support our current clinical and operational activities into the second half of 2026. R&D expenses were approximately $11.2 million in the third quarter. The increase over the prior year was primarily due to increased costs related to drug manufacturing costs, consulting and personnel. G&A expenses were $4.9 million in the quarter, with the increase over the prior year, primarily the result of costs related to personnel and consulting.

This led to a loss from operations of $16 million in the quarter. Today, I’m pleased to announce an agreement with K2 HealthVentures for a senior secured credit facility of up to $50 million. Upon closing, $30 million of the $50 million loan facility was funded. An additional tranche of up to $20 million is also available, which may be funded in installments upon Acumen’s request, subject to review and discretionary approval from K2. This financing provides additional capital to pursue the development of the subcutaneous dosage form of ACU193, which we view as value enhancing for both patients and shareholders, as well as for general corporate purposes. And with that, we can open the call for Q&A. Operator?

Operator: Thank you. [Operator Instructions] And our first question coming from the line of Tom Shrader with BTIG. Your line is open.

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Q&A Session

Thomas Shrader: Hi. Good morning Congratulations on the biomarker data. It was a good change. Eric, I was wondering if you can, for us slow thinkers, walk through your logic for A-beta 42/40 going up? I think we talked about, we weren’t really sure which way it would go. I guess it’s good it changes. And then with the robust tau readout, are you thinking about a third lower dose for at least a while, where you could get a sense of maybe if you have some PD at much lower doses that would almost certainly be very safe? So those are my questions.

Eric Siemers: Yeah. Thanks. Great questions. As far as the A-beta 42/40 ratio, yes, it’s a little complicated, maybe a little confusing. But for whatever reason, even though A-beta plaques are made up of A-beta 1 to 42 (ph) and they’re obviously increased in the brain in spinal fluid, the concentration of A-beta 42 is decreased in patients with Alzheimer’s disease. And that’s thought to be because of equilibrium shifts and the fact that it’s sort of tied up in the brain. So when you’re abnormal in Alzheimer’s, your A-beta 42 is low. So if you have your A-beta 42, and it works better to use the 42/40 ratio. But if you take the 42/40 ratio and it goes up, that means you’re returning people towards a normal non-Alzheimer’s state.

So we tend to think of A-beta 42 being a bad thing. But really in spinal fluid, going up is a good thing. So we looked at it as a really positive result. With regard to the tau, yes, we — those were fairly impressive results after just three administrations drug. And you could raise the possibility of, do we need to explore even lower doses. And from a regulatory standpoint, there’s no requirement to find a minimally effective dose. We chose those doses as we outlined really carefully based on our target engagement assay. We do have built into the protocol a dose escalation for the 50 milligrams per kilogram dose group, which should cut down on the ARIA rate. So the first two doses that people get will actually be 35 milligrams per kilogram, and then they go to 50.

So, yeah, it’s — eventually, it would be scientifically certainly interesting to look at lower doses, but we wanted to pick two doses that we thought really could have clinical efficacy.

Thomas Shrader: Okay. Thanks. That’s all.

Operator: Thank you. One moment for our next question. And our next question coming from the line of Pete Stavropoulos with Cantor Fitzgerald. Your line is open.

Pete Stavropoulos: Hi. Good morning, Dan, Matt and Eric. Thank you all for the update. So one question that I have is, at p-tau there was a great sub group analysis for donanemab and lecanemab, with certain subgroups of patients had greater clinical benefit versus others, for example, baseline tau levels, age, things of that nature. So how are you thinking about these data? And will you incorporate any of these learnings for the inclusion/exclusion criteria for ALTITUDE?

Eric Siemers: Yeah. Thanks. Another great question. So those were very interesting presentations. And I think from a standpoint of actually the Lilly program, they focused on people who had moderate amounts of tau, but it turns out that actually the people with less tau did actually better with the drug. So it all gets back to this idea that people, who were earlier in the disease can benefit more. So we’ve thought quite a bit about that in terms of our upcoming study. And one of the things in our presentation that you may have noticed is that we do have people, who were included in this study based on a visual read of their amyloid PET scans with actually very low Centiloid levels. And initially, there’s some discussion of maybe we shouldn’t include those people in our trial because their plaque load was so low.

But after seeing those presentations, I think we’ve decided we’re going to keep those people in our study. So essentially, the way the study was set up based on our Phase I results, we know that we’ll already be getting some of those really early people. So it was — the data were fascinating, we have to think about them quite a bit. But at the end of the day, we decided that we actually don’t need to change the design of our study.

Pete Stavropoulos: All right. Thank you. And for the changes in biomarkers that you showed today, was there any correlation between, let’s say, plaque reduction and changes in any of the biomarkers or levels of A-beta plaque or Centiloids levels with all those changes?

Eric Siemers: Yeah. Well, the correlations between target engagement in the biomarker changes were greater than the correlations with plaque reduction and those biomarker changes. So again, it’s not absolutely conclusive, it’s directionally — that’s the way the data turned out. But we think that’s very consistent with our hypothesis that the efficacy, in this case, the biomarker changes are related to binding to these A-beta oligomers more than related to plaque reduction.

Pete Stavropoulos: Okay. Thank you. Thanks for taking my questions.

Operator: Thank you. And our next question coming from the line of Paul Matteis with Stifel. Your line is open.

Unidentified Participant: Hey. This is Catherine (ph) on for Paul. Thanks for taking our question. On the Phase II/III, what do you expect to look at in the interim? And what would prompt a move into expanding the study? And then anything else you can say on when you might be interested in taking the interim? Thank you.

Eric Siemers: Hi, Catherine. Thanks for your question. So as we mentioned, we had a favorable interaction recently with the FDA on the Phase II/III design. I don’t think we’re going to go into details on the algorithms and elements that will inform the decision to scale from Phase II to Phase III. But as we get the meeting minutes, and get the study up and running, I think we have an opportunity, maybe share some additional information. But not in a position to comment today.

Unidentified Participant: Thank you.

Operator: Thank you. One moment for our next question. And our next question coming from the line of Colin Bristow with UBS. Your line is open.

Colin Bristow: Hey. Good morning and congrats on the progress. Maybe first one for Eric. Eric, I’m curious, what did you — in terms of the Leqembi subcu data that you saw at CTAD, I’m curious, like what were the key sort of learnings that you had from that and any surprises there? And then how will this change your approach to subcu 193? And then just secondly, more of a sort of administrative question, but how long do you think it’s going to take to enroll Phase II? Thank you.

Eric Siemers: Okay. Well, let me talk about the subcu first, and then we’ll take the other question afterwards with Dan. But anyway, in terms of the subcu, what was really interesting about that was there was this hypothesis that was pretty prevalent with a lot of researchers that ARIA-E was driven by Cmax rather than AUC. And so with the subcu formulation, you would have a lower Cmax and so you’d have less ARIA. And that just turned out not to be the case. It’s unusual in science to just have one experiment be so definitive. But I think in this case, it was pretty definitive that Cmax was not driving ARIA-E, and it was more related to AUC. And so we got an answer to that question. I think from our standpoint, having — well, and for other people in the field, actually, having a subcu formulation is more a matter of patient convenience, what people prefer, that sort of thing, there’s probably not going to be a safety benefit.

But it still means that it can be useful for people in terms of convenience and that sort of thing. So from that standpoint, we got a definitive answer to that question and — but subcu is still something we want to look at. So I’ll turn it over to Dan to talk about timelines.

Daniel O’Connell: Sure. Thanks, Eric and thanks, Colin for the question. In terms of the ALTITUDE-AD study, as we mentioned, we are in the mode of operationalizing and focused on execution. In terms of feedback that we had at CTAD interacting with the site investigators and others in the field, there was a strong demand and interest in participating in the study. So we’re optimistic that the interest in participating in research, and particularly with respect to 193, is we’re in a good moment of time for that. In terms of specific timelines, it’s just too early to say. I mean we’ve got to get sites up and running. There are a series of developments over the next 12 months that will inform more specifically what our timelines are for enrollment, but we’ll be happy to provide additional detail, when we have some visibility on where we stand in terms of enrollment and outcomes.

Colin Bristow: Great. Thanks.

Operator: Thank you. And I see we have a follow-up question from Pete Stavropoulos from Cantor Fitzgerald. Your line is open.

Pete Stavropoulos: Again, thank you for taking the follow up. Again Eric, another, I guess, very interesting presentation at CTAD. It had to do with an analysis of baseline characteristics and ARIA by — for donanemab. Just — I just want to hear your take on that data and sort of how you’re going to implement that for your Phase II, if you’re going to implement any of those factors for your Phase II?

Eric Siemers: Well, yeah, we’ve talked a lot about risk factors for ARIA. And as you know, one of the big ones is APOE4 status. And one of the interesting things that we’ve presented before is that in our six, APOE4 homozygotes, we didn’t have any cases of ARIA. So from that standpoint, I think it’s good. It’s interesting, but not surprising that some of these findings were found and in our upcoming Phase II/III study will more clearly determine whether APOE4 carrier status is a risk factor for ARIA-E. Eliminating that risk factor would obviously be really beneficial in the clinic because now there’s some recommendations that people be tested for their APOE carrier status before you begin treatment. Some clinicians, if you were an APOE4 homozygote would not — would not initiate some of the drugs that are either approved or being looked at for approval. So not having that as a liability would be really clinically, I think, a really major benefit.

Pete Stavropoulos: Okay. And some of the other factors, like anti-hypertensives? The…

Eric Siemers: Yeah. I’m sorry. It’s really difficult, at least for me to interpret those data. They’re kind of interesting. It’s a little bit of a head scratcher. I don’t think there’s anything definitive enough in there that we would change the design of our study. That’s the sort of thing that I would want to see those results replicated before we take those two seriously.

Operator: Thank you. And I’m showing no further questions. I will now turn the call back over to Alex Braun for any closing remarks.

Alex Braun: Great. Thanks, everyone, for joining us today. We did present a lot of information. So if you have any follow-up questions, we are available at the company for you. Have a great day.

Operator: Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.