Astria Therapeutics, Inc. (NASDAQ:ATXS) Q3 2023 Earnings Call Transcript

Astria Therapeutics, Inc. (NASDAQ:ATXS) Q3 2023 Earnings Call Transcript November 13, 2023

Astria Therapeutics, Inc. misses on earnings expectations. Reported EPS is $-0.63 EPS, expectations were $-0.51.

Operator: Good morning and welcome to the Astria Therapeutics Quarter Three 2023 Corporate Update. At this time, all attendees are in a listen-only mode. [Operator Instructions] As a reminder, this call is being recorded and a replay will be made available on the Astria website following the conclusion of the event. I’d now like to turn the call over to Liz Higgins, Director of Communications and Investor Relations at Astria Therapeutics. Please go ahead, Liz.

Elizabeth Higgins : Thank you, Tara. Welcome to today’s Astria Therapeutics Q3 2023 conference call. With me today are Jill Milne, Chief Executive Officer, Christopher Morabito, Chief Medical Officer; Andrew Komjathy, Chief Commercial Officer; Andrea Matthews, Chief Business Officer and Noah Clauser, Chief Financial Officer. We issued a press release this morning summarizing our corporate update and third quarter financial results, which we will reference on today’s call and is available on our website. We are also using slides during today’s call that are available within the events and presentation section in the investors part of our website. I would like to note during today’s event, as mentioned on slide 2, we will be making forward-looking statements related to our business based on current and future expectations.

Actual results may differ materially from those indicated by these statements as a result of a variety of risks and uncertainties, including those discussed in our most recent Form 10-K and our subsequent SEC filings. Such statements may represent our judgment as of today and we undertake no obligation to publicly update any forward-looking statements except as required by law. I will now pass the call over to Jill Milne, Chief Executive Officer. Jill?

Jill Milne: Good morning and thank you for joining our earnings call. We’ve had an exciting few months at Astria and are in a strong position to close out the year. Just a few days ago at ACAAI annual meeting, we shared positive Phase 1a data for STAR-0215 of our lead program that supports our vision for STAR-0215 to be the first choice preventative treatment for Hereditary Angioedema or HAE. The data confirm the potential for STAR-0215 to prevent HAE attacks with dosing two or four times per year. We aim to provide patients the option to choose a dosing regimen that works best for their lives, which we will review more on the coming slides. Last month, we also announced the expansion of our pipeline with STAR-0310. We plan to present a preclinical profile for this program next year, with a planned IND submission by the end of 2024, and Phase 1a initiation expected in Q1, 2025.

Our focus for Astria is to develop first choice products that improve the health outcomes of patients with allergic and immunological diseases. First choice to us means patients and treating physicians would choose our products because of their strong competitive efficacy, low treatment burden, and favorable safety and tolerability profile. Our initial pipeline is focused on well-established mechanisms, mechanisms that are clinically validated where we believe we can advance ultimately best-in-class programs. Very much in line with this strategy is our STAR-0215 program. We think that STAR-0215 is very well positioned to be the first choice preventive treatment to help improvise the lives of patients changings. STAR-0310 is an anti OX40 antibody, also aligned with this strategy, that we plan to develop as a potential best-in-class therapeutic for atopic dermatitis and potentially other indications.

The next slide is an overview of our expected milestones for the integrated pipeline with both programs. We just shared additional Phase 1a results at ACAAI this weekend, which further supports STAR-0215’s best-in-class PK profile, and the options for Q3 and Q6 month dosing as a potential HAE preventative therapy with robust attack suppression and low treatment burden. Our ALPHA-STAR in HAE patients is progressing very well. We are now planning to share meaningful initial proof- of-concept results in Q1 of 2024. Assuming positive results from this trial, we plan to initiate a pivotal Phase III trial in Q1 of 2025 and are looking at ways to accelerate this timeline. We are actively working on the design of our Phase III trial. With STAR-0310, we expect to submit an IND by yearend 2024 and to share the preclinical profile in 2024 at a scientific conference.

We anticipate early proof-of-concept results from a Phase 1a trial in Q3 of 2025, which we believe will be an important milestone for the program. Next, assuming positive results in the Phase 1a trial, we anticipate initiating a Phase 1b clinical trial in atopic dermatitis patients in the second half of 2025. I will now turn it over to Christopher Morabito, our Chief Medical Officer, who will review the new data we have seen for STAR-0215. Chris?

Christopher Morabito: Thanks, Jill. STAR-0215 is a potential first-choice treatment for the prevention of attacks in hereditary angioedema. HAE is a rare, life-threatening, and life-changing disease characterized by severe, unpredictable, painful, and sometimes life-threatening edema in the skin, abdomen, and airway. Patients with HAE live in fear of having an attack that could be immensely painful or leave them disfigured for several days, or worse, could be fatal. For most patients, it’s caused by a deficiency in a protein called C1 inhibitor, which is an important component of the body’s complement system. Deficient C1 inhibitor may lead to runaway plasma kallikrein activity, producing bradykinin that causes the painful swelling attacks that characterize HAE.

STAR-0215 inhibits plasma kallikrein in order to prevent bradykinin release and subsequent swelling, the same mechanism as market leader, [Taxiro]. We believe that 215 has the potential to differentiate from currently available therapies, and our goal is to reduce the disease and treatment burden for people living with HAE and help to normalize their lives. STAR-0215 is a YTE modified extended half-life monoclonal antibody, which is a trusted modality in HAE. STAR-0215 has the potential to support dosing every three and every six months, and we have formulated it to be high concentration and citrate-free for self-administration that may be less painful. As Jill mentioned, we have now shared the results of our Phase 1 Healthy Subject Trial up through day 224 days, and these data support our vision for the program.

I will now review them in more detail in the coming slides. The Phase 1a trial of 215 is a randomized, double-blind, placebo-controlled trial conducted in 41 healthy subjects. Shown here are the five single-dose cohorts. The results I will share over the next few slides include safety, tolerability, PK, and PV data through the full follow-up period for cohorts one through three, and the initial results for cohorts four and five. Ultimately, we are very pleased to see that these results support both every three and every six-month dosing strategy for a potential HAE preventative therapy with robust attack suppression and low treatment burden. On slide 8, we turn to the pharmacokinetic results. In the graph, you can see the rapid and sustained increases in 215 and 600 milligrams dose, for example, concentrations above 12 micrograms per mil, the threshold we believe is associated with clinical benefit, were achieved at about 11 hours after the dose was administered.

For all of the doses above 100 milligrams, concentrations remained above the threshold for clinical benefit for more than 84 days or three months. Based on these data, we estimate the half-life of 215 to be up to 127 days. We also saw favorable safety and tolerability with 215 and no serious adverse events for discontinuations due to an adverse event. The most common treatment-emergent adverse events observed were associated with injection-site reactions of erythema, parietus and swelling. Here we see our modeling for potential three and six month dosing regimens, updated with these newest data. As you see, these results confirm our approach to evaluating administration of 215 every three and every six months. On the left side, we have a simulated three-month dosing regimen that begins with a 600 milligram loading dose on day zero and then follows it up with a 300 milligram dose given then every three months.

We are pleased to see that this dosing regimen can maintain C-trop levels at about 25 micrograms per mil, well above the 12 microgram per mil threshold associated with prevention of HAE attacks. On the graph on the right, we have a simulated six-month dosing regimen, which begins with a 600 milligram loading dose and then 600 milligrams every six months, starting 28 days later. Again, we see C-trop levels that stay well above the 12 microgram per mil threshold, this time at 27 micrograms per mil. Based on these results, we believe that both of these regimens could be successful in preventing HAE attacks, and we will talk more about our dosing strategy on upcoming slides. On slide 10, we turn to the pharmacodynamic results. The graph shows the reported substrate assay in healthy subjects and includes STAR-0215 as well as amlitelimab data, acknowledging that these are data from two different healthy subjects, single dose, preclinical trials.

With 215, we saw statistically significant inhibition to plasma activity observed through day 140 after single doses of 300 and 600 milligrams and through day 224 after single doses of 1,200 milligrams sub-q. The percent inhibition to plasma kallikrein is maintained through day 84 after single doses at levels greater than or similar to those achieved by amlitelimab at peak. Given the promising healthy subject results, we are excited to be studying STAR-0215 in HAE patients. Here is an outline of our ALPHA-STAR trial which is currently evaluating STAR-0215 in HAE patients. We are pleased to share that this trial is progressing well. And we are currently enrolling into the third cohort. We are now planning to share initial proof-of-concept results in HAE patients in the first quarter of 2024.

Assuming positive results from this trial, we expect to initiate Pivotal Phase 3 trial in Q1 2025, and we are looking at strategies to accelerate this timeline. The ALPHA-SOLAR long-term open-label trial is open. Now there are data accruing to participants who have received multiple doses of STAR-0215. I will now turn it over to Andrew Komjathy, our Chief Commercial Officer, who will review the results of some new market research. Andrew?

Andrew Komjathy: Thank you, Chris, and good morning, everyone. Our vision for STAR-0215 is to develop a treatment option that can help normalize the lives of patients with HAE. As Chris mentioned, we’ve recently completed or conducted some additional market research with both patients and physicians to get a better understanding of the level of interest and enthusiasm around every three and every six month dosing options for STAR-0215. We presented STAR-0215 ‘s profile with both three and six month dosing options to 92 HAE patients and caregivers and 60 HAE treatment providers. On the left graph, you can see that 90% of patients are likely to ask their HCPs about a product with STAR-0215 profile with every three month dosing, and 97% of HCPs are likely to prescribe it.

On the right, you see that 76% of patients are likely to ask their prescribers about the profile with every six month dosing, and 93% of prescribers are likely to prescribe it. While the patients and caregivers indicated a slightly higher preference for a three month dosing regimen, both options indicated a high level of interest from both patients and from prescribers. Given the faster development timeline for a three-month dosing regimen, we intend to prioritize clinical development for every three-month administration, followed by a six-month dosing option, enabling patients to choose a regimen that works best for that. So in summary, we’re excited about the potential of STAR-0215 becoming a first choice preventative treatment for HAE patients for the following reasons.

One, as Chris shared earlier, we have compelling data from our 1a trial that supports its potential best-in-class profile. Two, STAR-0215’s mechanism of action and modality are proven safe and effective in HAE, as demonstrated by the current market leader. Three, STAR-0215 has the potential to provide rapid and durable protection against HAE attacks. Four, STAR-0215’s citric acid free formulation is expected to reduce injection site pain associated with formulations that contain citric buffers. Finally, we plan to develop STAR-0215 in options that support patient choice. By prioritizing development on a three-month dose option first, followed by a six-month dosing regimen. We see a very bright future for STAR-0215 as the potential first choice preventative HAE therapy.

And we look forward to providing you additional updates on our progress next quarter. I’ll now turn it over to Andrea Matthews, our Chief Business Officer, who will introduce STAR-0310 program. Andrea?

Andrea Matthews: Thanks, Andrew. Let’s turn to our second program, STAR-0310 in atopic dermatitis. Atopic dermatitis is an immune disorder associated with loss of skin barrier function and itching. It is driven by diverse mechanisms which span the spectrum of T cell driven pathology and it affects approximately 5% of the US population. Half of these cases are reported to be moderate to severe. The burden experienced by moderate to severe atopic dermatitis patients can be significant and can include intense itch, inflamed skin, sleep disruption, depression and infections. Here you see psoriasis demonstrates precedent for growth, for market growth and evolution for targeted therapies in dermatology. US sales for targeted therapies for psoriasis were approximately $ 1 billion in 2010 and that’s when there were two drug classes approved compared to more than $17 billion in 2022 with 15 approved therapies across four major drug classes.

Atopic dermatitis, there are currently only two approved drug classes for biologic therapies. Given the higher prevalence of atopic dermatitis and psoriasis, we and others see that the atopic dermatitis market has even greater potential. We think that the moderate to severe atopic dermatitis treatment market could reach $26 billion by 2030. Currently, Dupixent is the market leader for targeted atopic dermatitis treatments. And our base case assumption is that OX40 treatments will be after Dupixent in the treatment regimen for atopic dermatitis. However, there’s good rationale for this to evolve prior to the potential launch of our program. In both scenarios, we believe that there is substantial opportunity for STAR-0310. I’ll now hand the presentation over to Chris who will review the disease pathology of atopic dermatitis and also our vision for STAR-0310.

Chris?

Christopher Morabito: Thank you, Andrea. Here you can see the immune dysregulation in atopic dermatitis can be complex. Current approved biologics of other late stage non -OX40 biologics target only the Type 2 pathway, hitting downstream cytokines from Th2 cells. But AD is more complicated than this. Type 1 and Type 3 pathways also contribute to this disease. STAR-0310 is an OX40 inhibitor which targets multiple effector T cell pathways. It aims to reduce the activity of a broader group of Th cells that are known to contribute to the disease and has the potential to induce higher rates of clinical responses in more patients than currently available biologics and maybe disease modify. Here we do a deeper dive on the OX40 pathway programs.

There are three programs that have achieved clinical proof-of-concept. Amlitelimab from Sanofi which targets OX40-Ligand, rocatinlimab from Amgen and telazorlimab, which is the parent program for STAR-0310, both of which target OX40 on activated T cells. All three of these programs have seen promising clinical efficacy results through Phase 2b in atopic dermatitis. Amlitelimab targets OX40-Ligand, which is expressed in a wider array of cell types, which could lead to increased risk for respiratory and vascular adverse events. While rocatinlimab is afucosylated anti-OX40 which is selected for T cell that depletes T cell in an enhanced ADCC. T cell depletion leaves the cytokine release and potential increased risk of infection. 310 is a next generation of telazorlimab.

310 is designed to have higher affinity, greater potency, and YTE half-life extension technology. We believe that 310 is the potential to be the first choice OX40 for moderate to severe atopic dermatitis. As mentioned on the previous slide, it is designed for high affinity with selective potency, and we believe that it can match or beat the efficacy scene in other OX40 programs. The half-life of 310 is extended with YTE technology, and with the goal of reducing the time between doses. And we also believe that we have the potential to administer 310 with subcutaneous delivery. And given that 310 is designed to be T cell preserving with low ADCC, we think it has the potential to have the best-in- class safety profile. We have filed a provisional patent application for STAR-0310 that, if converted, granted, and nationalized would provide patent term extension through 2044 before taking into consideration any potential patent term extensions.

As noted, we believe that 310 could be a best-in-class and first choice treatment for atopic dermatitis. Starting first with common factors for OX40 pathway [inaudible] bodies, targeting this pathway has the ability to have disease modifying impacts. The OX40 pathway has potential for effectiveness across AD driven by multiple effector T cell types, not just Th2. The potential benefit here is robust and sustained responses across a broad range of AD. We also believe that due to the YTE modification, long acting 310 has the potential to be administered four to six times per year compared to the anticipated 12 times per year for amlitelimab and rocatinlimab. We believe the safety profile of 310 will differentiate from both rocatinlimab and amlitelimab as 310 has the potential for reduced T cell depletion due to ADCC and limited potential for AD due to off-target binding.

Beyond atopic dermatitis, we believe that target OX40 has strong potential in a broad range of additional indications. Noah Clauser, our Chief Financial Officer, will now review our financial information and upcoming milestones. Noah?

Noah Clauser : Thank you, Chris. On this slide, I’ll provide a brief summary of important financial information. As of September 30th, 2023, we had $188.8 million in cash, cash equivalents, and short-term investments. In October 2023, we closed a $64 million underwritten offering. Following the October financing, we expect our cash to support our current operating plan into 2026. Our current operating plan includes the development of STAR-0215 and STAR-0310, including for STAR-0215, support for all program activities up to the initiation of the planned Pivotal Phase 3 trial, and for STAR-0310, the anticipated submission of an IND, the planned Phase 1a clinical trial on healthy subjects, and any related anticipated milestone payments.

Also illustrated here is a summary of our outstanding equity. In addition to our 36.3 million outstanding common shares, we now have 1.6 million pre-funded warrants and 5.2 million as converted preferred shares. So in total, we have 43.1 million outstanding common equivalent shares. For additional financial information, please see our earnings press release issued earlier this morning and our 10-K, which we plan to file with the SEC aftermarket today. I will now touch on our key upcoming milestones and then we will open up for questions. On this slide, you can see the cadence of anticipated milestones, as well as our future development goals for our combined pipeline with at least one clinical milestone each year in the coming years. Next year is a big year, as we expect to report proof-of-concept results for STAR-0215 in patients in Q1 and for STAR-0310, we plan to submit an IND by yearend.

Our ultimate goal is to bring first choice therapies to patients and we are looking forward to executing on that goal in the years to come. I will now ask the operator to open up the line for questions. Thank you.

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Q&A Session

Operator: [Operator Instructions] So our first question comes from Eun Yang from Jeffries.

Eun Yang: Yes, can you hear me, okay? Okay, great. Thank you very much. So, can you talk about, so Phase 1b data in HAE patients have been accelerated. Can you talk about what has caused the accelerated timeline for the data readout? And second question is on Phase 3. I think Jill mentioned that it’s going to start in first quarter of 2025, but you are looking into expedite the timeline. So, Phase 3, do you think the design would be similar to ASL targeting prekallikrein from Ionis or do you think that you may add an active competitor such as the Taxiro for the efficacy comparison? Thank you.

Jill Milne: Great. Thanks, Eun Yang. And Chris will address those questions.

Christopher Morabito: Yes. Thanks, Eun. Yes, we’re very excited about the ability to demonstrate some initial proof-of- concept data in patients. And even more excited that the timeline for that has been accelerated now to Q1. And the reason for that is because we’ve now achieved target enrollment in cohorts 1 and 2. And are rolling into cohort 3 and anticipate that we will achieve a planned interim analysis trigger earlier than anticipated. So the data that we plan to share in Q1 will be based on the interim analysis that will trigger in Q1. And as mentioned during the call, aimed to provide meaningful POC data demonstrated that whether STAR-0215 may be effective when given every three months and every six months to patients.

The second question about the Phase 3 design, yes. We are anticipating that the Phase 3 is in Q1, but we’re looking at every opportunity to potentially accelerate that. We’ve been doing a lot of work thinking about the design of the Phase 3 study. Our current assumption is that it will be a placebo-controlled trial that we will not be versus an active competitor. We also assume that we would have a similar treatment period as other Phase 3 trials, which specifically is about six months of treatment period. And that the primary endpoint would be similar to what’s been used also in Phase 3 studies, which is essentially changed from baseline and or versus placebo and monthly attack rates.

Operator: Our next question comes from Sam Slutsky of LifeSci Capital.

Sam Slutsky: Hey, good morning, everyone. Thanks for the questions and the congratulators on updates. Just two for me. I guess for the upcoming ALPHA-STAR interim analysis, given that there’s no placebo arm, just what data are you looking for that you would consider randy before moving to Phase 3, as you think about the different dosing arrangements that you might take forward?

Jill Milne: Yes, Chris.

Christopher Morabito: Yes, sure. Hi, Sam. So, right, we don’t have a placebo, but we built into this a robust run-in period in which we collect important baseline information on all of our participants. The planned efficacy analysis has changed from baseline on various efficacy parameters to inform the effectiveness of this drug in PGE, specifically whether a dose can be provided for three months and a dose can be provided for six months.

Sam Slutsky: Okay. And then just as you think about the quicker enrollment, you saw an ALPHA-STAR and read through to Phase 3. Anything that stands out, whether the certain sites you may reuse or just patient feedback in terms of your dosing regimens, et cetera, as we think about timelines for Phase 3?

Christopher Morabito: Sure. So I think two key things have contributed to the accelerated timelines here. One is the profile. I think that when we talk with physicians, the community, the patients, working with our advocacy organizations, we get a lot of frankly positive feedback that the profile is something that is meaningful to patients with this disease, specifically the ability to administer in such a way that has the potential to potentially normalize the lives of people living with this disease that appears to be very attractive. And there is interest among sites and potential participants in joining our development program. And the second is the trial design. I think we put a lot of effort into thinking about a clinical trial that would provide a meaningful data in a timely fashion.

And you pointed out one in question one, which is the lack of a placebo group, which for many is a detriment. So eliminating the placebo group and thinking about dosing regimens that could provide important data with limited resource utilization, i.e. sample size, again, it appears to be attractive to sites and also to patients.

Operator: Our next question comes from Seema Shorin from Evercore.

Unidentified Analyst: Hi. Thank you for taking my questions. My first question is on the proof-of-concept data that is coming in first quarter. Like, I know the study is small, but what do you think is a win in terms of reduction in HAE attack rates for this upcoming data readout? And I will follow up.

Christopher Morabito: Right. So the traditional way of looking at efficacy here is by looking at essentially the monthly attack rates over time. What has been done in another Phase 1b and 2 trials, is looking at this end point and there’s been between 75% to 100% reductions with small sample sizes at various dose levels. Another way of looking at this is by looking at the proportion of people who are attack free for defined periods of time. For us, that could be after a single dose, looking at a proportion of people who are attack free at three months, looking at people who are attack free at six months. And that hasn’t been previously reported in any significantly meaningful way. So that’s something that I think would differentiate us in terms of this drug’s ability to impact meaningfully the lives of people with this disease. So we’ll be looking for a high proportion of people that are attack free for those predefined periods of time.