Acumen Pharmaceuticals - Q3 2022

Transcript

Operator (participant)

Good day, and thank you for standing by. Welcome to the Acumen Pharmaceuticals Q3 2022 conference call and webcast. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. 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 begin.

Alex Braun (Head of Investor Relations)

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 Daniel O'Connell, our Chief Executive Officer, Dr. Eric Siemers, our Chief Medical Officer, and Matthew 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 any 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 (CEO)

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 clinical 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's recent positive clinical trial results, which reinforce the role that soluble A-beta 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 I INTERCEPT-AD clinical trial of ACU193, the first monoclonal antibody discovered and developed to selectively target soluble A-beta oligomers to enter the clinic. Enrollment is now ongoing at 17 active sites in the U.S. 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 partnered 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's current status, we are targeting enrollment completion in the first quarter of 2023 and reporting top-line results in the second half of the year. In anticipation of us moving quickly to a subsequent clinical trial, I want to provide an update on some of the pertinent phase II/III activities that have been completed or are underway. On the toxicology 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 Liean Schenck, who joined as head of CMC this June, is working diligently to ensure clinical drug readiness in support of the planned phase II/III study for ACU193. We have completed development of our new drug substance production process and produced our first phase II/III 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 these CMC efforts in our application for the non-proprietary name for ACU193, we have confirmed ACU193 is a consensus IgG2 subclass antibody, which is consistent with our hypothesis that the reduced effector function of this subclass should favorably influence safety outcomes for ACU193. 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 I study, we will assess options for potential development of a subcutaneous formulation as part of our ACU193 product development plans. Though we are 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 that pipeline expansion could be a path to greater value creation in the future. On a final note, during the third quarter, we continued to expand our senior leadership team, adding Derek Meisner as Chief Legal Officer. Derek's legal career has spanned more than two decades at both biotechnology companies and investment firms, and he's 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 (CMO)

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 of Prevention of Alzheimer's Disease that outlines the design of our ongoing phase I INTERCEPT-AD trial for ACU193 and the planned criteria for advancing to a phase II/III 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 I to a phase II/III 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 II/III trial, we do anticipate it would begin with a patient sample size typical of a phase II trial. An interim analysis would then determine whether to increase the sample size to meet the statistical power of a typical phase III trial. This interim analysis may be based on several cognitive measures and various biomarkers. For example, a phospho-tau in the blood and cerebrospinal fluid. Pending discussions with regulators, if the interim analysis is positive and the trial is expanded, the phase II/III trial could potentially serve as a registration trial.

Considering the design of a phase I INTERCEPT-AD study in patients with early AD and the adaptive design of the planned phase II/III 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 III Clarity AD trial results from 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 A-beta 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 a plaque-targeting monoclonal antibody further supports the importance of these soluble 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 A-beta 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 A-beta and Alzheimer's disease is complex in that A-beta may exist as soluble species, which include monomers, oligomers, and protofibrils, or insoluble species, which include fibrils and amyloid plaques. The fact that amyloid plaques begin to deposit 15-20 years prior to the onset of cognitive symptoms is now well established.

Following the appearance of plaques, tau hyperphosphorylation 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 deposited amyloid plaques are not themselves toxic. However, we believe that amyloid plaques can be one source of the soluble A-beta 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 inhibit a normal electrophysiologic activity of brain cells known as long-term potentiation, and they disrupt neuronal function.

Considering these data together, since ACU193 and lecanemab both target similar soluble A-beta species, we believe the recent announcement of a statistically significant benefit from lecanemab in a phase III trial improves the probability of success for ACU193. Importantly, lecanemab exhibited a lower rate of ARIA-E 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 A-beta species such as protofibrils or A-beta oligomers rather than plaque directly may lead to a better safety profile. Gantenerumab's ARIA rate of 25% announced today further highlights the safety challenge with antibodies that directly target plaque. A somewhat lower rate of ARIA for gantenerumab compared to aducanumab and donanemab would be consistent with less plaque reduction for gantenerumab compared to aducanumab and donanemab.

ACU193 appears to have little or no binding to plaques based on animal studies and ex-vivo studies using autopsied 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. With that, I'll turn the call over to Matt.

Matthew Zuga (CFO and Chief Business Officer)

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 30, 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 top line data for INTERCEPT-AD in the second half of 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. With that, we can open the call for Q&A. Operator?

Operator (participant)

Certainly. Ladies and gentlemen, if you do have a question, please press star one one on your telephone. Please stand by while we compile the Q&A roster. One moment. Our first question will come from Paul Matteis of Stifel. Your line is open.

James Zemylak (President of Financial Corp and Head of Global Wealth Management)

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, you know, with the delay here. Just be great to understand, you know, I see you're kind of expanding clinical sites, but it'd be great to understand, you know, what you think is maybe causing the delay, if at all, if that's kind of what is baked into the, you know, later readout in second half 2023.

Just a second question specifically on you mentioned, you know, everything in the blinded safety data 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 signal, that'd be great. Thanks so much.

Matthew Zuga (CFO and Chief Business Officer)

Hey, 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, you know, I think many of the aspects of kind of where we are with enrollment are kind of legacy from late 2021 and early 2022. The momentum has picked up considerably, which is why we've elected to guide to completion of enrollment in the first quarter. In terms of top line results, we've traditionally guided within a six-month window and have essentially shifted to the back half of the year, you know, based on where we are in the study.

In terms of safety, I can't go further than to say that, you know, as of where we are today, we are very encouraged at what the blinded data have suggested on review, kind of standard review as the study has progressed and, consistent with kind of the original thesis for ACU193 and its safety profile on various aspects of clinical safety measures. I won't elaborate more than that, but I think we are, as I've stated, encouraged with what we have observed to date.

James Zemylak (President of Financial Corp and Head of Global Wealth Management)

Great. Thanks.

Operator (participant)

One moment. Our next question will come from Thomas Shrader of BTIG. Your line's open.

Thomas Shrader (Managing Director and Healthcare Analyst)

Good afternoon. Thanks for taking the question. I had a question on the assays to measure A-beta oligomers directly and 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? Is it something you think you could follow with time or is it a more elaborate assay? Just curious where that is in terms of being useful in a clinical trial setting.

Eric Siemers (CMO)

Well, yeah. Thanks for the question. It's a very pertinent one. That assay is under development. We have a prototype of that already, but the sensitivity is being increased. Now, I should mention that rather than trying to measure oligomers directly, what we are trying to measure is the oligomer bound to the antibody, bound to one ninety-three. The reason for that, as I think you probably know, is the oligomer concentrations are very low in spinal fluid. They're subpicomolar in range, and so you're trying to take the oligomer concentration was low to begin with, and then when it gets lower, it just becomes technically not feasible.

What we do wanna do in our study is show the target engagement and really by definition that is ACU193 bound to the oligomers. That concentration obviously will go up with dosing, and that's the assay that we're actually working on. Now, to get to the question about interim, there's no interim analysis for our phase I studies, per se. We do blinded looks at safety data routinely. But there's no formal interim analysis. Now we will do an interim analysis for the phase II/IIIs, as I mentioned, and we're still working out the details of what all might go into that. I think our target engagement really will probably come out of this phase I study.

Thomas Shrader (Managing Director and Healthcare Analyst)

I don't know that we'll need that as part of the interim in the phase II/III, but again, we haven't finalized the design of the phase II/III study yet. Okay, if I can follow up with a question from your prior life. Where are you in your thoughts on using tau pathology as a recruitment? Is that very much still in flux? Do you think it's a good idea? Is it just, you know, you're gonna be one of the next people to design a big trial? Right. Yeah. It's a very interesting question. I think, and the programs that are using tau pathology as part of an inclusion, exclusion criteria, and as you know, it's a sort of a Goldilocks approach where you have to have a little bit of tau but not too much.

Eric Siemers (CMO)

I think from a scientific standpoint, that's very defensible. I think from a practical standpoint, I'm not sure how that would play out, especially in clinical practice. I mean, the idea that you'd have to be positive for amyloid and then positive for tau, and by the way, it has to be just the right amount of tau, not too much, not too little. I think that from a practical standpoint could be quite difficult in practice, but scientifically, I understand the rationale for it. Got it. Thanks for the detail.

Operator (participant)

One moment. Our next question will come from Colin Bristow of UBS. Your line is open, Colin.

Yi He (Analyst)

Hi, this is Yi He on for Colin Bristow. Thanks for taking our question. We have two questions. The first one is that, what are you specifically looking for opinion retention to add the CTAD presentations, for example, for your competitors? The second question is that, what level of cognitive slowing do you think it is clinically relevant? Thank you.

Eric Siemers (CMO)

Thanks, Yi.

Daniel O'Connell (CEO)

Go ahead, Eric.

Eric Siemers (CMO)

Well, yeah. In terms of the CTAD meeting, I think you were referring to the presentations on lecanemab and gantenerumab, which are on consecutive days. You know, we're looking forward to those presentations. We've seen press releases for both studies. Obviously, one was positive and one was negative. To really understand the results, I think we need to see more of the data, and we're looking forward to seeing those presentations. As far as your second question about being clinically meaningful, this actually has become quite an important question I think for the field, and there's a number of efforts to understand this better, including efforts by the Alzheimer's Association.

Generally, there's been a relatively broad consensus that slowing disease progression by 25% or more is clinically meaningful. 27% for lecanemab based on that consensus number, it would cross that threshold. The other thing to point out is that, I don't think anyone expects one drug will cure this disease. If lecanemab slows progression by 27%, the next drug that's used in combination therapy with lecanemab might slow it another 25%-30%. By the time you get two or three drugs having an effect, then it will be very, very obvious that this is clinically meaningful. You have to start someplace, and you can't start with the expectation that a single drug is going to cure the disease or have some huge effect on the disease.

I think that's what the field is trying to understand right now. But, generally I personally think, and I think a lot of people in the field would think that 27% crosses the threshold for clinical meaningfulness.

Yi He (Analyst)

Thank you. Very helpful.

Operator (participant)

One moment. Our next question will come from Judah Elfenbein of Credit Suisse. Your line's open.

Judah Elfenbein (Equity Research Analyst)

Yeah. Hi, guys. Thanks for taking the questions. First, just Dan, to follow up on the enrollment commentary around, you know, issues from 2021. Is that largely COVID? Is there anything else you'd call out, whether it's, you know, competing against other late-stage trials or, you know, publicly available information from those late-stage assets?

Daniel O'Connell (CEO)

Yeah. Thanks, Judah. Yeah. I think that it's the legacy issues in 2021 were certainly COVID mediated in terms of site activation and access to patients and getting stuff.

Standing up that study in the course of that pandemic. I think we've tried to get a sense of whether, you know, to the best of our understanding our sites, we're not necessarily competing with other studies at sites per se. We are doing a phase I study in patients. I think the sort of the value proposition and the ask of, you know, getting patients enrolled, we refined that messaging in multiple formats. I think, you know, a lot of the steps that we've taken, a lot of kinda the ground game that we've rolled out in the, you know, over the course of this year has really impacted the current momentum in the study.

Matthew Zuga (CFO and Chief Business Officer)

I don't think we can attribute the current progress, and I know we're obviously updating with the shift to the back half of the year or the second half of the year, but certainly the progress is a result of lots of little things that we've gotten right over the course of this year as we've made additions to the team and explored some other avenues towards recruitment. Again, we're really encouraged with the progress and the operational kind of elements that are in play right now, which is why we've elected to guide to the first quarter enrollment.

Judah Elfenbein (Equity Research Analyst)

Understood. Just to follow up on what I think is new commentary in the prepared remarks around business development and obviously you hired a chief legal officer. Anything you could elaborate on regarding, you know, your thoughts around business development? Would it be, you know, assets, you know, that would kind of work in conjunction with 193 or farther than that?

Daniel O'Connell (CEO)

Yes, I think the color I'd add to that, Judah Elfenbein, it's a great question, and thanks for picking it up there. I mean, we did wanna make some comment in the script as business, you know, pipeline expansion has always been part of our business strategy. I think on the heels of lecanemab success, and as Eric Siemers noted, kind of what we perceive as a higher probability of success for 193, I think that the pipeline expansion criteria and priorities are more aligned with 193 going forward and looking for things that are complementary, supplemental or additive to that asset. Beyond that, we don't have a specified timeframe.

Matthew Zuga (CFO and Chief Business Officer)

I do think as we look at, you know, deployment of capital, we're pretty judicious, and I think we are looking for things that are gonna be, you know, near term, have reasonable capital requirements and also have specified milestones that, you know, would be appreciated and valued by shareholders and potential investors.

Judah Elfenbein (Equity Research Analyst)

Great. Thank you.

Operator (participant)

One moment. Ladies and gentlemen, if you would like to ask a question, please press star then zero. Excuse me, that's star one one on your touchtone telephone. Again, please press star one one for any questions. Our next question will come from Charlie Yang of Bank of America. Charlie, your line's open.

Charlie Yang (Senior Equity Research Analyst)

This is Charlie for Jeff. I guess my first question is, you know, regarding how CTAD presentation from lecanemab and gantenerumab, like, what kind of data, you know, specifically maybe more of a biomarker set that you would like to see if that can, you know, help, you know, with, you know, gaining more confidence with your asset. The second of all is, regarding the computerized cognitive function test, are there any kind of data or publication out there that can correlate that to the CDR Sum of Boxes or other kind of more of a traditional cognition measurement and which we can use, you know, to somewhat kind of extrapolate the data from the phase one result? Thank you.

Eric Siemers (CMO)

Well, yeah, thanks for that question. There's a lot to dive into there. Yeah, as far as the CTAD presentations, there are a lot of biomarker effects that we'll be interested. Things like phospho-tau in plasma or spinal fluid, I think will be important for both actually compounds, lecanemab and gantenerumab. I think one of the important things about lecanemab, based on their press release, is that at least according to the press release, they were seeing very early separations between drug and placebo in the clinical measures, even at six months, which is fairly remarkable.

Matthew Zuga (CFO and Chief Business Officer)

We'll wanna take a close look at the time course of the effect, which, and again, we haven't seen the graphs in the press release, but you expect the effect to grow over time with the disease-modifying therapy, so we'll be looking carefully for that. I think those are. There's just a lot to look at in those studies, and they will guide us in terms of the design of phase II, III. as far as your other question regarding the, I'll say, computerized battery and its relationship with the CDR, even in our phase I study, we're measuring, we're doing CDR, and obviously we're doing the Cogstate battery.

This will be a small sample size, but it'll be the first attempt to actually see how those measures line up with each other. The CDR, as you may know, there's six items. Three of those are cognitive measures, three are more functional measures. That's a little bit different than our Cogstate battery, where these are all computerized tests that, you know, you'd have to say were just cognitive measures. So there may be a little dissecting out to be done.

Eric Siemers (CMO)

Again, the reason for putting the computerized testing in the phase I study to start with is we think it should have less variability than the CDR Sum of Boxes, which does have a certain amount of subjectivity to it. Actually, especially in a small phase I study, would give us a better chance at picking up a drug signal if one is there.

Charlie Yang (Senior Equity Research Analyst)

Thank you. Just a quick follow-up. Regarding the potential timing for phase II initiation, is 2024 still, you know, roughly that time frame for the trial to initiate? Or is there gonna be some sort of delay to either late 2024 or early 2025?

Daniel O'Connell (CEO)

Charlie, we have just guided the notion that we are looking to start that phase II/III study as expeditiously as possible. We recently did receive the Fast Track designation from the FDA, which we think is gonna be kind of reaffirms our notion that ACU193 is a potentially meets a large unmet need. We'll use the Fast Track as well as I think our previously disclosed plans to have an FDA engagement principally around an end of phase II type interaction with them to discuss the merits of the phase II/III design. We obviously will need the dataset from INTERCEPT-AD as part of that briefing document, and there will be some regulatory time associated with the review and the discussion.

I think our goal is certainly to launch that phase II/III study in early 2024. I don't think we can guide beyond that, but I do think it's based on our best estimates, certainly a 2024 event, and early in the year is our stated objective internally with the team.

Charlie Yang (Senior Equity Research Analyst)

Great. Thank you.

Alex Braun (Head of Investor Relations)

Great. I think that.

Operator (participant)

I'm showing no further questions.

Alex Braun (Head of Investor Relations)

That is it for Q&A. Okay. That's it for Q&A. Thank you so much for your interest. If you should have any questions, please don't hesitate to contact us at the company. All right. Have a good night.

Operator (participant)

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