ACELYRIN, Inc. (SLRN)·Q2 2024 Earnings Summary

Executive Summary

• Q2 2024 delivered a clear strategic pivot: positive Phase 3 HS readout for izokibep (HiSCR75 met at 12 weeks) alongside a refocus to lonigutamab (TED) and a ~33% workforce reduction to extend cash runway to mid-2027 .
• Financially, operating expenses rose YoY on higher clinical and manufacturing spend; net loss was $85.7M and diluted loss per share was $0.86; cash and short-term securities were $635.2M at 6/30/24 .
• Guidance: year-end 2024 cash expected at $420–$450M, cash runway extended to mid-2027; restructuring cash charges ~$4.5M; trial completion costs $30–$35M; izokibep CMC commitments $55–$85M; a $31M Pierre Fabre option payment expected in H2 2024 .
• Pipeline catalysts: lonigutamab Phase 3 program targeted to begin in Q1 2025 (post EOP2 FDA meeting); izokibep uveitis top-line expected in Q4 2024; potential partnering for izokibep (HS/PsA) under evaluation .
• Stock narrative drivers: positive HS efficacy (HiSCR75/90/100), clean safety profile (no candida), capital discipline, and clearer path/pace to lonigutamab registration; the suspension of new izokibep HS/PsA trials and discontinuation of SLRN-517 are near-term overhangs but support extended runway .

What Went Well and What Went Wrong

What Went Well

• Izokibep Phase 3 HS met primary endpoint HiSCR75 at 12 weeks (33% vs 21% placebo; p=0.0294) with strong higher-order responses: HiSCR90 (25% vs 9%; p=0.0009) and HiSCR100 (22% vs 8%; p=0.001); preliminary Week 16 data showed deepening responses .
• Safety consistent with prior experience; notable absence of candida, liver toxicity, and suicidal ideation/behavior; most common AEs were mild–moderate injection site reactions .
• Strategic capital discipline: focusing future investment on lonigutamab with planned Phase 3 initiation in Q1 2025 and cash runway guidance to mid-2027 enabling funding through BLA-enabling activities; “extend our cash runway to mid-2027 and fully fund both Phase 3 trials for lonigutamab” .
• Management quote: “We met the primary endpoint of HiSCR75 and are especially pleased with the compelling response rates in HiSCR90 and HiSCR100 within 12 weeks” (Mina Kim) .
• Management quote: “Izokibep…appears to have the optimal to offer deep clinical responses across multiple HS domains…we are very pleased to have successfully delivered this positive Phase III trial” (Shep Mpofu) .

What Went Wrong

• New trials in izokibep HS and PsA suspended; SLRN-517 internal development stopped—reducing breadth, though helping runway; workforce reduction of ~33% implemented .
• Injection site reactions were frequent (≈65% izokibep vs 8% placebo), albeit mild–moderate; discontinuation delta ~7% at week 12 (≈20% izokibep vs ≈13% placebo) .
• Operating expenses increased YoY; net loss widened materially vs Q2 2023; the company also disclosed material weaknesses in internal controls (Q1 2024), a continuing governance focus area .

Financial Results

Income statement snapshot (USD Millions unless noted):

Balance sheet snapshot (USD Millions):

Notes:

• SLRN is pre-revenue; margin metrics are not applicable given zero revenue .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We met the primary endpoint of HiSCR75 and are especially pleased with the compelling response rates in HiSCR90 and HiSCR100 within 12 weeks” — Mina Kim, CEO .
• “Izokibep…appears to have the optimal to offer deep clinical responses across multiple HS domains…we are very pleased to have successfully delivered this positive Phase III trial” — Shephard Mpofu, CMO .
• “We now project our cash runway to mid-2027…fully fund the lonigutamab development program through BLA filing” — Gil Labrucherie, CFO/CBO .
• “We plan to meet with the FDA later this year and then host an investor presentation to provide additional Phase II data and details for the planned Phase III program” — Mina Kim, CEO .

Q&A Highlights

• Dose/regimen confirmation: addition of 70mg cohort (Q3–Q4 weeks) in Phase 2 to finalize Phase 3 dose; not contemplating a loading dose; confidence in 70mg as target dose .
• Izokibep partnering optionality: open to all options; runway guidance excludes any partnership proceeds; potential to continue UV internally contingent on data .
• Uveitis endpoint framework: trial mirrors HUMIRA design with multi-parameter inflammation and BCVA endpoints at week 24; intent to pursue registration if compelling .
• Safety clarifications: no audiogram changes or sensorineural hearing loss in lonigutamab cohorts; transient tinnitus observed; injection site reactions common with izokibep but mostly mild .
• Cash and pipeline expansion: room for opportunistic BD but focus remains on lonigutamab execution; year-end cash and mid-2027 runway reiterated .

Estimates Context

• Attempts to retrieve Wall Street consensus EPS and revenue estimates via S&P Global were unavailable due to a CIQ mapping issue for SLRN; therefore, beat/miss vs consensus cannot be quantified this quarter (Values retrieved from S&P Global).
• The company remains pre-revenue; EPS and net loss trends are best compared against company-reported YoY and QoQ figures .

Key Takeaways for Investors

• Positive HS Phase 3 results de-risk izokibep’s efficacy profile; expect UV top-line in Q4 2024 to further shape asset optionality and partnering dynamics .
• Lonigutamab’s accelerated path (direct to Phase 3 in Q1 2025 after EOP2) tightens timelines for potential registrational data in 2026 and BLA thereafter; management is focusing capital here .
• Extended runway to mid-2027 is meaningful; monitor execution on restructuring and mitigation of $55–$85M CMC commitments, $30–$35M trial completion costs, and $31M option payment in H2 2024 .
• Near-term trading catalysts: investor event post FDA EOP2 meeting (lonigutamab), UV top-line in Q4 2024, partnering announcements for izokibep HS/PsA; positive sentiment could hinge on UV success and TED Phase 3 design robustness .
• Risks: higher OpEx and widening losses YoY; material weaknesses in controls (Q1) remain a watch item; portfolio contraction (SLRN-517 discontinuation; suspend new HS/PsA trials) narrows diversification but supports runway .
• Strategy: capitalize on strong HS efficacy and clean safety to maximize izokibep value via partnering; retain focus on optimizing lonigutamab dosing and convenience to differentiate in TED .
• Positioning: for medium-term, thesis revolves around execution of TED registrational program and monetization of izokibep; for short-term, UV readout and investor event are key narrative inflection points .