Acumen Pharmaceuticals, Inc. (ABOS) Q2 2023 Earnings Report, Transcript and Summary

Thank you for standing by, and welcome to the Acumen Pharmaceuticals Second Quarter 2023 Update Call. At this time, all participants are in a listen-only mode. There will be a brief overview followed by question-and-answer session. [Operator Instructions] Today's call is being recorded. And I would now like to turn the call over to Alex Braun, Head of Investor Relations. Please go ahead.

Thank you, Lisa. Good morning and welcome to the Acumen conference call to discuss our business update and financial results for the quarter ended June 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, our 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. Now I'll turn the call over to Dan.

Thanks, Alex. Good morning, and thanks to everyone who has joined us today. A few weeks ago Acumen presented compelling clinical data in support of ACU193, our asset for the treatment of early Alzheimer's disease. Our positive Phase I top-line results solidify ACU193's potential as a future option in the Alzheimer's treatment paradigm. The success of our novel target engagement assay, robust study design and committed execution enabled us to demonstrate convincing proof of mechanism inclusive of significant amyloid plaque reduction. ACU193 was shown to be safe with a broad therapeutic index and with attractive dosing options for our next phase of development. We believe these results substantially derisk our asset beyond our expectations at this stage in its clinical development. I'm extremely proud of our team's achievement and would like to thank our employees, asset investigators and staff and patients and caregivers for their dedication to advance ACU193 as a potential best-in-class treatment in this important field. If you have not already done so I encourage you to go to the Investors section of our website and view the webcast from July 17 with our full presentation of the INTERCEPT-AD trial Phase I top-line results. Moving forward we are firmly committed to harnessing the optionality provided by the Phase I data set. We have a knowledgeable and a depth clinical regulatory and CMC team at Acumen with significant large pharma experience in Alzheimer's drug development. Given the positive INTERCEPT-AD trial data including the observed rapid plaque reduction by ACU193 our team is working urgently to integrate the findings into both our future, clinical plans and our broader strategic priorities. We continue to analyze the data from this study and expect further biomarker data to be available in the fourth quarter. We are also finalizing our doses for our next clinical trial which Eric will discuss. We have made modest changes to our planned Phase II/III design given ACU193's ability to rapidly reduce plaque such as incorporating Amyloid PET into interim analyses. As previously disclosed, our Phase II/III design incorporates interim analyses to inform the potential 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. We continue to anticipate an end of Phase II meeting with the FDA to discuss this Phase II/III design in the fourth quarter. As mentioned on our July 17 call, we are investigating the viability of subcutaneous dosing of ACU193 as we recognize the potential attractiveness of this mode of administration to expand patient dosing options. We have made meaningful progress on this front and aim to have more details to share later this year. I should also comment that we are continuously evaluating strategic partnerships and are committed to exploring value-enhancing opportunities that advance ACU193's development and align with Acumen shareholders' interest. Before I turn the call over to Eric, I would like to emphasize the degree to which our Phase I results have elevated ACU193's profile in the field. We believe ACU193's high selectivity to bind into toxic soluble AB oligomers in the brain confirmed by our CSF target engagement assay, forges the potential to differentiate in terms of clinical efficacy. ACU193's ability to significantly reduce plaque in only three months in line with currently approved and under review anti-A-beta antibodies we believe further derisks the asset's potential to deliver efficacy. Monthly dosing provides another important point of differentiation. We intend to drive significant momentum from these timely results and look forward to sharing our progress with you as we execute against our operational and strategic priorities in the weeks and months ahead. With that, I'll hand the call over to Dr. Siemers. Eric?

Thanks Dan, and good morning, everyone. As I'm sure you can tell, we are very pleased that our INTERCEPT-AD top line results for ACU193 provided important clinical proof of mechanism data for a monoclonal antibody developed to selectively target toxic A-beta oligomers. We believe these results support our efforts to develop a best-in-class therapeutic for Alzheimer's disease. In addition to the demonstration of ACU193 bound to oligomers in CSF, our measure of target engagement we are also very encouraged by the rapid dose-related amyloid plaque reduction at our higher doses, 60 milligrams per kilogram every four weeks and 25 milligrams per kilogram every two weeks. Plaque appeared to be reduced at a rate comparable to approved or soon to be approved monoclonal antibodies at a similar time point after starting treatment, in this case around three months. The finding of plaque reduction further demonstrates the evidence of 193's activity in the brain and is a positive development given the established relationship between robust plaque reduction and slowing of cognitive decline. You will see in the data we presented that 193 also demonstrated robust dose-related target engagement 193 bound to oligomers as measured by a novel assay developed by Acumen that exceeded expectations. In fact, we observed that our higher doses approach maximal target engagement. This is a finding that we are particularly excited about given that this is the first time an oligomer-targeted antibody has demonstrated target engagement. Taken together, the decrease in plaque load seen at higher doses and clear demonstration of target engagement with oligomers, provides substantial evidence of the intended central pharmacology of ACU193 and proof of mechanism. With regard to safety 193 was well tolerated with no drug-related SAEs and overall, low rates of ARIA-E. Interestingly, we did not observe ARIA-E in six study participants, who were dosed with 193 and who were APOE4 homozygotes and we will continue to monitor this finding in our next study as a potential point of differentiation compared to other monoclonal antibodies for AD. And based on the pharmacokinetic profile observed, monthly dosing is supported. Importantly, INTERCEPT-AD provided valuable information required to design the next phase of the program, including dose selection decisions. We are currently in the process of modeling doses for our Phase 2 study arms. We have provisionally identified a high dose of approximately 50 to 60 milligrams per kilogram and are considering a mid-dose in the range of 25 to 35 milligrams per kilogram. These would be every four-week doses we are confident in our modeling algorithm and are targeting a mid-dose that lies in our target engagement Emax curve in an area where substantial target engagement occurs. This is because at that location, we can potentially observe robust target engagement with regard to Oligomers. Based on our Phase 1 plaque reduction data, we believe it is likely that the higher dose in our Phase 2/3 study will result in plaque reduction and at the lower dose plaque reduction could be demonstrated in a longer-term study. Finally, as far as broader sentiment in the Alzheimer's space, we attended the Alzheimer's Association International Conference in Amsterdam this July and the general tone of the meeting was very positive. With one monoclonal antibody now having traditional FDA approval and a second antibody likely to achieve traditional approval, after decades of attempting to develop disease-modifying therapies for Alzheimer's disease, the field is now seeing early successes. While these new treatments are not a cure for Alzheimer's disease they represent a substantial step forward for patients and families. We at Acumen hope to further advance disease-modifying treatments for Alzheimer's disease by developing ACU193 as a best-in-class treatment option. And with that, I'll turn the call over to Matt.

Thank you, Eric. Good morning, everyone. As a reminder, our second quarter 2023 financial results are available in the press release we issued this morning and in our 10-Q that will be filed later today. As of June 30, we had approximately $172 million in cash and marketable securities on our balance sheet. Following the announcement of our positive Phase 1 results in mid-July, we closed an upsized follow-on offering, which brought in net proceeds of approximately $122.2 million. Our cash on hand is expected to support our clinical -- our current clinical and operational activities into the second half of 2026. Importantly, we believe that we have enough runway to complete a Phase 2 stand-alone study. As highlighted in our risk factors this timeline could be affected by clinical trial enrollment rates and other variables as is typical in the course of clinical development. R&D expenses were approximately $9.1 million in the second quarter of 2023, the increase over the prior year was primarily due to increased costs related to personnel consulting and other items related to the Phase I clinical trial which we completed during the quarter. G&A expenses were $4.3 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 $13.5 million in the quarter. We are encouraged by the strong support for the development of ACU193 following our positive Phase I results and will remain financially disciplined as we use our capital to advance our clinical program for the asset and deliver value to patients and shareholders. And with that, we can open the call for Q&A. Operator?

Thank you. [Operator Instructions] And our first question today will be coming from Colin Bristow of UBS. Your line is open.

Hey, can you guys hear me okay?

We can, yeah.

Good morning, guys, and thanks for taking the question. So I was just wondering, what additional analyses if any and sort of referring to CSF and plasma biomarkers have you done since your top line? And anything you can perhaps share with us? And if not, what sort of additional updates and analyses can we expect over the next 6 months to 12 months? And then just maybe since 193, have a mechanistic profile which is now sort of close to approximate to lecanemab, can you maybe just again just take us through how you see or what you expect to be the key points of differentiation versus lecanemab? Thank you.

Well, great. Yes. So, this is Eric. And as far as the biomarker question, it's a really prudent question. As you well know, CSF and plasma biomarkers is a rapidly developing field. And we've all along said that, we are going to follow the field carefully and send off the biomarkers that appear to be the most promising. And so we didn't have all that prearranged at the time we did the study. But what we've now done, and we're in the process of finalizing is establishing contracts to look at biomarkers to ship the samples to get the results and those results will come in later in the year. So we'll look at the kinds of things that appear to be promising in the field right now. So you probably know the A-beta 42 to 40 ratio, especially in CSF, but also in plasma is receiving a lot of attention P-tau P-tau217 is we're receiving a lot of attention. We think that GFAP, because it represents astrocyte function could be very interesting along with neurogranin because it reflects synaptic function. So we'll be sending the CSF and plasma samples out for those assays. In terms of what results, we might anticipate this was a short study. People got at most three doses of drug and so it's possible that we would see a drug effect but not necessarily likely. So the biggest reason for doing these assays in this study is to provide experience for the next studies when those biomarkers will actually be very crucial in the development program. So we may see a drug effect in this study. We may not but the important thing is we'll have then the experience with these assays to apply to our next study. With regard to differentiation, I think I'll just turn that one back to Dan.

Sure. Thanks, Eric, and thanks Colin for the question. I think in terms of differentiation to lecanemab, we're looking at both dimensions of safety and efficacy. With some basis for that supported in the INTERCEPT-AD study, but also most importantly the next study being the one to really provide clinical proof of concept and maybe a path towards registration. And those will be -- the ability to push those and have better therapeutic coverage over toxic A-beta oligomers is an important aspect of this. And I think, the general selectivity for 193 as we reported is 500-fold selective for oligomers over monomer and roughly 90-fold selected for oligomers over fibrils. So we think that, the approach that we're taking is to demonstrate comparable or better safety profile. But ultimately, we're really looking to drive clinical benefit in terms of efficacy and that would obviously be a key point of differentiation within the field.

Great. Thank you very much.

Thank you. And one moment for our next question. And our next question is coming from Paul Matteis of Stifel. Your line is open.

Hi, there. Thanks for taking my question. I wanted to clarify some of the comments you made around the 25 to 35 mg per kg once-monthly dose that you're planning. What exactly do you expect as it relates to plaque reduction from that dose level? You obviously saw plaque reduction at 25 every other week in this study. And I think in your prior comments, you had talked about CSF exposure data from earlier in this trial supporting that sufficient drug levels were still on board out to I think three weeks that you were hopeful in monthly. And so certainly encouraging that you're pursuing monthly, but I guess what's the gap there for why you wouldn't expect this dose to match as well on plaque reduction of some of the other A-beta antibodies?

Yeah. I guess I can take that. This is Eric. We've spent a lot of work obviously looking at doses for the next study. And we are narrowing down the range as you point out, but we haven't finalize those. So one of the things to be aware of and this is a little bit of an anecdote, but when we first designed the INTERCEPT study our Phase I study there was a post-dose PET scan in there and a few people with the Acumen said well why do you need that? We don't target plaque. And my reply was that's the theory, let's find out what happens. And so when we got the data, we saw -- we did see this plaque reduction at the higher doses. And I think it's just an important lesson for drug development generally is don't expect that you know what the results are going to be, but you have to look for those results. And so that's really exactly what we're going to do actually even for both doses in our next study. So I think at the higher dose based on our INTERCEPT data, we have a pretty high likelihood that we'll see plaque reduction at that higher dose. At the lower dose, we really will see what we get. We got some plaque reduction at 25 mg per kg, but every two weeks so a total of 50 mg per kg every month, but that was only with three administrations of drug. So the next study will be 18 months. So it will be a longer study. And we'll see what will happen to plaque at that lower dose. Now again, our target is actually merger our original target. The plaque reduction is -- it's not a bad thing, but it's not necessary for us to have efficacy or at least that's our view. And so I think it's -- this is like to do the studies to get the results. And so whether we'll see plaque reduction at the lower dose or not, I think is an open question at this point. But either way, once you get into a Phase II/III study, it's all about clinical efficacy and that's what you really need to be starting to focus on. So it's a great science experiment. We're going to do it, but we're also sort of shifting to where the emphasis is going to be on some of the clinical measures.

Okay. Thanks, Eric. Appreciate it. And then just one question on the subcu. I know it's early but based on some of your preliminary modeling work what do you think you might be looking at in terms of the range of different drug volumes you might test and also the frequency of potential injections?

Yeah. Thanks, Paul. I'll hear that. I mean I think it's a little early for us to comment on the -- those details. Sorry, there's a little feedback. So in the fourth quarter this work is ongoing. We've got good insights since where we're headed. I do think that the -- we do not anticipate a high dose of 50 or 60 mg per kg to be available to subcu format. I think we could be clear on that, but I do -- but we'll have more details I think on precisely the plan and how we expect to proceed with the subcu in the fourth quarter.

Okay. All right. Thank you.

Thank you for your question. And our next question will be coming from Tom Shrader of BTIG. Your line is open.

Good morning. Thanks for taking the call. Given the robustness of your oligomer binding assay how interested are you in the level of 193 you need to saturate a oligomer once plaque has gone? And do you think you'll get those data from the next trial? And then a second inclusion trial is, how appealing is to do some screening for tau. I think Lilly has shown or suggested you can really increase the separation between treated and untreated if you screen for tau.

So yeah, thanks Tom for the question. And in terms of essentially being an antibody excess versus oligomers, I mean that's something that we've spent a lot of time thinking about. One sort of detail that I think it addresses the point is that if you take 193 the antibody and just spike it into spinal fluid from a person with Alzheimer's, you get a little bit of a signal on that target engagement assay, but not very much. But when you give it to people intravenously and then it obviously goes through bringing interstitial space and whatnot you get a much bigger signal. So it tells us or at least I would think that that means that it's going through a compartment where the oligomer concentrations are substantially higher than in CSF, which I think intuitively makes a lot of sense. So in terms of when are you really in antibody excess, so you're talking about an antibody excess in a compartment bringing interstitial fluid that you can't directly sample. So it's a tricky thing to figure out. We do know that -- and we are constantly doing additional analyses on these data. But if you look at plaque load with regard to target engagement signal, there's no relationship there. There was some thought that maybe the oligomers were sort of attached to the plaques and the more plaque had at baseline the bigger target engagement signal you would get. And there's no real clear evidence that that's the case. So these oligomers are in a compartment that appears to be independent really of plaque, but it's different than spinal fluid. So the team is working on an assay now to look at free oligomers in spinal fluid with all the caveats with spinal fluids not really the compartment where the action is. But the team is working on an assay to do that. It's technically really difficult oligomer concentration in spinal fluid are really low or less than two peak amolar to start with. And then with the antibody they'll become even lower. So it's technically a difficult thing to do, but the team is working on that. And then, the other thing just briefly is in terms of tau and using that to select patients. That again which obviously is what Lilly did it's a really wonderful science experiment. I'm not sure, how that will play out in terms of clinical medicine because that means that people have to be amyloid positive based on a PET scan or spinal fluid. And then on top of that you have to be tau positive but right in the right range of tau positive and basically, it means that one out of 10 people that you screen for the therapy will be essentially eligible for it. So it's a really interesting from a scientific standpoint. I'm just not sure that practically that would be something you could do in the clinic. So we're going to obviously look at tau at baseline and see if that co varies with efficacy and all of that. But we have made the decision not to include tau as it includes an, exclusion criteria. We will of course make amyloid positivity and an, inclusion/exclusion criteria, but we're not going to specify a certain level of tau.

Great. Thanks for the thoughtful answers.

Thank you. One moment for the next question. And our next question will be coming -- one moment please. Our next question will be coming from Pete Stavropoulos of Cantor Fitzgerald. Your line is open.

Hi Dan, Matt and Eric. Thank you for taking our questions. So now that you've had several weeks to socialize the data internally and externally. Just curious to, hear if your thoughts have evolved in terms of possible reasons from a mechanistic standpoint on the lack of ARIA in ApoE homozygotes and observed only in females. Is it by chance, or is there some plausible mechanistic reasoning? Thank you.

Yeah. That's a great question too. In terms of just occurring in females, I honestly don't have a good explanation for that. It could be [indiscernible]. We'll see, I mean Alzheimer's disease is a bit more common in females, but still I don't have off the top answer on that. In terms of the ApoE homozygotes there was a preprint of a paper that just came out this week that actually showed that people who were ApoE4 carriers had a different morphology to their plaque than people who are non-carriers which would suggest that one possibility is that ACU193 targets an epitope that's maybe a little bit different than the plaque targeting antibodies that have this relationship between ARIA and ApoE. So the first thing - well and the other thing even in terms of the homozygotes observation, I mean this is a small sample size Phase 1 study we need to see if it replicates, but if it does replicate I think that is a clear point of differentiation for ACU193. And we'll have to have a lot of further discussions about what the mechanism might be but it clearly would differentiate ACU193.

All right. Thank you for taking my questions.

Thank you. One moment for the next question. And the next question will be coming from Judah Frommer of Credit Suisse. Your line is open.

Hey, guys. This is Nick on for Judah. Thanks for taking our question. So with lecanemab reimbursement and post-infusion monitoring seemingly getting more traction recently we're just wondering, what's the read-through for 193 at the safety profile that we saw last month holds up. I know we were just talking about differentiation from lecanemab but I just wanted to just to confirm is the ARIA occurrence that we see with lecanemab is that the right bar that you'd be looking to be with 193? Thanks.

Yes. Thanks, Nick. I mean that – I think clearly we do think that the ARIA rate for lecanemab is the benchmark for sort of a safety profile in the syndication. And we think 193 can be as good or better on that score. So that is our intent to demonstrate that in a longer duration study.

Thank you. And our next question. Our next question is coming from Charlie Yang of Bank of America. Your line is open.

Hey, Charlie.

Hey, sorry I think I missed that earlier. Yes. Thanks for taking the question. This is Charlie for Jeff. I have two questions please. First can you clarify regarding the reason for not specifying at the donanemab [ph] I mean I understand that it's scientifically interesting, but I think given the consistency in terms of what Lilly has shown with the trial, as well as I guess somewhat more of a preliminary post-hoc data with lecanemab that also show some favorability in terms of the efficacy in the kind of lower to intermediate tau patients. I'm just wondering would it make sense to have that as an inclusion or exclusion quite to actually improve the probability of success? That's number one. And number two can you just discuss the kind of like the cash rate that you have I think just given how long the trial will run for Phase II it seems like by the end of the – by the end of cash way that's kind of around the timing when you'll end up with your cash. So what's the – I guess what's the outlook in terms of kind of doing another race or perhaps having some sort of partnership prior to the actual readout?

Yes. So thanks, Charlie. Yes Eric, if you want to hit the first one I can – Matt or I can take the second.

Yes, yes exactly. So yes, again, in terms of using tau as an inclusion, exclusion criteria, which essentially and we'll see what the label ends up being for donanemab but more than likely you'll have something in the label that will track with that. Again, I think it's a great science experiment. I don't think – I think it will be a real challenge in terms of making that work in the world of clinical medicine. Now what we are doing in our study and so our patient population is in early Alzheimer's disease, right? And so these are people with either MCI or mild dementia, but not beyond that. So, the lowest minimal score you can have is 22, for instance. We've also -- and this is some ongoing analyses that we're doing is in our INTERCEPT study, we actually used a hybrid model of looking at amyloid positivity. So, it wasn't just based on a PET scan SUVr it could also be based on a visual read, which may actually be able to allow you to pick up people who are amyloid positive, but not so blatantly that they cross an SUVr threshold. And so that I think will help us dial in, with this milder population without having to take the extra step of a tau PET scan. Now looking to the future, and I don't think the field is there just yet but there may be some time in the future when one of these plasma tau assays could be useful. And we'll obviously, continue to track that. But in terms of our next trial, which is a Phase II/III so if it becomes a Phase III trial that's a registration trial, we have to make that mirror clinical practice as it exists more or less today. And so, that was the overall thought process in terms of the design of the Phase II/III trial. So, for the cash question.

Yes. Thanks. So, Charlie at the current time, we have runway through the interim readouts anticipated for our Phase II/III study based on our current assessment today. We believe, that we have enough from way to finish a Phase II stand-alone study, should we not expand it to Phase III following a positive interim analyses. Of course, the timeline could be affected by the pace of clinical site initiation, enrollment rates, et cetera. But generally, based on our current planning we do have a cash runway through a stand-alone Phase II study subject to the qualifiers that I mentioned. In terms of partnering, we think the optionality of using a Phase II/III design with the potential to expand the Phase III. As I mentioned earlier on the call is, the fastest potential path to a BLA filing and potential approval and we would anticipate and continue to have engagement from prospective partners, as to potentially working with us particularly in terms of the Phase III portion of the development of ACU193. So, those things are kind of part of our bread and butter of our strategy, and will continue to evolve over the course of the next year itself.

Great. Thanks so much

Thank you. This concludes the Q&A session. I don't see any more questions in queue. And I'd like to turn the call back over to management, for closing remarks.

Great. Thanks, Lisa. Thank you everyone, today for listening in. We here at the company are always available, if you have further questions.

This concludes today's conference call. Thank you all for joining. You may now disconnect. Everyone, have a great day.