Hello and welcome to the Eledon Pharmaceuticals Third Quarter 2021 Earnings Call and Webcast. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to CFO, Paul Little. Please, go ahead.

Good afternoon, and thank you for joining Eledon's third quarter 2021 financial results conference call. Joining me today is David-Alexandre Gros, Chief Executive Officer; Steven Perrin, President and Chief Scientific Officer; and Jeff Bornstein, Chief Medical Officer. Earlier today, Eledon issued a press release announcing financial results for the third quarter ended September 30, 2021. You may access the release under the Investors tab on our company website at eledon.com. Before we begin, I would like to remind everyone that statements made during this conference call relating to Eledon's expected future performance, future business prospects or future events or plans may include forward-looking statements, as defined under the Private Securities Litigation Reform Act of 1995. All such forward-looking statements are intended to be subject to the Safe Harbor protection provided by the Reform Act. Actual outcomes and results could differ materially from these forecasts, due to the impact of many factors beyond the control of Eledon. Eledon expressly disclaims any duty to provide updates to its forward-looking statements, whether as a result of new information, future events or otherwise. Participants are directed to the risk factors set forth in Eledon's reports filed with the U.S. Securities and Exchange Commission. It is now my pleasure to pass the call to Eledon's CEO, Dr. David-Alexandre Gros. DA?

Thank you, Paul, and thank you all for joining us this afternoon. We formed, what is now Eledon, just one year ago, when we acquired Anelixis and concurrently executed a financing with leading life science investors. Since then, we have built a world class team and strove towards initiating clinical trials in three therapeutic areas; transplantation, focusing on kidney and islet cell transplantation; auto immunity, focusing on IgA nephropathy; and neurodegeneration, focusing on ALS. I'm proud of the progress our team has made over the past year and especially the past months, underscoring our focus on operational execution. Specifically, we are nearing completion of enrollment in our Phase 2 trial of AT-1501 in adults with ALS, with 16 of 18 subjects enrolled in the fourth and final cohort. We received a no-objection letter from Health Canada, allowing us to initiate our open-label clinical trial evaluating AT-1501 in kidney transplantation and we are in the process of opening our first site in Canada. We received IND clearance from the FDA to proceed with a clinical trial to assess the safety and efficacy of AT-1501 in the prevention of rejection in patients undergoing islet cell transplantation for the treatment of Type 1 diabetes. We initiated an AT-1501 monotherapy kidney transplantation study in non-human primates as requested by the FDA in advance of a potential IND application for AT-1501 in kidney transplantation in the United States. We announced a research collaboration with CareDx, a world leader in transplant diagnostics and services and we've recently announced IgAN as the next indication for development of AT-1501 and remain on-track to begin opening sites for the Phase II study by the end of this year. And finally, we presented additional data at the International Pancreas and Islet Transplantation World Congress from our nonhuman primate islet transplantation…

Thank you, DA. As a brief reminder our lead asset AT-1501 is an IgG1 anti-CD40 ligand antibody lacking Fc effector function. Physiologically the interaction of CD40 ligand and CD40 results in T and B-cell clonal expansion, antibody production and secretion of pro-inflammatory cytokines that amplify an immune response. The CD40/CD40 ligand pathway is an attractive drug development target, because the engagement of these receptors plays a pivotal role in immune system activation by mediating both antibody and cellular immune responses. Our programs are centered around development of antagonistic antibodies that target the ligand rather than the receptor since inhibition of the ligand has shown greater efficacy in preclinical models of autoimmunity, as well as, in the prevention of acute and long-term allograft transplant rejection in animal models. I'll begin my program updates with ALS, our most advanced indication. Previous research has found the costimulatory pathway to be an overactive pathway involved in more than half of people with ALS. Preclinical work has demonstrated that stopping or delaying immune system activation by inhibition of CD40 ligand can improve muscle function, slow disease progression, and improve survival in an ALS animal model. This provides strong scientific rationale for the development of AT-1501 in this challenging indication. We're in the midst of a 12-week open-label dose escalating study enrolling up to 54 patients at 13 sites in the United States and Canada. Enrollment in the fourth and final cohort is nearly complete with 16 of 18 patients enrolled and remain on track to report data from this study in the first half of next year. Data that we are looking to obtain include safety and tolerability as well as multiple categories of biomarker endpoints, with each subject serving as their own control by comparing changes from baseline. And the first category of biomarkers…

Thank you, Steve. In addition to the financial results summarized in our press release, you can find additional information in our Form 10-Q, which we will file there today. The company reported a net loss of $9.8 million or $0.66 per share for the three months ended September 30 2021, compared to a net loss of $6.1 million, or $5.31 per share for the same period in 2020. Research and Development expenses were $7.7 million for the three months ended September 30 2021, compared to $615,000 for the same period in 2020. The increase in R&D costs primarily reflect clinical and CMC activities as we advance AT-1501 programs. G&A expenses were $2.8 million for the three months ended September 30 2021, compared to $3.7 million for the same period of 2020. The decrease in G&A reflects prior year restructuring charges totaling $2.2 million, partially offset by increased personnel and stock-based compensation costs, legal and other professional fees in the current period. I'll turn to a few key financial metrics for the full year-to-date. The company reported a net loss of $25.7 million, or $1.73 per share for the nine months ended September 30 2021, compared to a net loss of $1.9 million or $16.81 per share for the same period of 2020. Research and Development expenses were $17.6 million for the nine months ended September 30 2021, compared to $3.1 million for the same period in 2020. The increase in R&D costs primarily reflect clinical and CMC activities as we advance AT-1501 program. G&A expenses were $9.9 million for the nine months ended September 30 2021, compared to $6.7 million for the same period last year. The increase in G&A spend primarily reflects increase personnel cost, stock-based compensation expenses, legal and other professional fees. The company had $94 million in cash and cash equivalents as of September 30th compared to $101 million in cash and cash equivalents as of June 30th 2021. We expect our financial resources to be sufficient to fund operations as currently planned well into 2023 thereby allowing us to generate data across all of our currently planned trials and still have a year of cash on hand. With that financial update, let me turn the call back over to DA.

Thank you, Paul. We have made significant progress during the third quarter advancing our lead molecule AT-1501 with our nearly completing enrollments in our ALS Phase 2 study and are receiving regulatory clearances to begin clinical trials for Kidney Transplantation in Canada and Islet Cell Transplantation in the United States. We're now approaching what should be a very busy year of sequential clinical data readouts in 2022 including for our Phase 2 ALS study followed by interim data readouts for our Islet Cell Transplantation, Kidney Transplantation and IgAn trials. With that, I will now ask the operator to begin our Q&A session, Operator?

Thank you. And I'll be conducting a question-and-answer session. Our first question today is coming from Alethia Young from Cantor Fitzgerald. Your line is now live.

Hey guys, thanks for taking my questions and congrats on the forward progress here. I guess on the ALS front I'm curious about if you think neurofilament light chain could potentially be like a biomarker that maybe a regulatory body recognizes? And then to that point kind of what kind of -- can you frame kind of what kind of levels and what might be interesting like what baseline level people have and how you think about that there's any kind of information related to that? And then, on IgAN, I guess obviously there are some medicines in development there. So I guess I kind of wanted to talk about how you think CD40 mechanism might be differentiated versus some of the other players out there in the universe? Thanks.

Alethia, thank you for the questions, let me turn it over to Steve to talk about ALS and IgAn.

Great question on neurofilament Alethia, as you know neurofilament light chain is a fairly new biomarker in neurodegeneration not just ALS but multiple sclerosis and Alzheimer's and others as well. Historically we know from lots of studies, that neurofilament light chain is elevated in adults with ALS. But the levels are very variable and they tend to correlate with prognosis more than anything at this point, where at time of diagnosis if you have high levels of neurofilament light chain you tend to be a fast progressor and if you have lower levels of neurofilament light chain you tend to be a slower progressor. The only data we have with therapeutic intervention at this point is the recent data from Biogen with their antisense oligonucleotide that's been in Phase 2 studies in adults with ALS. And there they showed decreases in neurofilament light chain, but they didn't necessarily correlate with clinical outcomes or survival. So we all agree I think in the community in neurogeneration that neurofilament light chain is a marker of neuron health and ends up in CSF in circulation. But therapeutically we need to demonstrate that that does correlate with other biomarkers such as pro-inflammatory markers, as well as clinical outcomes and that's one of the goal of the exploratory component of our study. Did that answer your first question on ALS?

Yes that's helpful. It seems like -- yes you did the correlation as it's not really hard fast numbers and reductions that you kind of have to see what you see since the Biogen data kind of a little bit confusing?

Yes. I mean it's -- we're doing a 12-week study which may not be a long enough duration of treatment to impact neurofilament light chain or clinical outcomes in ALS, but it would be an incredible finding, if there was a correlation between reduction in pro-inflammatory markers neurofilament light chain, as well as disease progression. We'd be the first company to really show that a change in pro-inflammatory markers with therapeutic intervention could correlate with a change in neurofilament light chain level. So that would be a very big finding if we ended up hitting that one.

Okay. That’s helpful.

And your question about IgAN with mechanism so I'll just review the scientific part of that answer. So as far as differentiation goes, I mean there's a pretty well-validated model of IgA nephropathy as far as the pathophysiology. It's a multiple hit model where the first hit is deficiencies in the enzymes that actually put appropriate sugars on IgA and those deficiencies result in a improperly glycosylated IgA that is recognized by the immune system because it's foreign. And that's really step two in the process where the antibodies are made and recognized and made by B cells towards that improper sugar IgA. Ultimately that results in a mean complex formation in circulation. You get complexes that have recognized that protein that's not normal. And those end up getting deposited in the kidney over time and that's what results in kidney damage in proteinuria being present in the urine and then progressive fibrosis and further damage to the kidney chronically over time. So other therapeutics that are in clinical -- therapies that are in clinical development that are targeting various aspects are not hitting all aspects of that multiple for hit process. And blocking CD40 ligand in theory should hit three out of the 4. It should -- because it inhibits class switching at the IGM level it should lower overall production of IgA. So there's not as much IG around to be misglycosylated. Secondly because blocking CD40 ligand blocks B-cell maturation germinal cell formation and antibody production it will ultimately result in less immune complex formation in circulation because you're not going to make antibodies. You're not going to recognize that that misglycosylated IgA is foreign, so there'll be less immune complex formation in circulation. And then ultimately even after deposition in the kidney, blocking CD40 ligand has been showing because it blocks pro-inflammatory differentiation of T cells and cells of the monocyte lineage you'll get less immune cell infiltrate into the kidney and thus you'll get less progressive damage in fibrosis, as the result of deposition of immune complexes that might be there. So, we think that blocking CD40 ligand compared to other modalities in the clinic block three of the four hits.

Great. That's helpful. And then just another one. On the primate study have you guys said how many primates you need to enroll or anything about that or where you're in that? Thanks.

So we said that the guidance we received was that we needed a minimum of four non-human primates. And as we've -- we just announced today, we have begun to trial. So we have begun doing kidney transplantation on the primates.

Okay. Thanks.

Thank you. Our next question is coming from Thomas Smith from SVB leerink. Your line is now live.

Hey, guys. Thanks for taking the questions and congrats on all the progress. A couple of questions. I guess, first just want to -- let you know sounds like you're making some good progress there on enrollment. Just in thinking about some of the efficacy markers you're measuring in the study. Obviously you called out neurofilament light chain, and I appreciate the color on that. In terms of some of the other exploratory endpoints, you know, things like changing ALS FRS respiratory function, can you just help frame I guess what you'd been looking for within the 12 week treatment period understand that the short treatment period, but it is essentially any signal on this functional endpoints would be considered, you know, a positive signal in your view? And then maybe secondly, turning to the islet cell program and the US IND clearance? Can you just give us a little more color on how you're thinking about enrollment in the US? Obviously, islet cells still considered an experimental procedure in the US. Just want to get your sense for how many study sites you think you could target. And I guess your sense of expectations relative to your expectations for enrollment in Canada?

Sure, so maybe, let me start by turning it over to Steve to talk about ALS. And then I can take over and talk about islet cell. But thanks a lot for your question, Tom. It's so good to talk to you.

Tom, the question ALS for the exploratory endpoints -- clinical endpoints. As you know, a 12-week study in ALS is fairly short. ALS is really heterogeneous disease as far as disease progression. And at time of diagnosis, it's very difficult to understand the differences in progression rates. So in a 12 week study, we would probably be surprised to see significant changes in ALS for us across the cohort or respiratory function or muscle function. Typically, those types of clinical endpoints are looked at as endpoints in longer studies, six months, 12 months, 18 months are study durations where typically we'd be looking at those types of clinical endpoints for ALS. So if we saw something, it'd be incredibly exciting, especially if you're correlated with any of the biomarkers that we've described. But in such a short study, it would be I'd be surprised if we see something there.

Does that answer your question, Tom. The primary focus here is going to be obviously around safety and tolerability, but then looking for changes in terms of inflammatory biomarkers. And maybe Steve, do you want to add some color on the inflammatory biomarkers we're looking at and in what's been historically found in ALS?

Yes. So two types of markers that we're looking for that's directly related to immune cell function. One is target engagement, as I mentioned on the call, blocking CD40 ligand has a very profound effect on B-cell development in germinal cell formation. And it can really block many of the chemokines that are associated with that aspect of an antibody response. So we can measure target engagement by looking at B-cell markers, including CXCL13 which is a potent chemokine associated with B-cell activation. For the pro-inflammatory markers, and I mentioned TNF alpha IL-6 MCP-1 as examples. There's a long, long history going back decades of people measuring pro-inflammatory markers in patients with ALS in not only the clinical setting, but just in general studies and those have been very well characterized. So because of the fact that, those are elevated and they're pro-inflammatory, if we block CD40-ligand signaling and block pro-inflammatory differentiation of T cells and B cells we should see a decrease in pro-inflammatory markers like TNF alpha IL-6 MCP-1 and others.

Got it. Got it. Okay. Super helpful color on ALS. And then on islet cell?

Great. On islet cell, as you mentioned islet cell transplant is considered experimental here in the US. And so a path forward for clinical trial in this country is a big step forward for us. In terms of the design, we'll start – and right now the plan will be to start with a single site in the States. In terms of enrollment, as you've seen with us, and as we've seen with some other ICT trials that are being done enrollment has been relatively slow. What's good here is that, we need a few patients in order to be able to have some data that could be meaningful, and that data can come relatively quickly. So we're looking forward to getting our first patients, hopefully, enrolled in the US and Canada. And once they get enrolled, once they get transplanted, what's nice is that within about 90 days we'd be able to see how well grafts are doing. And so the impact that AT-1501 might be having in terms of protecting that graft and potentially allowing patients to be insulin dependent. In terms of opening the US site, we just recently got the feedback from the agency. So we'd expect that site to open probably towards the middle of next year.

Understood. All right. Thank you guys for taking the questions, and thanks for the – thanks for the color.

Thank you.

Thank you. Our next question is coming from Matt Kaplan from Ladenburg Thalmann. Your line is now live.

This is Raymond in for Matt. Thanks for taking our question. Congrats on all the progress. Just I guess maybe just a quick question on the islet cell transportation program. I was wondering, I guess, since you have a US site and a Canadian site, would the data readout be kind of combined, or would it be similar to the initial Canadian design for the US trial?

Let me turn – first Raymond, thank you very much for the question. Let me turn that over to Steve or Jeff, just talk about the similarities between the programs.

Yeah. Jeff, you're on the call the protocols are slightly different. So why don't you explain the nuances?

Yes sure. Thank you. Thanks, DA. Thanks, Steve. Hi, it's Jeff Bornstein. They are separate trials. So the trial in Canada has been open for some time now. But as Steve talked about earlier, we ran into issues with COVID and we're optimistic that now that that seems to be behind them that they can start recruiting. The US trial is a separate protocol, quite similar in design, really recruiting very similar patient populations. So although they are separate protocols and they're meant to be managed and analyzed separately, the totality of the data we can look at comprehensively to give us an overview of how well AT-1501 is performing in this population. So we will be able to look at the comprehensive set of the data even though they are separate studies.

Thanks. That's very helpful. Just a quick follow-up. I was wondering -- you mentioned the dosing is similar. And I was wondering, can you characterize kind of your interaction with the FDA and their thinking on how this islet cell program might be? Any additional color would be helpful. Thanks.

What do you mean -- sorry what do you mean by that question?

Sorry. More like, you mentioned that it's kind of the clinical trial path in the US is kind of still experimental. I was wondering if perhaps the FDA had changes in thinking or something kind of in that line or so as such.

Yes. So that has to do with the procedure itself and the purification of the cells is considered experimental here in the US. And so the FDA has taken a different approach than some other regulatory agencies around the world. And that's less -- that's not specific to our drug. That's more specific to the procedure. In terms of AT-1501, we're using the same dosing regimen and schedule in both Canada and the US. And in Canada, it's -- the schedule and dose that is the same that we're using for kidney transplantation as well as islet cell transplant.

Okay. Thanks.

Thank you. Our next question today is coming from Rami Katkhuda from LifeSci Capital. Your line is now live.

Hi guys. Thanks for taking my questions as well. I guess first, can you walk us through how you're thinking about dosing of AT-1501 in the IgA nephropathy trial compared to studies in ALS or transplantation? And then secondly, is there a potential for the FDA to consider AlloSure and iBox's approvable endpoints in future renal transplant studies, or has there been no indication of that?

Rami thanks for the question. So maybe I can tackle both of them. So, in terms of your second question with regards to -- its FDA guidance on the use of other endpoints. Right now the current guidance from the agency is to look at non-inferiority in terms of biopsy-proven rejection. So, we don't know whether the agency will allow other end points in the future. But right now, that is what we're considering to be the primary endpoint. But what we can do is use novel biomarkers and novel algorithms from -- on an exploratory perspective, in order to learn more about our asset and potentially in order to be able to help predict how well our asset might be doing or might be able to do versus standard of care. In terms of IgAN dosing, we haven't disclosed specifically how we'll be dosing in IgAN. But at a high level, the dose will be slightly higher about the same in the same range as for ALS. And as you know that dose level is lower than we're using for -- than we're using for transplant.

Got it. I’ll pass the floor. Thank you.

Thank you. We reached the end of our question-and-answer session. I'd like to turn the floor back over to management for any further or closing comments.

Thank you very much everyone for joining us today, and we look forward to talking to you in the future as we continue to make progress as a company and with AT-1501.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.