Good day and welcome to the Eledon Pharmaceuticals Third Quarter 2022 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Paul Little, Chief Financial Officer of Eledon. Mr. Little, please go ahead.

Good afternoon, everyone and thank you for joining Eledon’s third quarter 2022 operating and financial results conference call. Today, I’m joined by David-Alexandre Gros, Chief Executive Officer; Steve Perrin, our President and Chief Scientific Officer and Jeff Bornstein, our Chief Medical Officer. Earlier today, Eledon issued a press release announcing financial results for the third quarter ended September 30, 2022. You may access the release under the Investors tab on our company's website at eledon.com. 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 those 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. Now I would like to pass the call to Eledon’s CEO, Dr. David-Alexandre Gros. DA?

Thank you, Paul and thank you all for joining the call today. Following the positive Phase 2a ALS results in the second quarter, we continue to make important progress in our three ongoing clinical trials, evaluating tegoprubart in kidney transplantation, IgA Nephropathy or IgAN and islet cell transplantation. Before I turn the call over to Steve, I'd like to provide a brief recap on the new developments across our tegoprubart pipeline. In renal transplantation, we successfully dosed our first two subjects in this Phase 1b open-label study of tegoprubart. Given our enrollment rate to-date, we are on track to provide initial three month and six month open-label data across multiple available transplant participants in the first quarter of 2023. Additionally, in the third quarter, we received FDA clearance of our IND application for Phase 2 trial of tegoprubart for the prevention of organ rejection in subjects receiving a kidney transplant in the United States. This trial is designed as a superiority study versus standard of care with CNIs and will run in parallel to the ongoing Phase 1b ex-U.S. trial. The Phase 2 will enroll approximately 120 subjects and we anticipate initiating the study next year. Moving to IgAN, in the third quarter, we received FDA clearance of our IND application allowing us to evaluate tegoprubart in IgAN in the United States. Given this clearance, we're now in the process of opening U.S. sites as part of our ongoing global Phase 2a clinical trial. With addition of the U.S., the trial has now received regulatory clearances in 11 countries. Enrollment in the IgAN trial continues with multiple new subjects dose in the high dose cohort of the study. We remain on track to enroll the full cohort consisting of 21 subjects by the first half of next year and anticipate…

Thank you, DA. So I'll begin by providing an overview of our progress evaluating tegoprubart for the prevention of allograft rejection in kidney transplantation. Kidney transplantation is the most commonly performed solid organ transplant procedure in the United States with about 23,000 performed every year. Our goal in this indication is to use tegoprubart to replace CNIs, the current standard of care. Although, CNIs are the most widely used immunosuppressive therapy in kidney transplants, they are often toxic to the kidneys. They're intended to protect, resulting in shortened graft function. They also cause numerous other side effects including new onset diabetes and cardiovascular disease. Our hypothesis for targeting CD40 ligand as first-line immunosuppression for kidney transplant, stems from the large amount of non-human primate data generated both by our company with tegoprubart as well as with historical anti-CD40 ligand antibodies. In these studies, non-human primates treated with anti-CD40 ligand antibodies as monotherapy demonstrated protection from rejection from months at a time versus only days in untreated animals. We are pleased to report that we dosed our first two subjects in our Phase 1b clinical trial of tegoprubart in kidney transplantation since the initial of the study in July. The cadence of enrollment is consistent with expectations since the initial three participants in the study requires safety monitor committee meeting to review the first month of data after each transplant prior to the enrollment of the next participant. Given the enrollment progress we are making, we believe we can generate meaningful data on graph function quite quickly in this population. Given that acute rejection most often occurs within the first 90 days after transplant. We remain on track to provide initial data from key three month and six month time points across multiple transplant participants in the first quarter of 2023.…

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 later today. The company reported a net loss of $10.5 million or $0.73 per share for the three months ended September at 30, 2022, compared to a net loss of $9.8 million or $0.66 per share for the same period in 2021. Research and development expenses were $7.5 million for the three months of September 30, 2022, compared to $7.7 million for the comparable period of 2021. The decrease of $200,000 was primarily due to lower CMC costs recognized during the quarter, partially offset by an increase in clinical development and personnel costs due to increased headcount. G&A expenses were $3.1 million for the three months in September 30, 2022, compared to $2.8 million for the comparable period in 2021, an increase of $300,000. The increase is primarily related to an increase in professional service costs, general operating costs and stock-based compensation costs. As of September 30, 2022, Eledon had $65.9 million in cash and cash equivalents, which we expect to be sufficient to fund our clinical trial operations as currently planned in due 2024. As a reminder, this cash runaway allows us to initiate the Phase 2 trial on tegoprubart for the prevention of organ rejection and subjects receiving a kidney transplant, but additional financing will be required to fund any future ALS clinical trials. With that financial update, let me turn the call back over to DA.

Thanks, Paul. I am highly encouraged by the progress our team has made across our clinical programs. With three ongoing clinical trials, we remain committed to strong execution in our development efforts to close out the year, which we believe will leave us well positioned entering 2023, a potentially transformative year for Eledon. In the first quarter of next year, we look forward to providing meaningful initial data updates for three of our four programs, kidney transplant, IgAN and islet cell transplant. In addition, next year we expect to launch our Phase 2 kidney transplant study, as well as provide further clarity on the next steps for ALS program. I’ll now ask the operator to begin our Q&A session. Operator?

Thank you. [Operator Instructions] Our first question today comes from Pete Stavropoulos with Cantor Fitzgerald. Please go ahead.

Good evening and thank you for taking our questions. So at the American Society of Nephrology, you recently presented data for the ALS study showing a percent change from baseline for pro-inflammatory biomarkers, including markers of B cell activation and T cell activation. Just want to get your thoughts, your perspective on the percent change of IgA? And if you see similar changes in IgAN patients, would it be enough to translate to the clinical benefit?

Steve, let me turn that over to you. Thanks for the question, Pete.

Yes, it’s a good question. I mean, for IgA levels in ALS, we don’t know what baseline levels mean, right? We’ve never – I don’t think any companies ever shown a reduction in IgA levels, but the reductions were fast. They occurred within right after the first dose, before subjects received second doses. So the mechanism was very quick much like we’ve seen in the prevention of transplant rejection in primates. And we saw double digit percent reductions as we dose escalated. So I would anticipate that those levels are meaningful, but how they transfer into IgAN, I think is unknown at this point.

All right. And then again, for IgAN, what is the target population that you believe would most benefit from tego when you take into account the mechanism of action and it’s a potential disease modifying properties? Would it be earlier stage patients, later stage patients or broadly or benefits seen broadly across all IgAN patients?

I mean, I’ll give you my perspective and Jeff could jump in. But I think across almost any disease indication at this point, the earlier you see interventions, the better off your outcomes tend to be. We know that IgAN is a long term disease, right? I mean, it’s chronic, it lasts for decades. But I would assume that the earlier interventions one could get on reducing proteinuria that would translate into better kidney function and less long term kidney damage.

Jeff, anything to add or…

Yes, thanks. Thanks, Pete. Well, I concur with Steve. As the disease progresses, if glomeruli lost and fibrosis sets in none of these agents are going to reverse that. So, earlier intervention is probably better across the board. Our mechanism of action does work both upstream and downstream. So in patients where there’s a good deal of inflammation in the kidney itself, we would expect to see benefit not just in disrupting the upstream process at IgA. So there is that distinction there where the drug does work both upstream and downstream. Patients who are too, too far advanced, I don’t think any of the mechanisms will work.

All right. Thank you for the color. And so last question is, how many patients can we expect to see data for across the three initial data sets in 1Q 2023?

Good. I mean, we’re like – we’ll share everything that we have that’s available at the time. It depends a little bit on when we end up presenting the data and so, which of the conferences we will be able to present the data at.

Okay. Well, thank you. Thank you for taking my questions.

It’ll be a number similar to what we’ve – what you’ve seen other companies present for their initial Phase 2 data.

All right, look forward to it. Thank you.

Thanks, Pete.

The next question comes from Matt Kaplan with Ladenburg Thalmann. Please go ahead.

Hi. Good evening and congrats on the progress. Just to follow-up on Pete’s question. With respect to the renal transplant program, you announced that you’re going to report initial data from the first few subjects on the Phase 1b three and six month data. What read-through do you – will that data provide to the potential for the Phase 2 superiority study that you plan to start next year?

Thanks, Matt. Jeff, why don’t I turn that over to you?

Thank you, DA. Thanks, Matt. The study – the study’s a pilot study designed to show safety and also preliminary efficacy, right? So what we expect to see is that we can administer – we can administer this regimen safely to these patients that it prevents rejection and potentially more like on point for your question is how is that graft functioning? What do their GFRs look like? And how is that going to inform our endpoint for the next study? So it’ll be a few patients only. But we will start to get a sense of how they’re doing, how well they’re doing, how well their grafts are functioning. And of course, we’ll look at the side-effect profile, right, to make sure that we’re looking at whether or not they’re developing diabetes or whether it’s preventing it.

Okay. That’s helpful.

And then these studies are designed in a similar manner. So other than the fact that one of them is open and the other one is controlled, in terms of how the patients are being treated and how they’re getting tegoprubart that’s the same.

Okay. And then just with your islet cell transplant program, I guess you’re expecting first patient enrollment in the near-term. You already had shown strong preclinical data there. Help us think about the initial data, the three month data that you’re going to report in the first quarter? What we should be looking for there?

Thanks, Matt. Jeff, let me turn that to you.

Thank you. So similarly to our kidney transplant study, we will – we’ll give an update of who’s been like – the number that’s been transplanted and how they’re doing, so adverse event profile, graft function and rejection.

And here we’ll look at as part of that, we’ll also see with regards to graft function whether those – how those patients are doing in terms of glucose control and the need for exogenous insulin. So recall that most patients today, if they get a islet cell transplant require repeat transplant, typically about 75, 90 days later in order to have sufficient glucose control. So our hope is that with only one transplant we might be able to achieve that.

Great. Great. Thanks. Thanks, guys. Look forward to the meet outs in the first quarter.

The next question comes from Thomas Smith with SVB Securities. Please go ahead.

Good afternoon. Thanks for taking the questions. I was just wondering if you could comment on some of the latest developments here across the CD40 landscape. I know back in September, we saw some positive top line data from Horizon CD40 ligand and Sjögren’s syndrome. You don’t currently have any studies there, but can you just comment on that data set and how you think about the potential to pursue development in a large indication like Sjögren?

Sure. Steve, do you want to talk about some of the recent data? And then I’m happy to talk about how we think about indications.

Yes. Thank you. Thanks. Great question. We’re excited about the data. It really continues to validate mechanism of action for the pathway. They showed data that was similar to what Novartis had presented with their earlier smaller study compared to what they’re running today. So, classic autoantibody mediated diseases like Sjögren’s and Lupus continue to be aligned with – has been a longstanding knowledge of the mechanism of action of the drug being able to hit both T cell mediated as well as B cell mediated diseases. So we thought that data was encouraging.

And then in terms of how we approach thinking about indications. When we picked our initial indications, we looked at three different things. One was we want indications where there was a good understanding of the pathophysiology of the disease and how an anti-CD40 ligand would play into that indication. We then looked at indications where we had a good understanding of what the path to the approval, the regulatory path would look like. And third, we sought out indications that could be executed by a smaller biotech. And it's really looking across all of those things that led us to pick our indication. Now, I think there are a number of other larger indications where using an anti-CD40 ligand could make sense including Sjögren's, which you just brought up. But right now from our perspective, we remain focused on our indication and today we don't have the financial flexibility to add another indication. But obviously, in the future as we grow, we could consider adding other indications as well.

Got it. Okay, that's helpful. And then yes, I was just wondering if you could comment on the latest developments with Novartis and their anti-CD40 iscalimab. It seems like they've recently stopped a second solid organ transplant study in liver transplant. Guess it'd be helpful if you just share your thoughts around this program and maybe just remind us why you think targeting CD40 ligand is the superior approach in solid organ transplant?

Sure. Let me turn that over to Steve to go through the CD40R versus CD40L in transplant.

Yes, so great question. I'll answer that and then maybe I'll hand it over to Jeff to talk about the iscalimab liver recent results there. So the history there, as we know for a long time we've known 30 years that blocking the ligand tends to be more efficacious than blocking the receptor, not only in the context of preventing a short and long-term transplant rejection, but similar data exists for animal models of autoimmunity as well. I think a lot of color has been added to the rationale on why we see a better therapeutic effect with blocking the ligand. And it comes down to a couple of different functional differences. One is that the receptor and ligand have very different expression patterns in the body. The receptor is constituently on the cell surface of antigen presenting cells, meaning it's always there on the cell surface and it's present on a host of antigen presenting cells, including B cells, dendritic cells, NK cells, and specialized antigen presenting cells in your organs, whereas the ligand that's expressed on T cells is not constitutive, it's not there all the time. It's only on the surface transiently when the T cell is activated after antigen presentation and then there's mechanisms to remove it from the cell surface to actually prevent autoimmunity. So that's one rationale is that the expression patterns are very different so that antibodies targeting these will have different biological outcomes. The second one is that when people think about blocking this pathway and blocking CD40 ligand, they think you're only blocking costimulatory activity via CD40 receptor, and that's not true. CD40 ligand can actually activate multiple different costimulatory pathways on antigen presenting cells, not only through CD40 receptor, but as an example through the MAC complex which has been shown to be very important in CD8 – cytotoxic CD8 positive transplant rejection, there's a couple of other integrins that CD40 ligand also can control and activate cell populations including various integrins. So that's the second one is that blocking the ligand can block multiple costimulatory pathways. And then the third one, which is probably the most unique to CD40 ligand and potentially the most exciting because it's on the cell surface of CD4 positive T cells, not only does it block their proinflammatory differentiation when you block the ligand, it actually repolarizes them to become regulatory T cells, which can create tolerogenic chemokines like TGF-beta, IL10 and create this tolerogenic environment in the context of preventing rejection. So those are probably the biggest differentiation points. Jeff, did you want to comment or DA on iscalimab and liver? I'm happy to as well, but if one of you guys want to take it.

I can. I'm happy to chime in. In addition to what Steve said about mechanism, I think we have the opportunity to try to learn about study design features that we might consider doing differently in a program going forward. It's difficult to comment on a competitor program, especially when they haven't made any of the actual trial results public. But I think there's still opportunities for us to learn from what they've done and tighten things up in study design around things like induction agents and also the role the bias plays in these open-label studies and who gets biopsied. So I think we're carefully studying what's been done and I think we can incorporate some elements into our future studies to try to learn from what happened with that program.

Just a final thought. What Novartis’ asset is that they showed inferiority, they stopped the studies early because of – they were trending towards inferiority versus CNIs. But there is an upside to that is this wasn't stopped for a safety reason. So it continues to underscore just – to-date the safety of the class.

Got it. Okay. Yes, I appreciate the color guys. And then maybe just lastly, now that you have FDA clearance, can you expand on the plans for starting the Phase 2 kidney transplant study in the U.S. and I guess elaborate on what other gating factors are there to getting the study up and running in 2023?

Thank you. I mean, right now we're just working with our CROs on beginning to execute the study. So it's really we're working towards that goal. So there aren't any major large gating items.

Okay, Got it. Awesome. Thanks guys. Appreciate you taking the questions.

[Operator Instructions] The next question comes from Rami Katkhuda with LifeSci Capital. Please go ahead.

Hey guys, thanks for taking my questions as well. Just a quick one from me, but can you touch upon how the 10 and 5 mg per kg doses as well as the every three week dosing frequency we're chosen for the Phase 2a study in IgAN, I realize it's quite different from the ALS study.

Great. Hey Rami, thank you for the question. Steve, let me turn that over to you.

Yes, I mean, we learned a lot from the Phase 2 studies. Remember that was our first multiple ascending dose study in humans. The other study we had done was a single ascending dose and healthy volunteers for the most part. So we're learning a lot about the pharmacokinetics of the drug. We kind of knew from our primate studies in the ALS study that were two week dosing, which we had planned was due to the fact that we had started dosing in that study. If you remember, very low, the lowest dose cohort was one mg per kg. So in order to start to increase exposure levels early on while being very cautious about safety profile, we decided to dose every other week. And we hypothesized that by doing that we would really never reach steady state, that exposure levels would increase over time, which is what we observed in the study even up to eight mg per kg. But we utilized that data to start to think about how one would design the appropriate exposure levels for autoimmune indications like IgA nephropathy and that's how we selected the 5 and 10 mg dose. And we knew based on that data we could go to every three week dosing. Jeff, I don't know if you want to add some color to that, but that's kind of the high level summary.

I concur, the doses translate actually pretty well from ALS to IgAN.

Got it. And I guess is the end goal to make a subcu formulation of tegoprubart for diseases like ALS and AE?

Thanks Rami. We're working on a subcutaneous formulation as well. So there are certain diseases where, for example, transplant where AE or ALS or an IV formulation from a competitive perspective could be acceptable. But for example, in IgAN over time we would luck to use a subcutaneous formulation.

Got it. Thank you.

This concludes our question-and-answer session. I would now like to turn the conference back over to DA Gros for any closing remarks.

Thank you for your assistance, operator, and thank you all for joining us on today's call. Have a great evening.

This conference has now concluded. Thank you for attending today's presentation. You may now disconnect.