Prothena Corporation plc (PRTA) Q4 2018 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the Prothena Fourth Quarter and Full-Year 2018 Financial Results Conference Call. [Operator Instructions]. As a reminder, this conference call may be recorded. I would now like to turn the conference over to your host, Ms. Ellen Rose. Ma'am, you may begin.

Thank you, Valerie. Good afternoon, everyone, and welcome to Prothena's investor conference call to review our fourth quarter and full-year 2018 financial results and business progress, as well as our 2019 financial guidance. Please review the press release we issued earlier today, which is available at our website at prothena.com and is also attached to a Form 8-K filed today with the SEC. Speaking on today's call to discuss our 2018 pipeline programs and corporate activities, we have Dr. Gene Kinney, our President and Chief Executive Officer; Dr. Radhika Tripuraneni, our Chief Development Officer; and Dr. Wagner Zago, our Chief Scientific Officer. In addition, Tran Nguyen, our Chief Operating Officer and Chief Financial Officer, will review our financial results for the fourth quarter and full year of 2018 and 2019 financial guidance. Gene will then provide an overview of upcoming milestones and open the call for Q&A. Before we begin, I'd like to remind you that during the course of today's presentation, we will be making statements regarding Prothena's future expectations, plans and prospects that constitute forward-looking statements under the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These statements are based on estimates, projections and assumptions that may prove not to be accurate, and actual results may differ materially from those anticipated due to known and unknown risks, uncertainties and other factors. For a discussion of the risks associated with our forward-looking statements, please see our press release issued today, as well as our most recent Form 10-Q filed with the SEC and also the Form 10-K we will soon be filing with the SEC. We disclaim any obligation to update our forward-looking statements. And with that, I'd like to turn the call over to Gene.

Thank you, Ellen, and thank you all for being on our call this afternoon. I'm joined today by members of our management team to discuss 2018 and the upcoming milestones we are looking forward to in 2019 and beyond. But before we begin talking about specific activities, I'd like to first acknowledge the talent and dedication of our employees who drive our ability to execute our ambitious goal to help patients with devastating neurological diseases. During 2018, we welcomed new members to Prothena, including Radhika, and several key positions that strengthen our capabilities. I want to start our conversation today by recognizing the many individuals who have made significant contributions to Prothena through the years and thanking our employees for their ongoing commitment to advancing our science. During the past year, we have sharpened our focus in neuroscience, an area where we have deep domain expertise. Today, we are applying that expertise in innovative ways against novel targets with the potential to change the course of a spectrum of neurological diseases. As we continue to advance our broad pipeline of clinical and discovery stage programs, we remain committed to presenting and publishing our scientific -- in scientific forums at each stage of our work. We do this to raise awareness of our programs and also to advance the science and deepen the understanding of the disease areas we work in. We ended 2018 with a balance sheet that enables continued development of both our clinical and discovery programs through key milestones. In a moment, I'll turn the call over to Radhika and Wagner for a review of our pipeline, but I want to first provide you a brief update on NEOD001. In 2018, we discontinued our NEOD001 development program in AL amyloidosis. And of course this was enormously disappointing. We have completed our operational closeout of the program and have done so within the financial parameters that we outlined in our reorganization announcement in May of last year. Tran will provide more detail on our financials later in the call. Since the early termination of the VITAL study, we've been undertaking a thorough analysis of the data. These updated data, consistent with the futility analysis from April 2018, continue to suggest that the VITAL study as it was designed was highly unlikely to have met its primary endpoint. With that said, there is still much to understand about this data set. The VITAL study was one of the largest prospective randomized studies in newly diagnosed patients with AL amyloidosis, and we continue to analyze this very rich data set and expect to share what we learn in due course to inform our pipeline and the field moving forward. I would like to now turn to Radhika and Wagner to provide an overview of the key activities in our pipeline. As many of you may know, Radhika is our Chief Development Officer. She joined Prothena in April of 2018 for myocardia. A surgeon by training, Radhika has extensive experience in biotech across several therapeutic categories. Since joining Prothena, she has been leading the PRX004 team and has quickly become an integral part of our company and has demonstrated a commitment to making science-based decisions to advance novel therapies for patients. So with that, I'll turn the call over to Radhika to discuss our clinical programs. Radhika?

Hello, everyone. Thanks for the introduction, Gene. Today I will cover our two clinical stage programs, concizumab and PRX004. Concizumab, formerly known as PRX002 or RG7935, is in a Phase 2 clinical trial and is an investigational monoclonal antibody for the treatment of Parkinson's disease and other synucleinopathies. In 2013, we entered into a worldwide development and commercialization collaboration with Roche for concizumab. Parkinson's disease is the second most common neurodegenerative disease that affects an estimated 7 to 10 million people worldwide and its incidence continues to increase based on an aging population. Parkinson's is characterized by the neuronal accumulation of aggregated alpha-synuclein in both the central and peripheral nervous systems that results in neurodegeneration and a wide spectrum of progressive motor and non-motor symptoms that are persistent throughout the course of the disease. While the disease is most commonly known for motor symptoms such as bradykinesia, stiffness and tremor, non-motor symptoms, such as cognitive deficits, fatigue, sleep disturbances, constipation or hyposmia are also common and disabling. Current treatments for Parkinson's disease only address a subset of symptoms. Levodopa and dopamine agonists are primarily directed at managing the early motor symptoms, but these agents become less effective over time and do not address the underlying cause of the disease. Prasinezumab is being developed as a potentially first in class approach to slowing the underlying progressive neurodegeneration. Our antibody targets alpha-synuclein, a protein that is widely understood to be intricately involved in the onset and progression of Parkinson's disease. There is genetic evidence for a causal role of alpha-synuclein in Parkinson's diseases. Mutations in the synuclein protein sequence or duplication or triplication of the relevant gene lead to overproduction of alpha-synuclein and may facilitate alpha-synuclein aggregation and formation of intracellular pathology. The scientific community has also increased its understanding of how cell-to-cell transmission potentially initiates the spread of aggregated forms of alpha-synuclein through different regions of the brain. Research has shown that pathology originating in one region of the brain, or even the periphery, can spread to other regions as the disease advances. And in fact, the progression of symptoms is reflected in the areas of the brain where alpha-synuclein pathology has spread. Prasinezumab aims to impact the underlying disease progression by preferentially targeting the pathogenic forms of alpha-synuclein and blocking this cell-to-cell transmission. The research in this space dates back many years where the effects of immunotherapy with a murine form of prasinezumab was described, demonstrating that it crossed the blood-brain barrier, decreased intraneuronal alpha-synuclein pathology and protected synapses from degenerating, resulting in improvements in both motor and cognitive behavior in multiple preclinical models. Last year, JAMA Neurology published results from our Phase 1b double-blind, placebo-controlled multiple ascending dose study which assessed the safety, tolerability, pharmacokinetics and immunogenicity of prasinezumab in 80 patients with Parkinson's disease. As described in the publication, prasinezumab demonstrated acceptable safety and tolerability across all dose levels, up to and including 60 mg/kg, the highest dose level tested, with no serious or severe treatment emergent adverse events in patients treated with prasinezumab. Mild to moderate infusion-related reactions that all resolved were limited to the 60 mg/kg dose cohort and were observed in 4 of the 12 treated patients. In addition, prasinezumab demonstrated target engagement in the periphery and antibody penetration in the CNS. Specifically, the data demonstrated a rapid dose and time dependent reduction of free serum alpha-synuclein of up to 97%, a statistically significant result that was maintained following 2 additional monthly doses. Importantly, in the study we saw that CNS penetration of prasinezumab. We observed dose dependent increases in prasinezumab in the cerebral spinal fluid, which was demonstrated by a mean concentration of 0.3% of prasinezumab relative to serum across all dose levels. This exceeded our expectations based on our preclinical experience where we saw a mean concentration of approximately 0.1%. These data further informed the two doses being used in the Phase 2 PASADENA study. We believe these doses target and saturate the aggregated pathogenic forms of alpha-synuclein in the brain. The Phase 2 PASADENA study of prasinezumab in patients with early Parkinson's disease is being run by our colleagues at Roche. PASADENA is a two-part Phase 2 clinical study. Part 1 is a randomized, double-blind, placebo-controlled, a 3-arm study and is designed to evaluate the efficacy and safety of prasinezumab in patients over 52 weeks. In Part 1, patients are randomized on a 1:1:1 basis to receive one of two active doses of prasinezumab or placebo IV every 4 weeks. The dose levels being assessed are 1,500 mg, and depending on body weight, either 3,500 mg or 4,500 mg in the second active arm. Eligible patients must not be on dopaminergic therapy and must not be expected to require dopaminergic therapy for at least 52 weeks. Part 2 of the study is a 52-week blinded extension phase in which patients from the placebo arm of the study will be re-randomized onto one of the two active doses on a 1:1 basis so that all participants will be on active treatment. Patients who were originally randomized to an active dose will continue at that dose level for the additional 52 weeks. In Part 2, patients will be allowed to use concomitant dopaminergic therapy. Any patient who medically requires initiation of dopaminergic therapy during Part 1 will have their subsequent data censored for the primary endpoint analysis. The primary endpoint of this data of the study is the comparison of change from baseline in the Movement Disorder Society Unified Parkinson's Disease Rating Scale, or MDS-UPDRS, total score of sections 1, 2 and 3 at the completion of Part 1 at week 52 in each treatment group versus the placebo group. For the primary endpoint, the study is designed with 80% power at a one-sided alpha of 0.1 to detect a 37.5% benefit in each treatment group versus placebo at week 52. Key secondary endpoints, in addition to safety and tolerability, include DAT-SPECT imaging that measures dopamine transporters in the brain. DAT-SPECT is used as a diagnostic tool for Parkinson's and has also been used in clinical studies to monitor degeneration of dopaminergic nerve terminals, which is thought to underlie disease progression. In addition, there are multiple exploratory endpoints, including those derived from a digital biomarker smartphone application. The digital biomarker smartphone application was piloted in our Phase 1 program and demonstrated that daily testing with the app generates reliable, clinically valid data in Parkinson's disease patients. In PASADENA, these initial learnings had been built upon to develop a smartphone app to comprehensively measure core signs of Parkinson's disease remotely, continuously, meaning throughout the day and not only in the clinical setting or at certain time points, and objectively via smartphone sensors. The digital testing encompasses biomarkers including phonation, postural and rest tremor, finger tapping, bradykinesia and balance. Given the powering of the study, we expect to assess the Phase 2 study results by evaluating the primary endpoint and select secondary and exploratory endpoints. The PASADENA study has now completed enrollment with 316 patients versus the target of 300. We expect top line results from Part 1 of the study to be available in 2020, and we look forward to keeping you updated on the progress. Now, I'd like to highlight our second clinical stage program. PRX004 is an investigational monoclonal antibody for the treatment of ATTR amyloidosis. ATTR amyloidosis is a rare, progressive and often fatal disease characterized by deposition of aggregated misfolded protein, or amyloid, in organs such as the heart and/or peripheral nerves. Transthyretin, or TTR, is produced primarily in the liver. In its normal tetrameric form, TTR is a highly abundant protein that serves as a transporter for thyroxin and vitamin A and has also been implicated in neuroprotective functions. In ATTR amyloidosis, the destabilized tetrameric forms of TTR protein are thought to disassociate into monomers that misfold, aggregate and deposit in organs. We collectively call these non-native forms mis-TTR and have developed a sensitive assay that specifically measures these forms in hereditary ATTR. I will discuss more about this mis-TTR assay in a few moments. PRX004 is designed to target non-native or misfolded TTR to neutralize soluble aggregates to prevent amyloid formation and also clear deposited amyloid in organs while leave the normal form of TTR unaffected. The disease most often manifests across a disease spectrum with cardiomyopathy and/or polyneuropathy. Additionally, patients can have the hereditary form or the wild type form of the disease. In the hereditary forms of this disease, genetic mutations produce a mutant form of the TTR protein. To date, more than 100 TTR mutations have been described, many of which have been shown to promote amyloid fibril formation, which has most commonly affect the heart and nervous system. The wild type non-hereditary form of ATTR most often affects the heart. In the ATTR landscape, there have been exciting recent developments in two classes of therapeutics: silencers and stabilizers. Both of these approaches have been shown to have benefit for patients with ATTR in clinical studies. Silencers such as RNAi and antisense therapies target cells in the liver to reduce native TTR production. Stabilizers target the functional free tetramer and aim to stabilize the normal protein and reduce the rate of disassociation of the native tetramer. Both of these approaches have the goal of reducing the formation of new amyloid. However, neither of these approaches directly target the non-native pathogenic form of the protein that is thought to cause the clinical manifestations of this disease. PRX004 is designed to both deplete soluble and clear insoluble aggregates and prevent amyloid formation in patients with either hereditary or wild type ATTR amyloidosis. As demonstrated in preclinical data that we published in 2016, PRX004 has unique biological activity that selectively targets and binds the non-native TTR structures associated with the pathology that form amyloid fibrils. As such, we believe there is a role for what we refer to as a depleter approach where PRX004 directly targets the pathogenic non-native TTR protein that drives organ dysfunction in ATTR amyloidosis. We're excited about PRX004 and its potential to offer additional therapeutic benefit to patients with ATTR amyloidosis. In 2018, we initiated our Phase 1 study of PRX004 in patients with hereditary ATTR. This study is designed as an open-label, 3 plus 3 dose escalation study to determine the safety, tolerability, pharmacokinetic and pharmacodynamic properties of PRX004. We continue to enroll patients in the Phase 1 study and expect to report preliminary data from the lower dose cohorts, including safety, tolerability and mis-TTR levels in hereditary patients in the fourth quarter of this year. I'd like to now discuss the highly sensitive, proprietary assay we have developed, the mis-TTR assay; a unique aspect of our PRX004 development program. This assay detects and measures circulating non-native forms of TTR, or mis-TTR, in plasma of patients with the hereditary form of ATTR. We have tested this assay across multiple TTR mutations and have found that there is an increase in the amount of mis-TTR in hereditary ATTR patients. Having now demonstrated the presence of those non-native forms in the blood, we are utilizing this assay in our Phase 1 study to assess how PRX004 impacts mis-TTR levels. This should inform dose selection for a potential Phase 2 study and provide insight on whether monotherapy or combination approach, where PRX004 is used in combination with a silencer or a stabilizer, might be optimal. The assay also has potential diagnostic and prognostic applications. For example, in helping to predict disease onset in asymptomatic carriers of hereditary ATTR or to monitor response to therapy. Separate from the Phase 1 study, we are also initiating research intended to measure the impact of silencers and stabilizers on mis-TTR levels in patients as these products become more commercially available. We believe this type of research may provide important information about how mis-TTR levels relate to clinical outcomes. We look forward to sharing data from our assay research, the exact timing of which is dependent on ongoing commercial launches and availability of patient samples. Now I'd like to turn the call over to our Chief Scientific Officer, Wagner, to talk about our discovery pipeline. Wagner?

Thank you, Radhika. As Gene stated, we have ambitious goals. And in addition to the clinical stage programs that Radhika discussed, we are advancing our leading neuroscience discovery pipeline to drive long-term value. I am delighted to talk with you today about some of the work of our research group. Driven by our team's scientific expertise and compassion to patients, we are investigating new potential targets and therapeutic modalities to develop therapies for devastating diseases. The discovery pipeline is currently comprised of antibody approaches that target proteins implicated in pathogenesis of several neurodegenerative diseases. We apply our understanding of the biology to identify and optimally target proteins implicated in diseases and design unique and important antibodies to these proteins. Having the resources and flexibility to accelerate a diversified pipeline of investigational therapies is also critical, and in 2018, we entered in a strategic scientific research and development collaboration with Celgene that helps us achieve this. The collaboration leverages each company's core expertise in protein homeostasis and protein clearance to target the underlying cause of the many neurodegenerative diseases that have devastating consequences on society. The goal of collaboration with Celgene is focused on 3 discovery stage programs: tau, TDP-43 and a third undisclosed target. All 3 of these targets are implicated in a range of neurodegenerative diseases that currently have no disease modifying therapies, including Alzheimer's disease, frontotemporal dementia, amyotrophic lateral sclerosis, or ALS, chronic, traumatic encephalopathy, and progressive supranuclear palsy, among others. There is strong consensus that the type of sequential cell-to-cell transmission that Radhika described earlier for Parkinson's disease may also underlie the progression of several other neurodegenerative diseases. For example, transmission of pathology between different brain regions has also been proposed in Alzheimer's disease with beta amyloid and tau. More recently, cell-to-cell transmission of TDP-43 pathology has been described in ALS and frontotemporal dementia. Antibodies may be effective as disease modifying therapies through several potential mechanisms, but we believe that preventing the uptake and feeding into healthy cells is an important step in slowing or halting disease progression. Our research suggests that the efficacy of a therapeutic is likely to be dependent on binding characteristics to selected epitopes. Once complex with pathogenic proteins, antibodies may also promote clearance of pathogenic species via, for example, endocytosis and perivascular clearance. The knowledge about common mechanisms of disease propagation at the molecular level and our increasing understanding of how to effectively intervene in this process enables our efforts to develop highly targeted and potent antibodies that aim to intercept the transmission process and prevent further neurodegeneration. Our tau program, in collaboration with Celgene, exemplifies our unique approach and methodology. We have tested a large number of antibodies through post-translational modifications of tau and to epitopes along the entire protein and found that only a few have resulted in a superior profile compared to those that have been described by other groups for their ability to block the binding of tau to neurons and internalization and prevent the downstream neurotoxic effects. Understanding this biology and what is driving efficacy of these antibodies is very important to increase our confidence in selecting a clinical candidate with a comprehensive for clinical package. This is a highly rigorous process, and we believe it differentiates our ability to generate the relevant candidate that can be optimally tested across multiple measures. We are applying a similar approach to generating clinical candidates against TDP-43 and also the third undisclosed target that is part of our collaboration. And we expect to initiate cell line development of a lead candidate for our tau program this year. The collaboration with our colleagues at Celgene has been highly productive. Of course, during the coming months, we expect to remain in close contact regarding any potential impact caused by the recently announced acquisition of Celgene by Bristol Myers Squibb that's expected to close during the third quarter of the year. That said, as of now there has been no change. And as you may recall, Prothena is responsible for the execution of these programs through the preclinical and early clinical stages, dependent upon various clinical option exercise [indiscernible] by Celgene. Finally, I'd like to briefly disclose our proprietary abeta discovery program. As you know, several of our scientists were responsible for foundational science on the potential causal role of misfolded proteins in Alzheimer's disease, and we're associated with the development of the first anti-abeta antibodies tested. We have causally followed promising scientific advances in this field and look forward to the results of multiple late stage studies of anti-abeta approaches that are due to read out in the coming years. We particularly look forward to the results from aducanumab and gantenerumab, which broadly interact with both soluble and insoluble pathological forms of the beta protein. We have focused on the discovery and development of a novel anti-abeta antibody approach that we believe may offer significant improvements to patients and their families over what can be envisioned by those currently undergoing clinical testing. We expect to initiate cell line development of a lead candidate for our abeta program this year, and we look forward to communicating preclinical research that describes our novel approach in the fourth quarter of this year. Ultimately, we continue to believe that both tau and abeta play important roles in Alzheimer's disease, and that therapies targeting each one of these proteins may be important in possible treatment approach designed to provide a disease modifying effect. We believe our team has profound scientific insights to drive transformational innovation to neurological disease, and we look forward to providing updates on these programs as they progress. At this time, I'd like to turn the call over to Tran for a discussion of our financial results. Tran?

Thanks, Wagner. Today we reported favorable 2018 cash burn from operating and investing activities of approximately $30 million versus our updated 2018 guidance of $40 million to $50 million, where these figures included $110 million of cash provided by operating activities associated with the Celgene collaboration. This favorability was primarily driven by lower than expected expenses related to the NEOD001 program, including discontinuation costs and the company's reorganization, which were approximately $70 million versus our 2018 guidance of $80 million to $85 million. In 2018, we reported a net loss of $22.5 million and $155.6 million for the fourth quarter and full year of 2018 as compared to a net loss of $47.8 million and $153.2 million for the fourth quarter and full year of 2017. In 2018, net loss included a restructuring credit of $1.6 million for the fourth quarter of 2018 and restructuring charges of $16.1 million for the full year associated with the discontinuation of the NEOD001 program in April 2018. Net loss per share was $0.56 and $3.93 for the fourth quarter and full year of 2018 as compared to a net loss per share of $1.24 and $4.07 of the fourth quarter and full year of 2017. Included in the net loss for the fourth quarter and full year of 2018 was non-cash share-based compensation expense of $4.2 million and $27.0 million compared to $7.4 million and $26.8 million for the fourth quarter and full year of 2017. We reported total revenue of $0.2 million and $1.0 million for the fourth quarter and full year of 2018 from our collaboration with Roche as compared to total revenue of $0.2 million and $27.5 million for the fourth quarter and full year of 2017. The decrease in revenue for the full year was primarily due to achievement of a clinical milestone payment from Roche of $30.0 million in 2017 for the initiation of the Phase 2 PASADENA study of prasinezumab with no corresponding amount in 2018. R&D expenses totaled $16.5 million and $101.2 million for the fourth quarter and full year of 2018 as compared to $33.5 million and $134.5 million for the fourth quarter and full year of 2017. The decrease in R&D expenses for the fourth quarter and full year of 2018 compared to the same periods last year was primarily due to lower manufacturing expenses, lower clinical trial costs and lower personnel and consulting costs. This was offset in part by higher expenses associated with prasinezumab. R&D expenses included non-cash share-based compensation expense of $2.1 million and $9.8 million for the fourth quarter and full year of 2018 as compared to $3.1 million and $10.9 million for the fourth quarter and full year of 2017. G&A expenses totaled $8.0 million and $42.5 million for the fourth quarter and full year of 2018 as compared to $14.0 million and $48.2 million for the fourth quarter and full year of 2017. The decrease in G&A expenses for the fourth quarter and the full year of 2018 compared to the same periods last year was primarily due to lower personnel costs and lower consulting expenses. G&A expense also included non-cash share-based compensation expense of $3.7 million and $16.2 million in the fourth quarter and full year of 2018 as compared to $4.4 million and $15.9 million for the fourth quarter and full year of 2017. In 2018, we reorganized after the discontinuation of the NEOD001 program, and as a result, we streamlined our operations and said goodbye to many of our colleagues and friends. While this was difficult, it was necessary for our business, and I want to take this opportunity to recognize the professionalism that all of our employees exhibited during this time. As a result of this restructuring, we realized a restructuring credit of $1.6 million in the fourth quarter of 2018 and restructuring charges that totaled $16.1 million for the full year of 2018. The restructuring credit in the fourth quarter of 2018 was primarily the result of an adjustment in previously reported employee termination benefits, offset in part by an asset impairment related to exiting our office lease in Ireland. Restructuring charges included a non-cash share-based compensation credit of $1.6 million for the fourth quarter of 2018 and non-cash share-based compensation expense of $0.9 million for the full year of 2018 with no corresponding amounts in the fourth quarter of 2017 or for the full year of 2017. As of December 31, 2018, Prothena had approximately $431.7 million in cash, cash equivalents and restricted cash and no debt. As of February 8, 2019, we had approximately 39.9 million ordinary shares outstanding. Now turning to our 2019 financial guidance. We expect the full year 2019 net cash burn from operating and investing activities to be $64 million to $72 million and to end the year with approximately $364 million in cash, which represents the midpoint of the range. The estimated full year 2019 net cash burn from operating and investing activities is primarily driven by an estimated net loss of $93 million to $104 million, which includes an estimated $26 million of non-cash share-based compensation expense. With that, I'll turn the call back over to Gene to summarize our upcoming milestones over the next 12 to 24 months. Gene?

Thanks, Tran. So as we move forward in 2019 and beyond, we expect continued progress in our pipeline and look forward to coming back to you as we have data to report. Turning to a summary of our R&D milestones, prasinezumab, the Phase 2 PASADENA study is fully enrolled, and we now expect the last patient last visit in Part 1 of the study to occur at the end of this year. Based on this timing, we expect top line results from the study to be available in 2020. For PRX004, the Phase 1 study is progressing, and we expect to report preliminary safety, tolerability and pharmacodynamic data from the lower dose cohorts in the fourth quarter of this year. We're also making important advances in our discovery pipeline. We expect to initiate cell line development of lead candidates for both our tau program that is partnered with Celgene and our proprietary abeta program in 2019. And for our abeta program, we also expect to highlight preclinical data in the fourth quarter of this year. So at this time, we'll open the call for questions. Valerie?

[Operator Instructions]. Our first question comes from Christopher Marai of Nomura.

I was wondering if you could comment a little bit on the fourth quarter update on your TTR program, specifically around the pharmacodynamic data that you might be presenting. I understand that you're going to be able to give us some information on mis-TTR, but perhaps not over knockdown levels. Could you maybe contrast and compare the type of PD readout that we might see there versus some of the more knockdown oriented PD data that we've seen for other agents? Thank you.

Yes. Thanks for the question, Chris. Maybe I can start, and Radhika, you can jump in as well. So yes, I think it's an important distinction that you're making, Chris. I think most of what we've seen in the field has really been measurements of total TTR level. And as you can imagine, at least by our estimations, the bulk of that signal would be driven by the native forms of TTR, in other words, the tetrameric form of the protein. I'm not sure I'm aware of anyone that would argue that the tetrameric form of TTR is disease causing or is involved in the pathogenesis disorder. I think most believe that it's on the destabilization of that tetramer where those monomers then start to misfold, re-aggregate in an abnormal confirmation, and that's the part of the pathway that actually leads to disease. So the distinction then with what we're calling our mis-TTR assay is that to the best we've been able to establish thus far is it does not detect that normal tetrameric form of TTR. But what it specifically tends to see is the mis-forms, i.e. those monomer breakdown products through to the different misfolded forms that are soluble and circulating in blood of patients, in particular in the plasma. And so clearly we'll be using that in multiple ways this year, as Radhika kind of indicated in her remarks. We want to use it within the program, and then we think it will be important with respect to pharmacodynamic activity and understanding something about dose selection to move forward. But also as additional agents come into the marketplace and have a broader commercial uptake, understanding how the mis-TTR pool is changing in patients treated with those types of approaches will be very important as well, we believe. So maybe Radhika, do you want to speak a little bit about just how that's employed in the program and what we might expect this year?

Sure. Just as a reminder, this is a Phase 1 study and it's a 3 plus 3 dose escalation study in which there are a total of 6 cohorts. What we are hoping to share at the end of this year is data from the lower dose cohorts in the elements, as Gene and I have previously outlined, safety, tolerability, PK and of course the PD. The PD aspect, or the pharmacodynamic aspect, is definitely the mis-TTR that we're focused on analyzing. In contrast, and as Gene sort of indicated, the other compounds that are now commercially available target native TTR production, as such knockdown total TTR, whereas ours we hope will indicate based off the results that would actually reduce mis-TTR and actually leave total TTR levels normal. Now, we'll have to wait until the end of the year to actually see all that data and we look forward to sharing it with you, but we believe that's the key differential element. So in contrast, we're also having an additional effort which we sort of call as out of our study workstream where we're working with clinicians to obtain samples for patients who are also on therapeutics that might see what effect, if any, they may have on mis-TTR. And we believe that the combination of looking at those two data sets would give us a very good strategic perspective of how to best proceed with a PRX004 clinical development.

Okay. And just maybe one quick follow up, if I may. Given the unknowns I suppose currently about the commercial opportunity in TTR, how might you guys look at running a clinical program there? Are you -- where is the focus? Obviously there's two different cardiac subsets, as well as the polyneuropathy, and we'd be curious to hear your thoughts about where you might want to bring your asset. And then perhaps in terms of line of therapy or not stage of disease where your TTR drug might be most applicable. Thank you.

Yes, sure. So there are a number of questions in there, because I think first, just in terms of how we structured the program to date, clearly this initial Phase 1 study is primarily around safety, tolerability. Clearly PK is going to be important, and we are very interested in changes potentially in the mis-TTR measurements as well. We think that could inform us on a number of different levels, and obviously we need to see that data to really make any decisions on the optimal path forward. In particular, I think questions around whether you think about this on a standalone basis or whether you think about this in combination with either silencers or stabilizers I think is a very important question. And we hope to be informed by that both through the Phase 1 study results, as well as through, as part of the Phase 1, the pharmacodynamic assay results. And so I don't know that I can give you a definitive answer right now. I think the landscape is clearly evolving for TTR amyloidosis patients, which is a good thing. And clearly we believe that the mechanism of action of PRX004 is differentiated, yet still in a pathway where we know influencing that pathway leads to benefit in the disease. So we like that from a potential combination perspective, but at the same time, it doesn't necessarily rule out a future path where we also may evaluate PRX004 on a standalone basis.

Okay, thank you.

Our next question comes from Michael Yee of Jefferies.

Kolatchy Chicory [ph] on for Michael Yee. Just two questions here on our side. I guess based on your preclinical as well as your in vitro work, what level of mis-TTR reduction are you hoping to see at the low dose? And I guess on the second question is also earlier you did a great job highlighting some of the differences between your antibody approach to TTR amyloidosis in currently -- in some of the currently marketed silencing technology. I know it may be a little early, but from a clinical perspective, what do you hope to see there over time that could potentially differentiate your approach from those technologies? Thank you.

Yes. So two very important questions. So obviously, as we think about the clinical profile of the existing therapies -- Radhika, you can jump in here as well -- I think we have a lot of data now from both the Alnylam and the Akcea molecule in terms of what they do on hereditary forms of neuropathy in the disease. And of course we're learning more and more about the role of the stabilizers, particularly in cardiomyopathy patients. The recent tafamidis data I think was very interesting. And actually how some of the effects appeared both in terms of timing when we look at survival and the impact before 18 months versus after 18 months. But also when you look at some of the key secondary endpoints and some of the functional measures, maybe starting to separate in treated versus untreated or placebo patients, even at an earlier time point I think are quite interesting. The other component I'd look at in those spaces are what's happening in the maybe less severe patients relative to any of the given endpoints versus more severe patients. And I think you can start to pull out what the patient need is in those spaces. Then it becomes a relatively straightforward logic exercise to ask the question of whether either a combination approach or a standalone with PRX004 might fill some of those needs for the patient population. And obviously any clinical design would be focused on addressing those residual needs. And so those are the sorts of things we're looking for. We think this data that will come in front of us that we'll be able to see and have in front of us in terms of the commercial uptake and how these different therapeutics are used, and that will obviously also go into informing exactly how we would position PRX004 moving forward. That said, as we talked about earlier, I think it does have a differentiated and unique mechanism of action. And given where it works in the TTR pathway, we certainly see it as not being competitive to those other agents, but rather complementary on that pathway, so we think that that's important. And I don't know if Wagner, Radhika, you want to add to that, but I think it's -- we're still encouraged by where PRX004 interacts in that space.

Yes, and your question about the mis-TTR and what is our expectation. We share the results with the field, and based on the interaction of the antibody with these misfolded forms, we do expect indirect targeting of these forms. And we increase our confidence that the doses that were tested, that are being tested now in our Phase 1, I would think the ranges that we expect for our [indiscernible] approach. There are a number of elements that are won't seen humans, so we cannot fully reflect in an innovative assay. And just to say the least pharmacokinetics, clearance mechanisms, all of those could contribute to the level of occupancy and availability of those forms involved. So we will have to wait for the data coming from the clinical trials. But I think we can say with confidence that the ranges, the dose ranges that we selected for the trial are appropriate.

The only I think additional item maybe to bring the previous response a little bit more into clinical perspective is I think there's a unique opportunity for PRX004. Obviously as a clinician, we're thrilled that there have been two recent advances. Two new therapeutics have been come onto the space particularly here in the U.S. Tafamidis shared some really impressive data that I think has us really looking at the disease space. That being said, there still is I think a clinical need, as Gene sort of alluded to, when you look at the data sets in terms of how do we better treat this patient population and something these patients who've been underserved have an opportunity and a right to ask for. And we look forward to hopefully developing a compound that sort of supports that and can deliver that for them. The reality is what you can see from compounds such as patisiran and inotersen is they are on target and on pathway as it relates to affecting the total TTR production, while ours is a bit further down in the pathway and really focuses on that non-native form, the pathogenic components that we believe, and I think many believe in the field, are actually really the issue at hand. So including that, that's also deposited in the organ, which is a bit more differentiated from perhaps the Onpattro or inotersen approaches. Now, the reality is we have to sort of see how that plays through in the clinical data, and that's something we're definitely very excited to study and look forward to sharing with you when the time is right.

Our next question comes from Kennen MacKay of RBC Capital Markets.

Maybe two on the PASADENA trial. Was wondering first on the prior Phase 1 data sets of PRX002 both in healthy volunteers as well as the Parkinson's patients, was wondering sort of what you saw as the most compelling efficacy data that's been generated so far or PK/PD data. And then second, thinking about the potential outcomes of the PASADENA trial, and given the mechanistic rationale for targeting amyloid or aggregated proteins suggest that it might take quite a long time to sort of see benefit from this process. What do you think we need to see from PASADENA to justify potentially moving forward into a larger Phase 3?

Yes, very good questions. So maybe I can just start on the earlier studies. And obviously, healthy volunteer study or a 3-month study, and I think you kind of alluded to this in the second part of your question, clearly efficacy was not our focus of what we were looking at in those early studies. What we really wanted to know from the early studies was where we could go with respect to dose level, what we would see in terms of central penetration as per CSF levels, and could we actually evidence that we were engaging alpha-synuclein and do so in a way that could be done safely in patients. And so that was really the focus of the Phase 1 study. As a reminder, even the Phase 1b was a 3-month study where patients received 3 doses, and in that study, I don't remember the exact number, but a substantial number of those patients were on concomitant dopaminergic replacement therapy at the same time. So what we saw there, of course, and Radhika alluded to this in her comments, was in the blood of those patients a reduction of free alpha-synuclein I think up to a maximum about 97%, which is near complete reduction of free alpha-synuclein at the higher dose levels, which was both time and dose level dependent. And of course that's encouraging with respect to the safety profile we saw at equivalent dose levels, and so we were encouraged by that. I think the other thing that was alluded to in the comments was the idea, and I think Wagner had mentioned this, that when we look at the brain penetration levels, or the central nervous system penetration levels as assessed by CSF levels, we actually saw on a percentage basis higher levels than we even evidenced in most of our preclinical studies. And that was encouraging because as we think about the different components of prasinezumab, its higher preference for aggregated forms of alpha-synuclein and what that means with respect to its ability to occupy what we assume to be the pathological load of alpha-synuclein in the brains of patients with Parkinson's disease, we feel pretty good about where we are in terms of the dose levels in the Phase 2 study. So those are some of kind of the relevant things that we pulled out of Phase 1. I think your second part of your question is on multiple variables in the PASADENA study. And I think what you're probably pulling there is that the study is powered to see -- is 80% powered at a one-sided p value of 0.1 to see a 37.5% relative difference between either of the drug level arms or versus placebo. And of course that is a signal detection study and not one that's powered to see the traditional two-sided p of 0.05, and so I think that's absolutely accurate. What we do have in that study are a number of additional endpoints that we think both on a biology level, as well as just from a signal detection perspective, also may be of value. I'd point to the DAT-SPECT that Radhika talked about a little bit in her comments, as well as some of the digital biomarkers that the Roche team has been quite industrious in terms of both developing and employing in our clinical studies. And so clearly, directionality of change I think will be something that is important in these types of studies to evaluate. And ultimately Roche, and obviously to the extent that we're involved in that as well, we'll be evaluating the totality of the data set to make decisions on whether and when to move the program from Phase 2 to Phase 3.

Our next question comes from Jay Olson of Oppenheimer.

Hi, this is Matt on for Jay. Thanks for taking the question. I know you touched on it already, but could you please remind us of how the clinical profile of PRX004 could be differentiated from tafamidis, patisiran and inotersen, and how that might ultimately, depending on the data, inform your cell strategy?

Absolutely. So the last part of your question is how it informs what, I'm sorry?

Our go-forward strategy.

Go-forward strategy. Got it. Okay. So Radhika, do you want to cover?

Yes, sure. So obviously the therapeutics you're talking about employ across a full range of the pathway. And just as a reminder, before we start talking about a therapeutic, the pathway is such that the liver produces the normal functioning protein, or TTR. That protein is usually in a tetrameric form and is sort of a normal functioning protein. And many of those in the room and probably on the call, the reality is that unfortunately for these patients, particularly those whether they have a mutation or perhaps even in wild type patients, that tetramer falls apart or disassociates and accumulates either in from their monomeric formation into misfolded proteins and ultimately accumulate across various organ systems that result in dysfunction and severe disability for the patients. So with that pathway in place, you can envision a couple areas where therapeutics could play. Patisiran and inotersen are in a category that we refer to as RNAi therapies or silencers or antisense therapies where they basically target the liver and reduce total TTR production, and thereby there is a certain level of expectation or assumption that it therefore sort of stops the availability of TTR from misfolding or becoming pathogenic. Stabilizers, such as tafamidis, are intended to basically stabilize the tetramer, the normal functioning protein, and basically prevent it from falling it apart. In contrast, PRX004 works, as I mentioned earlier, a little bit more downstream on the pathway. So it's really focused on the misfolded or the non-native forms of the protein, including that which is deposited in the organ. So it directly targets those specific forms. It leaves the normal functioning tetramer alone, and the intention is that with the antibody function, that it's able to then activate and clear that misfolded protein that's within the body. So, that's sort of how I'd simply put kind of the element of differentiation. Obviously the patisiran, inotersen and tafamidis have all come with clinical data. And we look forward to sharing ours, albeit a Phase 1 study, some data from the lower dose cohorts at the end of the year that might give us some better insights as to how our clinical compound might be a bit more in play, but that's how I'd sort of describe the clinical difference between the landscape right now.

That's really helpful. Thank you. And one second one real quick, if you can. Just some color on the timing of moving the additional development candidates into the clinic, tau, et cetera. That would be great.

I think as of today, what we're saying is we'll move tau and abeta into cell line development this year. That's what we'll initiate. As you know, antibodies from a CMC perspective take time to make clinical supply, and I think there's a time period. And actually I think as we have more to update there as we move ourselves through the CMC, we'll give more of a specific update as to when to expect it in the clinic.

Our next question comes from Robert Hazlett of BTIG.

Just one on the early phase abeta development program. Just given the experience that your team has in that field, could you just give us the sense -- I know we're going to get data later this year, but could you just give us a sense of how that program might be differentiated versus what's going on in the field? And then just strategically with that program, given the capital requirements that would be contemplated for such a program in later stage development, even though you have a ton of cash right now, is that a core asset, or could that be partnered as well?

So maybe I'll -- Bert, thank you for the question. Maybe I'll answer the second part of your question first. But from a standpoint of how do we think long term about abeta and some of the neurodegenerative indications clearly in Alzheimer's, I think what we like about the clinical program and the aspects of it in the early parts of the year is we have a PET tracer to help guide us in the early parts of our clinical trials from the Phase 1 perspective. And clearly there's some also -- like the PRIME trial from Biogen, aducanumab has given us a roadmap as to how to think about clinical outcomes in early clinical stage trials. Ultimately, I think you're bringing up a good point, but I think we'll cross that -- those are things that we'll have to evaluate as we bring in clinical data to inform us in how to move forward. But I think clearly partnering and collaborating as we've done on tau would be high potential going forward in an abeta program.

And in terms of what we think is going to be differentiating our programs, our abeta program with other programs. And you know very well that we've been intimately related to this field since the beginning since the early days, and we are extremely excited with the latest suggestions that came from aducanumab trials. And I think taking all of that together, including the outcomes from solanezumab and crenezumab recently, we are convinced that in order for an antibody to have a higher probability of changing the clinical outcome of this patient population, both removal of amyloid plaques and targeting the soluble aggregates is an important aspect. And the antibodies that we are developing now and we plan to move forward into cell line development retain those qualities. So the ability to clear plaques, the ability to target soluble aggregates in a single entity. And since we are coming back to this space, we have the opportunity to create molecules that are superior in several angles. One, it's a natural to believe that you can increase the potency of an antibody versus the antibodies that are developed by other companies. We can also increase the efficacy of these antibodies in preventing, for example, the binding of toxic aggregates to neurons. And increasing even -- now on a more basic level, increasing the pharmacokinetics of the antibodies, which the antibodies that are now currently being tested are not -- we don't believe they are optimal. So these are just examples, but we are taking the advantage of being in this stage and observing how the field is developing, taking advantage of all that information, design the absolute best antibodies with in mind not only in terms of potency, but what is meaningful for the patient population that we are trying to target and ultimately the society.

I'm showing no further questions at this time. I'd like to turn the call back over to Gene Kinney for any closing remark.

Thank you, Valerie, and thank you all for joining us this afternoon. We appreciate your interest in Prothena, and over the coming months, we look forward to sharing updates on our programs. Thank you all very much.

Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you for your participant and have a wonderful day. You may all disconnect.