ALPN - Alpine Immune: Rebuilding Itself From Scratch But Long Way To Go Before Proof

2023-03-29 07:37:25 ET

Summary

• Last year, ALPN ditched its lead program after a second patient death in a CD28 molecule, a previously notorious pathway.
• ALPN has started all over again, with backing from a few big pharma.
• They do have a decent cash runway.

Alpine Immune Sciences ( ALPN ) discovers immunotherapies for autoimmune and inflammatory diseases. They had a program in cancer which was terminated last year after producing poor safety data, including multiple patient deaths. This program was for davoceticept (ALPN-202), which was an anti-CD28 molecule. CD28 antagonism has had its hiccups, most notably with TGN1412, which when given to healthy volunteers triggered terrible cytokine release syndrome, dampening enthusiasm in the entire CD28 pathway. ALPN thought it had a way around the problem, but in March last year there was a patient death in a phase 1 trial due to cardiogenic shock. The FDA placed the program on a clinical hold, but in October, there was a second patient death due to the same thing, cardiogenic shock. The stock tanked, and the company was on near-collapse. They have managed to abandon that program and get on with life, but they have had to start from scratch.

Alpine Immune has tie-ups with AbbVie, Horizon and AdaptImmune. The pipeline looks as follows:

Lead candidate ALPN-303, or povetacicept, is a dual antagonist of the B cell activating factor, or BAFF, and a proliferation inducing ligand, or APRIL, which play key roles in the activation, development, and survival of B cells ( 10k ). The molecule is wholly owned, and is in phase 1 trials. Povetacicept is in development for systemic lupus erythematosus or SLE. In preclinical studies, it has exhibited greater potency than its wild-type versions, as well as over other BAFF or APRIL monotherapies. In a randomized, place-controlled phase 1 study, the molecule was well-tolerated and demonstrated excellent pk/pd properties. The trial was in healthy volunteers. Next step is to try it in a basket trial of renal and heme cancers, and then a phase 2 proof of concept trial in SLE. The basket study, called RUBY-3 basket study, has already begun . It is the first patient-based study for Povetacicept, and the indications are autoimmune glomerulonephritis indications including IgA nephropathy, lupus nephritis, and primary membranous nephropathy. Initial data is expected by the end of 2023.

Right now, there’s a lot of preclinical data demonstrating positive aspects of this molecule. It is all good, there’s no problem with all that, but I am not going to discuss preclinical data much due to the worry of creating false expectations. Preclinical data is indicative. If preclinical data is negative, you don’t go forward. If preclinical data is positive, you still have to go forward and complete the trial process before the FDA will rule on your drug. Thus, there’s not much profit in taking preclinical data too much into consideration, except that it indicates the drug is active.

Another molecule is ALPN-101, or acazicolcept, a dual Inducible T cell Costimulator, or ICOS, and CD28 antagonist, which is licensed to AbbVie and is in phase 2 trials. ICOS is the extra step here; existing molecules only block CD28. The AbbVie partnership is worth $60mn in upfront fees and $805bn in potential milestones. The primary endpoint of the ongoing phase 2 trial is safety, with efficacy endpoints in the secondary list. I thought, being a phase 2 trial, that there will be a phase 1, but unfortunately, there isn’t. Thus, ALPN really has no clinical data at all, as of now.

The company recently signed a deal with newly launched patient data provider Truveta, which they hope will accelerate their patient enrolment schedule. Truveta was launched in 2021 and is backed by 16 of the major US healthcare providers like Tenet Health, Providence and CommonSpirit Health.

Financials

ALPN has a market cap of $334mn and a cash balance of $273mn as of December. Research and development expenses for the fourth quarter ended December 31st 2022, were $18.8 million, while general and administrative expenses were $4.4 million. That gives them a cash runway of 9-10 quarters, or at least until 2025.

ALPN is 80% owned by institutions and PE/VC funds, with the largest owner being a China-focused fund named DECHENG CAPITAL CHINA LIFE SCIENCES USD FUND III, L.P. at 26%, followed by the usual assortment of US funds. Another 12% is owned by ALPINE IMMUNOSCIENCES, L.P. Decheng Capital is founded and managed by Min Cui, who also sits on ALPN’s board.

Insiders have regularly bought and sold stock in the last couple of years.

Bottomline

Not a lot is going on here. I have sometimes been asked: why would you cover a company if nothing much is going on there? Well, first of all, I may tell you there isn’t much, but to tell you that, I have to look through a lot of material. Secondly, the way some retail investors invest sometimes, it is important to tell them there’s not much of interest in a company. Otherwise, it is easy to get confused by the material coming out of early stage companies. So, nothing much is happening at ALPN right now, and not a lot of great interest will happen in the next few months. ALPN stock, I presume, will trade sideways, giving us plenty of time to decide if there’s anything that grabs our interest. Meanwhile, we will wait in the sidelines.

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