Hello, and welcome again to the fifth annual H.C. Wainwright's virtual conference for the viral hepatitis. My name is Ed Arce, and I'm one of the senior biotech analysts here at HCW. And I'm very pleased to have our next presenting company, Aligos Therapeutics, and representing the company is the CEO, Lawrence Blatt. Lawrence, thanks for joining. Welcome. Thank you, Ed, and thanks for inviting us to the conference. Absolutely. So why don't we get started with just a brief overview of Aligos, perhaps, and just a recap of what we can look forward to over the next twelve to eighteen months? Yeah. Thank you. So Aligos is a company focused on viral and liver diseases. We're gonna talk about our treatment for chronic hepatitis B today, which is both a viral and a liver disease. In addition to the HBV compound that we'll go into great detail on today, we also have a compound for another liver disease, MASH. It's a beta thyroid agonist, and we presented yesterday at the conference on that molecule. The other molecule we have in the portfolio is being funded by the NIAID, as well as the Ministry of Health in the U.K., and that's a pan-coronavirus protease inhibitor. We won't be talking about that compound today. Right. Okay. So as you mentioned, your lead for HBV is ALG-00184, which I'll refer to as one eighty-four. And that's a capsid assembly modulator, or CAM. And those who have followed this space for a few years know that there's been several failures with CAM agents over the last few years. So what makes one eight four different? And is it related to your pharmacology in any way? Yeah, so one eight four is a compound. We started working on this in collaboration with Dr. Ray Schinazi at Emory University. You may know Ray's lab was the lab that invented Sovaldi, one of the key drugs for HCV. And likewise, in HCV, there had been a number of nucleoside analogues in HCV that failed prior to Sovaldi coming. So Ray kind of understood pharmacology and understood the things that might make a drug successful. What Ray was able to do in his lab with his chemist was to identify picomolar potent capsid assembly modulators, and I'll explain why that's really important in just a moment. And what we did was to take Ray's chemistry and enhance it. So Ray's molecules were highly potent, but they did not have good exposure, and they did not have good pharmacological properties. So we took the compounds that he had and improved, through chemistry, the pharmacology. Notably, we increased the oral absorption up to 80%, and we have a moiety on the compound that allows for high liver uptake. We have the best of both worlds. We have great exposure and great potency with the molecule, and that has resulted in differential data that we'll go through in great detail today for our compound. Notably, and if we can go to the mechanistic slide, capsid assembly modulators can have two effects in the cell that really affect both of the major components of the HBV life cycle. So the first is that capsid assembly modulators can block the encapsulation of pre-genomic RNA, and all capsid assembly modulators can do that, and so you saw the early compounds all had knockdown of HBV DNA. But what requires a very potent capsid assembly modulator is to interfere with the replenishment and the establishment of cccDNA. And because our compound is so potent, we're now able, for the first time, to show this clinically, that not only do we block HBV replication or the production of HBV DNA, as well as production of HBV RNA, but we also block antigen production, and we believe that's because we're reducing the pool of cccDNA by blocking replenishment and establishment of cccDNA. And this is markedly different than nucleoside analogues, which only block the replication step by blocking the conversion of the pre-genomic RNA to DNA. So that's why we've been more successful. We have a highly potent compound. It accumulates in the liver at very high concentration and allows us to evoke both the primary and the secondary mechanism for capsid assembly modulators. All right, so, overall, these points of differentiation that you laid out, this is essentially the reason why you believe one eight four is potentially a best-in-class CAM? Right now, the data we have demonstrate there's no other CAM that has displayed the activity that we have. So, we have potent knockdown of HBV DNA out to 72 weeks. We've reported no breakthrough. The earlier CAM molecules had drug resistance occurring between 12 and 24 weeks, so we don't see any resistance occurring so far in our clinical trials. And in addition to that, again, we're invoking the secondary mechanism, which is allowing for marked reductions in HBV antigen, marked reduction in HBV RNA, as well as HBV DNA. Right. Okay. And then, unlike some of the other companies in the space, Aligos is not pursuing a functional cure as an approval pathway. Why is that? And then what is your regulatory strategy instead of that? Yeah Is that strategy validated? Yeah, that's a great question. So, let's go to, if we can, the slide that kind of looks at the history of where we've been in HBV therapeutics. So, you know, a lot of people that were involved in virology of HCV, including myself and the team that we have here at Aligos, when HCV became solved from a virology point of view, so we now have therapies on the market for HCV that cause essentially cure in nearly all patients, we turned our attention to HBV. And at that time, there was a KOL event actually led by Anna Lok, who is a great key opinion leader, really a pioneer in the field of HBV, and actually somebody we work with closely. Anna had proposed advancing therapies to what we call functional cure. What we think about in functional cure is that, and unlike HCV, where we're essentially eradicating the virus, a functional cure in HBV is a shift in the immune status of the patient from one where the immune system allows the virus to replicate, so the immune system is being suppressed by the production of HBV antigens, to one where the immune system is controlling HBV. This does occur spontaneously in a very small number of patients. The goal was, at that point, "Okay, can we affect functional cure?" The hypothesis at that point was, if we knock down the production of HBV antigens, especially HBV surface antigen, can we have a functional cure? And meaning, will the immune system become non-suppressed? Will it reconstitute, and will the patient essentially cause this shift in the immune system, and that's been largely proven with siRNA therapies to not be true, so you can lower HBV surface antigen to great levels with siRNAs, but you do not get functional cure. In fact, when you stop therapy and the HBV DNA and RNA rebound, you also see HBs antigen rebound, so the hypothesis that you can knock down HBs antigen and get functional cure has been disproven. Now, there are some people that are focusing on small patient populations, so there's a drug from GSK called bepirovirsen, which is an antisense oligonucleotide that not only functions by knocking down HBs antigen through an antisense mechanism, but in fact is serendipitously a TLR8 agonist and causes immunoactivation. That drug works in patients who have baseline HBeAg of 10 to the third international unit or lower, and that constitutes about 20% of HBeAg-negative patients. Mm ... about 10% overall of all the HBV patients are even eligible for that therapy. And in their phase II studies, now moving into phase III, they're looking at something like a 20% response rate or 20% functional cure rate in the patients that you select that have this baseline S antigen. So this is a very small patient population. It doesn't benefit all patients. It doesn't touch e antigen positive patients, and it doesn't touch the majority of e antigen negative patients. So functional cure is elusive. I think there'll be functional cure therapies for a small patient population, but what are we gonna do with all of the other patients? What we'll show you in our data set is that our drug can address all patients, any patient, with e antigen positivity, any patient with e antigen negatively, regardless of their baseline viral load, whether measured by HBV DNA, RNA, or HBsAg. So this is a therapy for everybody, and, as you'll see in our data set, we're evoking a number of mechanisms that we talked about, and that's resulting in blocking multiple steps of the HBV life cycle that aren't affected by HBV anti-nucleoside analog. Great. All right, so let's get into that clinical data for 184. In your robust phase I trial, which has four parts, and is still ongoing to dose patients up to 96 weeks, as you mentioned, there are three parts which are now complete. What is the trial design overall for the phase I? Yeah. What have you learned so far from the first three parts? Yeah. So before I do that, I do wanna go back. I didn't answer one of your questions in your first question, then I'll jump right into this. Is this chronic suppression a validated pathway? Yeah. The answer is yes, it is, and it's part of the guidelines, the international guidelines for HBV. In fact, all of the previous drugs, the nucleoside analogs and nucleotide analogs, were approved based on this, and we have now had discussions with the FDA and the Chinese regulatory authority, giving us the green light to move forward with chronic suppression, and the key is that we don't have drug resistance as monotherapy. To run the trials in chronic suppression, you have to do monotherapy. We are currently waiting for feedback from the EMEA, but we would expect, based on the guidelines, get the same feedback, so yes, this is a validated regulatory pathway. We have written feedback from regulatory agencies agreeing that we can go forward with this pathway, and that indeed is what we're going to do. Now let's go ahead and look at the data of this compound, so we go to the first data slide. This is an E-antigen positive patient treated with one eight four as monotherapy, and it's important to note, you might ask, "Well, why did you even do monotherapy?", and that was based on feedback from the FDA. We had initially gone in and talked to the FDA about doing combination with Nucs, because previous CAMs were shown to be causing drug resistance very early on, and we were concerned before we ran our clinical trials that we might also see drug resistance, so the feedback from them was, "Look, your drug is potent. You should include a monotherapy arm.", so we had three arms in this portion of the study. HBV E positive patients. One group was treated for twelve weeks with entecavir alone, which is a nucleoside analog, standard of care. At the end of twelve weeks, they were crossed over to receive entecavir plus one eight four. Another group was one eight four plus entecavir, that was the initial design. And then we added on what we call cohort B, which is the monotherapy arm, and that was really, at the feedback of the FDA. And for that, we have half the patients who are e-positive and half the patients who are e-negative. Let's go ahead and look at the data. So what we see over the first twelve weeks is that if you compare either one eight four plus entecavir or one eight four alone versus entecavir alone, there's about a log and a half greater depression of HBV DNA. When you cross over those entecavir patients to receive one eight four in addition to entecavir, you see their line go straight down, so the suppression occurs. This is a very important bit of data, because it's sort of like if we took a patient that was chronically suppressed with a nucleoside analog, what would happen to them if we added one eight four, or even rolled them over to one eight four therapy? Interesting, in this graph, you can see that there's no difference between one eight four plus entecavir or one eight four monotherapy. You also see the line doesn't pop up, meaning there's no drug resistance. And you might ask, "Well, why isn't entecavir adding anything to one eight four?" And that's because if you think about the mechanism of each drug, entecavir is blocking the reverse transcription of the pre-genomic RNA into DNA, but one eight four blocks the encapsulation of the pre-genomic RNA. So if you're completely blocking encapsulation, there's no substrate for a nucleoside analog to work on, and therefore, there's no additive benefit of adding that. Interestingly, the early CAMs were shown to be a benefit when you added nucleoside analogs, because they weren't getting complete blocking of the encapsulation- Mm ... as we are. Now let's look at the individual data for each of the monotherapy patients. These are E-antigen positive patients. These patients start with extremely high viral load. Notably, none of these patients would qualify for the bepirovirsen study. They have HBV DNA as high as ten to the ninth and their HBsAg baseline is as high as ten to the seventh, so not even close to qualifying for bepirovirsen. Now, it's also important to note that the regulatory guideline is that the primary approvable endpoint for chronic suppression is the percent of patients that go below the limit of quantitation for the most sensitive assay that's available at the time that you do the study. In the time since the last approval of TAF, the assay has improved. TAF was approved based on a cutoff of 29 international units. The assay is now at 10 international units. It's actually a higher standard now. Given this assay, I'm gonna show you how that compares in a moment, but given this assay, what we see is 60% of these very difficult-to-treat patients, by week 48, are below the cutoff, they would be qualified as responders. Then by week 72, 80% will be reporting what happens at a later time point at AASLD. Now, what you note is there's no breakthrough in these patients, and so we're seeing very nice knockdown of HBV DNA in these very difficult-to-treat patients. Go to the next slide. Now, this is looking again in the same patients of HBV RNA. Now, why is this important? It's because HBV RNA plays a role in oncogenesis. So HBV RNA actually binds to a microRNA called miR-122. miR-122 is a tumor suppressor, so when you have high levels of HBV RNA, you're actually opening the door for oncogenesis. Our drug, because we don't encapsulate the pre-genomic RNA, it's degraded within the cell, and we see nice knockdown of HBV RNA. Entecavir, because it only functions on that reverse transcriptase step, has no effect on HBV RNA. And you can see when they cross over to receive one eight four, the HBV RNA goes right down. Next slide. Now we're gonna look at the E-antigen negative patients. These patients are a little easier to get at. They have lower baseline viral loads, something like ten to the fifth HBV DNA. And you can see a very rapid response here. Let's look at the individual patient. So using a cutoff of 10 at week 48, we have 100% of our patients below 10, so that's the primary approvable endpoint. Interestingly, if you use the cutoff of whether or not they're detectable or not, we have 91% of our patients undetectable, so we can't find any HBV DNA in these patients by the current assay at all. So we're really knocking down this quite to low levels. Now, what's really important to mention is that Gilead has done a study where they've taken patients' serum that are below 29, but above 10, and they've infected experimental mice with that serum, and that HBV DNA is infectious. So, even though they're below 29, they're making infectious particles, which means they're getting new hepatocytes infected, they're replenishing cccDNA, and the life cycle of HBV is continuing. So again, our drug is affecting multiple nodes of that life cycle. We'll show you data on that in just a moment. Let's look at the HBV RNA now for the e antigen negative patients, and you can see a rapid decline in RNA, just as you did for the HBV e antigen positive patient. Now, how does this stack up, and how do we think about phase 2 and phase 3? So let's look at the historical data on the next slide. This is data taken from the TAF phase 3 study. Again, they had a lower limit of quantitation of 29, so that was their approvable endpoint, but their assay did go down to detection at 10, so we know what they would be at 10. In the TAF study in E-antigen negative patients, they had 94%, so that's kind of the number you have in your head when you think about TAF. But if they were to run the study today, we know that their number would be 21% and 17%, respectively. So the drop-off between patients who are below 29 or below 10 is quite dramatic, and you might say, "Well, okay, then just wait a little longer, and they'll get there, and by two years, they're only at a 33% and 31%, respectively, below 10." Remember, in E negatives, we're at a 100% at week 48. We know we're at 100% at week 72. We don't expect that to change by week 96. Again, the primary approvable endpoint is those below 10 at week 48. So we would be comparing something like 100% to something like 20%. Now, if you go to the HBeAg-positive patients, the more difficult to treat patients, at a cutoff of 29, they had 67% and 64%, respectively. At 29, we had 100%. That's not really relevant. What's relevant is below 10, and the below 10 in their phase 3 study, they had no patients below 10 who were HBeAg positive. We had 60%, so we'd be comparing 60, and we can say conservatively, it's maybe around 10 or 20, and that still would give you a highly statistical difference. Remember, at week 72, we're, we have 80% negative. By 96 in the e positives, they have around 10%-14% negative. So any way you look at it, based on the primary approvable endpoint, we have superiority. And in order to show statistical significance, with this kind of superiority, this great distance between our response and their response, you need about 30-40 patients per arm, and we'll be doing that in phase 2. We'll be looking at an active comparator, and running both e positives and e negatives, and looking at week 48. Now, one of the things I think is really important to mention is that there's sort of two hurdles that we think about. One, one is regulatory approval, and you can see, based on regulatory approval, that we could have superiority, and given the data we have to date, it's a relatively low risk that we're gonna meet that superiority. But then the next hurdle is, okay, you know, why would you use this drug? If you're a hepatologist, if you're a patient, why would you want to go on this drug? And the answer is: because of all the secondary endpoints that we're gonna demonstrate, so if we go to the next slide, we're gonna be looking at a number of important secondary endpoints, and that is antigen reduction, so quantitatively, we're... and I'll show you the data in a moment, we're reducing S antigen, we're reducing HBV core-related antigen, we're reducing E-antigen, and that's important because these are all prognostic indicators of outcome. So the higher your antigen whenever you're looking at these patients, the more likely you are to go on to end-stage liver disease and liver cancer. In addition, we're gonna be doing paired biopsies, so we're gonna look directly at cccDNA at the beginning of the study and at the end of the study, and we hope to show reduction in HBV cccDNA, which we believe will show based on the data we have. And also, we're gonna be looking at the amount of HBV DNA that integrates into the host chromosome. So as a retrovirus, HBV integrates into the host genome, and it does so randomly, and it can integrate in front of oncogenes and turn on oncogenes. So the level of integration has been correlated with poor prognostic for generating liver cancer. So when we take all these endpoints, seroconversion of E-antigen positive to E-negative, reduction of antigens, reduction of cccDNA, reduction of integrated HBV DNA, and reduction of HBV RNA to below detection, these are all things that Nucs don't do. So that's the second point of differentiation, and that would be a reason for why you would go on this drug, when you were, could go on a nucleoside or nucleotide analog. I think I'll pause there. I gave you a kind of a long-winded answer there. Sure. No, that's a very comprehensive review of your data to date. So I just wanted to, in the interest of time, switch to your planned phase II? Yeah. I know a lot of the details are out, but you're still planning to conclude some phase two enabling activity and finish that by middle of next year. Wondering what you can say about the phase two design and the endpoints at this point? Yeah. So we're currently finishing up the phase II enabling activities, and actually, for this program, those will be done earlier. They'll be done more like the first quarter of next year, and it's really all around manufacturing, and we're doing that now, just completing those activities. We already have the full preclinical package on product toxicology, and so we'll be filing our IND application for this molecule, 'cause we'll be conducting a lot of the phase two in the U.S., and as you know, we've had a lot of interaction with the FDA on the molecule, so they're well aware of the molecule, and so far very supportive of what we're doing. Phase II wo will be relatively straightforward. It's gonna be a blinded active comparator study. We have not announced what the active comparator will be, but it'll be a leading HBV nucleoside or nucleotide analog. The data for these nucs are quite comparable, so it almost doesn't matter which one we use. They all result in about the same rate of suppression with the newer nuc. Some of the old nucs obviously get less suppression, but any of the tenofovir drugs or entecavir drugs will give you about the same rate of response, so we'll do an active comparator. We'll do an E-antigen negative group and an E-antigen positive group. They'll be randomized to either our drug or the active comparator, and the initial part of the study will go for 48 weeks, where we do an endpoint. Of course, we'll look at safety tolerability, but we'll look at the portion of patients who are, HBV negative, as defined by going below the cutoff for the most sensitive assay. So if the data hold up, we should see remarkable difference between our drug as compared to the entecavir or tenofovir drug. And again, we'll be looking at all these other secondary endpoints, including the paired biopsies that will give us a reduction in-