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12/2/24

Countdown on to AdAlta trial results as biotech advances partner discussions

• AdAlta AD-214 Phase I extension study results forecast for release at end of February
• Results crucial as AdAlta looks to advance partnering discussions to take asset to Phase II trial
• 1AD’s trademarked i-body platform advancing next generation of protein therapeutics

Special Report: The countdown is on to the results of AdAlta’s AD-214 Phase I extension study on track later this month with the clinical stage biotech gearing up for partnering opportunities to advance next phase studies.

The AdAlta (ASX:1AD) Phase I extension study for the use of AD-214 in treatment of Idiopathic Pulmonary Fibrosis (IPF) – a common disease that causes thickening and scarring (fibrosis) of lung tissue – is aimed at reinforcing the safety profile and potential efficacy of the planned Phase II dose.

All participants in the Phase I extension study have successfully received all four doses.

The interim findings to date reveal no dose-limiting toxicity, no need for dose interruptions and no necessity for administering medication to handle infusion reactions.

The 10mg/kg dose seems to also exhibit fewer mild infusion-related reactions compared to those observed with the 5 mg/kg dose in the initial Phase I study.

The bioavailability of 1AD’s AD-214 and the blocking of its target receptor CXCR4 aligns with previous single-dose studies, maintains consistency across all three doses, and importantly, aligns with the predictions of dose simulation models.

1AD managing director and CEO Tim Oldham said the Phase I extension study was the most rigorous test that could be given to the molecule.

“Everything we’ve seen so far says we are going to get a result in line or better than what we’ve seen previously,” he says.

Partners to advance AD-214 to Phase II studies

Oldham says 1AD is actively cultivating partnering opportunities to support Phase II clinical studies of its lead therapeutic.

Two strategies are being pursued in parallel; fully out-licensing AD-214 to larger biopharmaceutical companies, or co-developing AD-214 in a third-party financed, asset specific investment vehicle.

“The extension study results are important to this process because our pharma licencing partners and potential investors in the asset want to see the drug is safe at the doses that are going to be administered in Phase II and that there’s no concerning immune responses,” Oldham says.

“We are on track, interim results look good, but obviously we won’t know the exact results until the end of this month.”

Broad utility of the i-body platform

“The AD-214 extension study results will do more than help unlock the partnering initiatives AdAlta has been working towards for so long. Those partnering initiatives are key to unlocking the future potential of the i-body platform,” Oldham says.

“We’ve already seen the examples of the potential in our collaboration with Carina Biotech in the CAR-T space, which we think is a massive opportunity.”

The company’s collaboration with Carina Biotech, which is unlisted but backed by Andrew Forrest investment vehicles, is focused on the emerging oncology treatment area of Chimeric antigen receptor T-Cell (CAR-T Cell) therapy.

CAR-T cell therapy weaponises T-cells – a type of immune white blood cell – to recognise and destroy cancer cells.

“Essentially, many companies have the capability to engineer the immune cells, but our i-bodies provide the smallest possible building block to enable them to target their CAR-T platform to different types of tumours,” Oldham says.

“We have spoken to a number of CAR-T cell companies about the opportunity and Carina is the first of potentially several with whom we will collaborate.

“We’re also seeing the broad potential of the i-body as a drug discovery tool with the recent discovery of a novel anti-malaria i-body.”

In collaboration with LaTrobe University, 1AD has discovered a new i-body, believed to be the first ever antibody-like molecule capable of protecting red blood cells and liver cells against invasion by multiple strains of the malaria parasite.

The i-body platform

1AD was established based on its trademarked i-body platform, aiming to explore and advance the next generation of protein therapeutics.

Oldham says an i-body is a distinctive human protein combining the advantages of small molecules in terms of size and stability with the characteristics of antibodies, offering new treatment options for certain illnesses.

1AD’s internal pipeline places a significant emphasis on G protein-coupled receptors (GPCRs), a crucial class of drug targets constituting approximately one-third of all approved drugs.

There are only two approved antibody drugs in the GPCR class. Given the difficulty antibodies face in addressing GPCR-mediated diseases, the i-bodies developed by 1AD could be uniquely effective.

Currently, 1AD’s GPCR-targeted pipeline is concentrated on diseases related to fibrosis, inflammation, and cancer.

AD-214 is the first drug 1AD developed using the i-body platform, starting back in 2015. The biotech has invested around $45 million in developing 1AD to the end of Phase 1.

Focus on early-stage assets enables diversification and risk reduction

Oldham says 1AD does not focus on funding larger scale advanced clinical trials, but rather on earlier-stage assets.

“It’s very common in biotech for companies to operate at a specific stage of the development pipeline,” he says.

“Because of our technology, we’re good at drug discovery, capable of taking drugs through Phase I to demonstrate they’re safe, but at that point hand them over to those with deeper pockets and better clinical expertise to do the clinical proof of concept.

“What our shareholders want to see is multiple shots at goals that we’re hitting on a regular basis, and we can’t do that with a four-year Phase II program.”

He says larger biotechs further along the drug pipeline have a greater risk appetite for advanced stage trials of de-risked assets, realising the potential valuation uplift.

“They’re willing to take that defined risk over a longer period of time through Phase II and III, but often they do not want exposure to the public markets,” Oldham says.

Oldham says 1AD’s current key focus is on realising a return on the investment the company has made in developing AD-214, which is the first product it’s taken as far possible based on its strategy.

“Our strategy and business model now says it’s time for others to take over AD-214 beyond ourselves,” he says.

“Realising that goal unlocks all the other strategic opportunities for this company.”

Oldham says the Phase II program for AD-214 with all the bells and whistles that we would like to put on it would cost about $40-60 million over the next four years.

“We either out licence it to bigger pharmaceutical companies who have the resources to take it all the way or we put it into a different entity or vehicle that attracts different types of investors with a different risk appetite to take it to the next stage,” he says.

“That’s very common in the sector because big pharma can’t hope to generate all the leads they need in-house so rely on this plethora of biotech companies like AdAlta and academic institutions to fuel the front end of their pipeline.

“They are machines who can run the larger Phase II and Phase III clinical programs more effectively than any of us can.”

1AD in January attended the JPMorgan Healthcare week in San Francisco, where it took part in potential partnering discussions.

Strong Q2 FY24 results

Oldham says during Q2 FY24 the company strengthened its balance sheet, maintaining its cash reserves to ensure it has the financial resources necessary to progress partnering discussions while retiring debt related to advances against its R&D tax incentive rebate.

1AD has a loan facility under the Victorian Government R&D Tax Cash Flow Incentive scheme, with a $2 million drawn down at the end of Q2 FY24 after repaying $2 million during the quarter from its RDTI rebate for FY23.

A further repayment of $600k was made in January 2024. The company finished Q2 FY24 with an improved cash balance of $3.68 million after an oversubscribed placement offer raised $1.65 million.

“We are grateful for the additional funds contributed by shareholders during the quarter that will allow us to further those partnering discussions once final results from this study are received,” Oldham says.