New data supports future indication expansionGenetic modifier...

New data supports future indication expansionGenetic modifier changes identified driven by ATL1102 treatment. Antisense have presented new data at the World Muscle Society (WMS) meeting garnered from an analysis of patient plasma samples from their completed Phase II study in DMD.Two key genetic modifiers, THBS1 and LTGFB4, that are related to the loss of ambulation (ability to walk) in DMD boys have been shown to be positively affected by ATL1102 treatment in their Phase II trial (Table 1). Simply, this data highlights that ATL1102 treatment could potentially be efficacious in the ambulant DMD population also (increasing their current DMD TAM by 100%), in addition to being applicable in other fibrotic indications (i.e. other muscular dystrophies, diabetic nephropathy etc). Antisense have filed a patent to protect these claims.Loss of Ambulation (LoA) genetic modifiers. There are several known genetic modifiers of rate of ambulation loss; which include Latent TGF-β binding protein 4 (LTBP4) and thrombospondin-1 (THBS1). LTBP4 and THBS1 have been shown to be positively affected by ATL1102 treatment over a 6-month period (Table 1). These two modifiers act on tissue-growth factor β (TGF-β), which is a central mediator of fibrosis. Fibrosis is the process of creating fibrous connective tissue which in a healthy person can be a reparative response to injury. In DMD patients’ fibrosis is excessive and detrimental (e.g. reduced muscle health; lung fibrosis affects breathing). Reducing fibrosis in DMD is a common drug target. Excessive fibrosis is also linked to loss of ambulation. Simply, the observed changes in THBS1(-49%) and LTBP4 (+20.7%) reflect positive effects on fibrotic mechanisms that have been shown to modify (i.e. slow) the rate of loss of ambulation. This may support benefit of ATL1102 treatment in ambulatory DMD. Table 1. Key changes identified from Phase II sample analysis, relative to healthy controls (directional changes) DMD baseline realtive to healthy controlDMD ATL1102- treated relative to healthy controlMean change from baseline with ATL1102treatment Meaning of change DMD genetic modifiers of ambulation loss via TGF- beta modulation T H B S 1 1. 0 4 0 . 7 1 - 4 9 %Positive effec ts on TGF- beta LTBP4 0.70 0.872 1% Positive opposing effec t on TGF- beta Ligands associated with inflammatory processes and muscle regeneration sVCAM- 1 0.77 0.93Supports mec hansim, reduc ing CD49d binding of ligand sVCAM- 1 18 % (ergo elevated c irc ulating levels) sCXCL16 0.91 1.18 30% Positive - CXCL16 associated with muscle regeneration.All values shown are medians normalised to a healthy control population (1.0) to simplify the relative movements of these markers. A value below 1 shows a lowered relative level compared to a healthy control population.Source: Antisense, Wilsons.Ambulant DMD population expands TAM by 100%. Expansion of the ATL1102 addressable market to include ambulant DMD populations doubles the patient pool, given that ambulant boys comprise ~50% of all DMD patients. We currently model ATL1102 potential market penetration of 25-30% between US and EU5 markets based on a non-ambulant population only; this represents total (ambulant + non- ambulant) DMD peak market penetration of 8-12% in our current model. There is future scope to expand this should ATL1102 progress to Phase II studies and show meaningful benefit. Noting that the approvable endpoint in ambulant populations is different as it focuses on walking ability (NSAA vs PUL2.0).PIP includes scope for ambulant DMD patient clinical studies. Antisense have already included scope for evaluation of ATL1102 in ambulant populations within their PIP, just to ensure the PIP is comprehensive of future potential trial activities. The view that ATL1102 could be a relevant treatment for ambulant populations is not a new one, however this new data does support the potential of ATL1102 to modify or delay ambulation loss and therefore eventually moving it into trials of boys who still have some degree of ambulatory ability is a relevant step.Does not affect current EU trial plans. This does not affect the current Phase IIb trial plans in Europe. We understand this trial is still to be focused on non-ambulant boys exclusively given the high unmet clinical need in this population and the positive Phase II data needed to support iMechanism strengthened; reach expandedWe maintain our OVERWEIGHT recommendation on Antisense Therapeutics (ANP) and risked PT of $0.63 per share. Recent presentations at the World Muscle Society (WMS) meeting (20-24 Sept) from those working in DMD have reminded us that ATL1102 is positioned well versus peer approaches (i.e. Capricor) and that DMD gene therapies continue to struggle with safety setbacks (e.g. recent Pfizer narrowing of Phase III trial inclusion due to serious adverse events). Importantly, we have a growing understanding and comfort in the mechanistic basis of ATL1102’s effects in DMD boys from the Phase II trial data but also from the recently presented proteomics analysis that has shown potential for ATL1102 to expand into ambulant DMD cohorts in the future. In this note we summarise these developments, outline the mechanistic data supporting ATL1102 thus far and provide a head to head update on ATL1102 efficacy vs CAP-1002, a competitor in the non-ambulant space that has just released final Phase II data.As a reminder, the key catalyst we await is feedback from the European regulator to bed down ANP’s Phase IIb trial design and plans which is due at any point. This paves the way for CTA submission, approval and trial initiation, still planned for CY21.Key pointsAnalysis of Phase II data further supports ATL1102 mechanism; expands potential TAM. Data showing that ATL1102 treatment has caused positive changes to known genetic modifiers of loss of ambulation (LTBP4, THBS1) supports its future expansion into ambulant DMD cohorts. We note ANP have already included scope for ambulant populations within their EU regulator discussions. This doubles the potential DMD TAM (in the longer term) which we model as restricted to non-ambulant DMD patients only.PDCO feedback due at any point. We anticipate feedback from the European regulator to confirm Phase IIb study design at any point in the next quarter. This is a key step in providing clarity on trial design but also allows for CTA submission and trial start (CY21).Capital required to support Phase IIb study. Antisense had $6M net cash as at end FY21. We understand that the manufacture of ATL1102 for the Phase IIb study is complete and trial preparations are under way. We have previously noted we expect the EU Phase IIb study to cost ~$20-25M with potential further costs for open-label extension phases.Risks and catalystsRisks: a) unfavourable clinical trial results; b) lack of capital to support expenses; c) share dilution; d) competitor development of DMD therapies Catalysts: a) EMA trial approval; b) FDA engagement & IND approval; c) board renewal; d) partnering opportunities.Recommendation12-mth target price (AUD) Share price @ 28-Sep-21 (AUD) Forecast 12-mth capital return Forecast 12-mth dividend yield 12-mth total shareholder New data supports future indication expansionGenetic modifier changes identified driven by ATL1102 treatment. Antisense have presented new data at the World Muscle Society (WMS) meeting garnered from an analysis of patient plasma samples from their completed Phase II study in DMD.Two key genetic modifiers, THBS1 and LTGFB4, that are related to the loss of ambulation (ability to walk) in DMD boys have been shown to be positively affected by ATL1102 treatment in their Phase II trial (Table 1). Simply, this data highlights that ATL1102 treatment could potentially be efficacious in the ambulant DMD population also (increasing their current DMD TAM by 100%), in addition to being applicable in New data supports future indication expansionGenetic modifier changes identified driven by ATL1102 treatment. Antisense have presented new data at the World Muscle Society (WMS) meeting garnered from an analysis of patient plasma samples from their completed Phase II study in DMD.Two key genetic modifiers, THBS1 and LTGFB4, that are related to the loss of ambulation (ability to walk) in DMD boys have been shown to be positively affected by ATL1102 treatment in their Phase II trial (Table 1). Simply, this data highlights that ATL1102 treatment could potentially be efficacious in the ambulant DMD population also (increasing their current DMD TAM by 100%), in addition to being applicable in other fibrotic indications (i.e. other muscular dystrophies, diabetic nephropathy etc). Antisense have filed a patent to protect these claims.Loss of Ambulation (LoA) genetic modifiers. There are several known genetic modifiers of rate of ambulation loss; which include Latent TGF-β binding protein 4 (LTBP4) and thrombospondin-1 (THBS1). LTBP4 and THBS1 have been shown to be positively affected by ATL1102 treatment over a 6-month period (Table 1). These two modifiers act on tissue-growth factor β (TGF-β), which is a central mediator of fibrosis. Fibrosis is the process of creating fibrous connective tissue which in a healthy person can be a reparative response to injury. In DMD patients’ fibrosis is excessive and detrimental (e.g. reduced muscle health; lung fibrosis affects breathing). Reducing fibrosis in DMD is a common drug target. Excessive fibrosis is also linked to loss of ambulation. Simply, the observed changes in THBS1(-49%) and LTBP4