Business Overview and History

Acelyrin, Inc. (SLRN) is a late-stage clinical biopharma company at the forefront of developing transformative medicines for immunology. With a strategic focus on addressing unmet needs in immune-mediated diseases, Acelyrin has built a robust pipeline of promising product candidates that have the potential to revolutionize treatment paradigms.

Acelyrin was incorporated in the State of Delaware on July 27, 2020, with the goal of identifying, acquiring, and accelerating the development and commercialization of innovative therapies. Since its inception, the company has devoted substantially all of its resources to organizing the company, hiring personnel, business planning, acquiring and developing its product candidates, performing research and development, enabling manufacturing activities in support of its product development efforts, establishing and protecting its intellectual property portfolio, raising capital, and providing general and administrative support for these activities.

The company did not have any significant operations from the inception date until August 2021. On August 9, 2021, Acelyrin entered into a license and collaboration agreement with Affibody AB, a Swedish company, granting the company exclusive worldwide rights to develop, manufacture, and commercialize izokibep, an IL-17A inhibitor, for the treatment of various inflammatory and autoimmune disorders, excluding rights in certain Asian and Nordic countries.

On January 4, 2023, Acelyrin closed the acquisition of ValenzaBio, Inc., a privately held company developing therapies for autoimmune and inflammatory diseases. The ValenzaBio acquisition added additional assets to Acelyrin's portfolio, including lonigutamab, an anti-IGF-1R antibody, and SLRN-517, a monoclonal antibody.

Acelyrin has not generated any revenue from product sales to date. The company has incurred significant losses and negative cash flows from operations since its inception. During the nine months ended September 30, 2024 and 2023, the company incurred net losses of $169.20 million and $286.40 million, respectively. As of September 30, 2024, the company had an accumulated deficit of $657.90 million. Substantially all of Acelyrin's losses have resulted from expenses incurred in connection with the acquisition and development of its pipeline and from general and administrative costs associated with its operations.

Acelyrin's lead product candidate, lonigutamab, is currently in late-stage development for the treatment of thyroid eye disease (TED), a progressive and vision-threatening autoimmune disease. The company has reported positive proof-of-concept data, demonstrating rapid improvements in proptosis and clinical activity scores within three weeks of treatment with subcutaneously administered lonigutamab. Acelyrin has also completed a successful end-of-phase 2 meeting with the FDA, aligning on the key elements of its phase 3 registrational program for lonigutamab in TED, which is expected to be initiated in the first quarter of 2025.

In addition to lonigutamab, Acelyrin is advancing izokibep in a phase 2b/3 trial for the treatment of non-infectious non-anterior uveitis, a rare and sight-threatening inflammatory eye condition. The company expects to report topline results from this trial in December 2024.

Financial Overview

Financials

As of September 30, 2024, Acelyrin reported a strong financial position, with $562.4 million in cash, cash equivalents, and short-term marketable securities. This is projected to provide a cash runway to mid-2027, well beyond the expected completion of the planned phase 3 trials and BLA-enabling activities for lonigutamab.

For the nine months ended September 30, 2024, Acelyrin reported a net loss of $169.2 million, compared to a net loss of $286.4 million for the same period in 2023. The decrease in net loss was primarily driven by reduced clinical development expenses as the phase 3 trials for izokibep in psoriatic arthritis and hidradenitis suppurativa neared completion.

Acelyrin's research and development expenses for the third quarter of 2024 were $31.6 million, down from $74.6 million in the same period of 2023. This reduction was due to the company's strategic decision to suspend new internal investment in the development of izokibep for certain indications and focus its resources primarily on the advancement of lonigutamab in TED.

General and administrative expenses for the third quarter of 2024 were $12.3 million, compared to $19.9 million in the same period of 2023. The decrease was primarily attributable to lower stock-based compensation expense.

In August 2024, Acelyrin announced a restructuring plan to suspend new internal investment in the development of izokibep for hidradenitis suppurativa, psoriatic arthritis, and axial spondyloarthritis. This strategic decision allowed the company to realign its workforce and resources to prioritize the development of lonigutamab for TED. As part of this restructuring, Acelyrin incurred $10.8 million in charges during the third quarter of 2024.

For the most recent quarter (Q3 2024), Acelyrin reported no revenue and a net loss of $48.55 million. The company has not generated any revenue from product sales to date, as it does not have any approved products on the market. The net losses have primarily resulted from costs associated with research and development programs and general administrative expenses.

In August 2024, Acelyrin guided to a 2024 year-end cash position of $420 million to $450 million. With the resolution of manufacturing commitments, the company updated its 2024 year-end cash guidance to $435 million to $450 million.

Liquidity

As of September 30, 2024, Acelyrin reported $562.9 million in cash, cash equivalents, restricted cash and short-term marketable securities. This strong liquidity position is projected to provide a cash runway to mid-2027, well beyond the expected completion of the planned phase 3 trials and BLA-enabling activities for lonigutamab.

The company's debt-to-equity ratio as of December 31, 2023, was 0.012, with $1.19 million in total debt and $656.34 million in stockholders' equity. Acelyrin's current ratio and quick ratio are both 7.147, indicating a strong ability to meet short-term obligations.

Product Pipeline and Development Strategy

Acelyrin's product pipeline is primarily focused on two key programs:

1. Lonigutamab Program: This is Acelyrin's lead product candidate, an anti-IGF-1R inhibitor currently in Phase 2 clinical development for the treatment of thyroid eye disease (TED). In March 2024, the company announced promising interim data from an ongoing Phase 1/2 dose ranging trial. In the first dosing cohort, 50% of patients receiving a 40mg dose of lonigutamab achieved a 2mm reduction in proptosis from baseline, compared to 0% in the placebo group. In the second dosing cohort, 67% of patients receiving a 50mg loading dose followed by 25mg weekly achieved the 2mm proptosis reduction. Based on these positive results, Acelyrin plans to move directly into a Phase 3 program for lonigutamab in TED, expected to initiate in the first quarter of 2025.

2. Izokibep Program: Acelyrin is developing izokibep, an IL-17A inhibitor, with an ongoing Phase 2b/3 clinical trial in uveitis. Top-line data from this trial is expected by the end of 2024. In August 2024, as part of a strategic restructuring, Acelyrin decided to suspend new internal investment in the development of izokibep for other indications, including hidradenitis suppurativa, psoriatic arthritis, and axial spondyloarthritis.

The company has also decided to suspend further development of SLRN-517.00, an unmodified IgG1 monoclonal antibody in preclinical development, which was acquired through the ValenzaBio acquisition in January 2023.

Risks and Challenges

Acelyrin, like any biotechnology company, faces several risks and challenges that could impact its future performance. These include the inherent risks associated with the development and commercialization of novel therapeutic candidates, the potential for unfavorable clinical trial results, regulatory approval hurdles, and intense competition in the immune-mediated disease space.

Additionally, the company's reliance on third-party manufacturers and suppliers introduces supply chain risks, which could disrupt its clinical and commercial activities. Acelyrin also faces the challenge of effectively managing its growth and expansion, as well as retaining key personnel to execute its strategic vision.

Outlook and Conclusion

Acelyrin's strategic refocus on the development of lonigutamab for TED, combined with its strong financial position, positions the company well to capitalize on the significant unmet need in this disease area. The positive proof-of-concept data and successful end-of-phase 2 meeting with the FDA suggest that lonigutamab has the potential to offer a differentiated treatment option for TED patients.

As Acelyrin prepares to initiate its phase 3 program for lonigutamab in the first quarter of 2025, the company will also be eagerly awaiting the topline results from its phase 2b/3 trial of izokibep in uveitis, expected in December 2024. If the uveitis data is positive, Acelyrin estimates that one additional Phase 3 trial of approximately 200 to 250 patients will be required for registration.

With a solid cash position of $562.4 million as of September 30, 2024, and an updated 2024 year-end cash guidance of $435 million to $450 million, Acelyrin is well-positioned to fund its operations and clinical development programs through at least mid-2027. This financial stability, coupled with Acelyrin's disciplined capital allocation and focus on high-quality execution, makes the company an intriguing player in the immune-mediated disease landscape.