Aileron Therapeutics, Inc. (NASDAQ:ALRN) is a clinical stage biopharmaceutical company that has recently shifted its focus to developing novel therapies for the treatment of orphan pulmonary and fibrosis indications with no approved or limited effective treatments. The company currently has two product candidates in clinical development, LTI-03 and LTI-01, and multiple candidates in preclinical development focused on fibrosis indications.
Business Overview
Aileron was previously focused on the development of its main product candidate, ALRN-6924, a MDM2/MDMX dual inhibitor that leveraged the company's proprietary peptide drug technology. However, in February 2023, Aileron announced the termination of the Phase 1b breast cancer trial for ALRN-6924 and the decision to explore strategic alternatives to maximize shareholder value.
On October 31, 2023, Aileron acquired Lung Therapeutics, Inc. ("Lung") in a transaction that shifted the company's operating disease focus to advancing a pipeline of first-in-class medicines to address significant unmet medical needs in orphan pulmonary and fibrosis indications. Under the terms of the acquisition, Aileron issued 344,345 shares of its common stock and 19,903 shares of its newly designated Series X Preferred Stock to the stockholders of Lung.
Aileron's lead product candidate, LTI-03, is being developed for the treatment of Idiopathic Pulmonary Fibrosis (IPF) and has completed a healthy volunteer Phase 1a clinical trial. LTI-03 is currently in a Phase 1b clinical trial in IPF patients. The company's second product candidate, LTI-01, is in development for loculated pleural effusion (LPE) and has completed Phase 1b and Phase 2a clinical trials in LPE patients.
Financials
For the fiscal year ended December 31, 2023, Aileron reported annual net income of -$15,732,000, annual revenue of $0, annual operating cash flow of -$19,808,000, and annual free cash flow of -$19,808,000.
In the first quarter of 2024, Aileron reported a net loss of $7,113,000, with no revenue generated. Research and development expenses for the quarter were $3,463,000, while general and administrative expenses were $3,742,000. The company's cash and cash equivalents stood at $12,042,000 as of March 31, 2024.
Liquidity
As of March 31, 2024, Aileron had cash and cash equivalents of $12,042,000. On May 1, 2024, the company announced that it had entered into an underwriting agreement to sell 4,273,505 shares of common stock and accompanying warrants for net proceeds of approximately $17.9 million. Aileron expects to use the net proceeds from the offering, together with its existing cash and cash equivalents, to fund the development and commercialization of its product candidates, including the ongoing Phase 1b clinical trial of LTI-03, as well as for working capital and other general corporate purposes.
Management believes that the company's current cash and cash equivalents, combined with the net proceeds from the recent offering, will be sufficient to fund its operations into the second half of 2025. However, the company may need to raise additional capital in the future to support its continued research and development activities and general operations.
LTI-03 Clinical Development
In May 2024, Aileron announced positive data from Cohort 1 of the ongoing Phase 1b clinical trial evaluating the safety and tolerability of inhaled LTI-03 in patients diagnosed with IPF. The Phase 1b trial is a randomized, double-blind, placebo-controlled study being conducted at 11 centers in the United States, the United Kingdom, Belgium, Germany, and Australia.
In Cohort 1, patients in the active arm inhaled a single 2.5 mg capsule of LTI-03 twice daily. Of the 12 patients enrolled in Cohort 1, three were randomized to the placebo arm and nine to the active arm. The trial is evaluating various biomarkers relating to epithelial damage, fibrosis, and inflammation in blood cells.
The key findings from Cohort 1 include: - LTI-03 reduced expression of multiple profibrotic proteins, with statistically significant decreases observed in three biomarkers - galectin-7 (p=0.0014), thymic stromal lymphopoietin (p=0.0223), and collagen 1 alpha chain (p=0.0489). - LTI-03 stimulated production of soluble receptor for advanced glycation end-products (solRAGE), a factor indicative of type I epithelial cell health. - LTI-03 did not induce inflammation in peripheral blood mononuclear cells. - LTI-03 was generally well-tolerated with no serious adverse events reported.
Aileron plans to report topline results from the high-dose Cohort 2 of the Phase 1b trial in the third quarter of 2024.
LTI-01 Clinical Development
Aileron's second product candidate, LTI-01, is in development for the treatment of loculated pleural effusion (LPE), an indication that currently has no approved drug treatment. LTI-01 has completed Phase 1b and Phase 2a clinical trials in LPE patients.
Preclinical Programs
In addition to its two clinical-stage product candidates, Aileron has multiple preclinical programs targeting cystic fibrosis and a peptide program focused on the Cav1 protein for systemic fibrosis indications.
Risks and Challenges
Aileron faces several risks and challenges in the development and commercialization of its product candidates, including: - The unproven nature of the company's approach to drug research and development in the area of fibrotic diseases, with a focus on Caveolin-1 (Cav1)-related peptides. - The possibility of adverse results in the company's ongoing and future clinical trials for LTI-03 and LTI-01. - The need for substantial additional financing to fund the company's operations and development activities. - Reliance on third-party manufacturers and suppliers for the production of its product candidates. - Potential difficulties in maintaining its intellectual property position and enforcing its rights. - Competition from other companies developing therapies for the same or similar indications.
Conclusion
Aileron Therapeutics has undergone a significant shift in its business focus following the acquisition of Lung Therapeutics. The company is now dedicated to advancing a pipeline of novel therapies for the treatment of orphan pulmonary and fibrosis indications, with a particular emphasis on its lead candidates, LTI-03 and LTI-01. While the company faces several risks and challenges, the positive data from the Cohort 1 of the Phase 1b trial for LTI-03 and the company's recent financing provide a promising outlook for Aileron's future development efforts in these important therapeutic areas.