ALX Oncology Holdings Inc. (NASDAQ:ALXO) is a clinical-stage immuno-oncology company focused on developing therapies that block the CD47 immune checkpoint and bridge the innate and adaptive immune system. The company's lead product candidate, evorpacept, is currently in multiple Phase 1 and 2 clinical trials, showcasing its potential to transform the treatment landscape for various cancer indications.
Business Overview
ALX Oncology was founded in 2015 with the goal of advancing novel immuno-oncology therapies. The company's lead product candidate, evorpacept, is a next-generation CD47 blocker designed to have a high affinity for CD47 and avoid the limitations caused by hematologic toxicities inherent in other CD47 blocking approaches. Evorpacept is a fusion protein that combines a high-affinity CD47 binding domain with a proprietary inactivated Fc domain, which the company believes improves tolerability when compared to other CD47 blocking approaches.
Evorpacept is being evaluated in a diverse pipeline of clinical trials, including studies in head and neck squamous cell carcinoma (HNSCC), gastric/gastroesophageal junction (GEJ) carcinoma, urothelial cancer, breast cancer, non-Hodgkin lymphoma (NHL), and multiple myeloma. The company's strategy is to develop evorpacept in combination with other anti-cancer agents, leveraging its potential to enhance the activity of targeted antibodies and checkpoint inhibitors.
Financials
For the fiscal year ended December 31, 2023, ALX Oncology reported an annual net loss of $160,805,000, with no revenue generated. The company's annual operating cash flow was -$130,364,000, and its annual free cash flow was -$131,638,000. These financial results reflect the company's ongoing investment in the development of its pipeline, particularly the advancement of evorpacept through multiple clinical trials.
In the first quarter of 2024, the company reported a net loss of $35,581,000. Research and development expenses increased by $6,954,000, or 28%, compared to the same period in 2023, primarily due to increased clinical and development costs, personnel and related costs, and stock-based compensation expense. General and administrative expenses decreased by $1,395,000, or 19%, during the same period, driven by a decrease in stock-based compensation expense.
As of March 31, 2024, ALX Oncology had $184,437,000 in cash, cash equivalents, and investments, providing the company with a strong financial position to continue advancing its pipeline.
Clinical Pipeline and Collaborations
Evorpacept Combination with Anti-Cancer Antibody
The company's most advanced program is the ASPEN-06 trial, a randomized Phase 2/3 study evaluating evorpacept in combination with trastuzumab, ramucirumab, and paclitaxel for the treatment of second- and third-line advanced HER2-overexpressing gastric/GEJ cancer. In October 2023, the company announced positive prespecified interim Phase 2 data from this trial, reporting a confirmed overall response rate (ORR) of 52% for the evorpacept combination, compared to 22% for the control group. The median duration of response was not reached for the evorpacept combination, compared to 7.4 months for the control group.
The company also has ongoing Phase 1 trials evaluating evorpacept in combination with an antibody-drug conjugate (ADC), enfortumab vedotin-ejfv, for the treatment of urothelial cancer (ASPEN-07), and in combination with the ADC fam-trastuzumab deruxtecan-nxki for the treatment of unresectable or metastatic HER2-positive and HER2-low breast cancer (I-SPY trial).
Evorpacept Combination with PD-1/PD-L1 Immune Checkpoint Inhibitor
ALX Oncology is also evaluating evorpacept in combination with the PD-1 inhibitor pembrolizumab in two randomized Phase 2 trials: ASPEN-03 for the treatment of first-line advanced PD-L1 positive HNSCC, and ASPEN-04 for the treatment of first-line advanced HNSCC in combination with pembrolizumab, platinum, and fluorouracil.
Collaborations and Investigator-Sponsored Trials
The company has established several collaborations and investigator-sponsored trials to further explore the potential of evorpacept in combination with other therapies. These include a collaboration with Jazz Pharmaceuticals to evaluate evorpacept in combination with zanidatamab for the treatment of advanced HER2-expressing breast cancer and other solid tumors, and a collaboration with Quantum Leap Healthcare Collaborative to evaluate evorpacept in combination with fam-trastuzumab deruxtecan-nxki for the treatment of unresectable or metastatic HER2-positive and HER2-low breast cancer.
Additionally, the company has an ongoing investigator-sponsored trial at MD Anderson Cancer Center evaluating evorpacept in combination with rituximab and lenalidomide for the treatment of patients with relapsed/refractory B-cell NHL, and a collaboration with Sanofi to evaluate evorpacept in combination with isatuximab and dexamethasone for the treatment of patients with relapsed or refractory multiple myeloma.
Early Pipeline Programs
Beyond evorpacept, ALX Oncology is also advancing its early pipeline, including ALTA-002, a collaboration with Tallac Therapeutics that combines the company's SIRPα antibody with Tallac's toll-like receptor 9 agonist, and an ADC program based on the company's acquisition of ScalmiBio, Inc. in 2021.
Regulatory Milestones
The company has received several regulatory designations for evorpacept, including Fast Track designations from the FDA for its use in combination with trastuzumab, ramucirumab, and paclitaxel for the treatment of HER2-overexpressing advanced gastric/GEJ cancer, and in combination with pembrolizumab, platinum, and fluorouracil for the first-line treatment of HNSCC. Additionally, the FDA and the European Commission have granted Orphan Drug Designation to evorpacept for the treatment of gastric/GEJ cancer.
Competitive Landscape
The immuno-oncology market is highly competitive, with several companies developing therapies that target the CD47 pathway, including Adagene, Akesobio, Bio-Thera Solutions, Boehringer Ingelheim, Bristol Myers Squibb, Byondis, Centessa, Conjupro Biotherapeutics, CTTQ (SinoBiological), Daiichi Sankyo, Exelixis, GenSci, Gilead Sciences (through its acquisition of Forty Seven), Hanchor Bio, Hisun, Hutchmed, I-Mab, Ichnos, ImmuneOncia Therapeutics, ImmuneOnco Biopharma, Innovent, Kahr, LaNova, Lightchain Bioscience, Mabwell Therapeutics, Mabworks, Novimmune, OSE Immunotherapeutics, Pfizer (through its acquisition of Trillium Therapeutics), Phanes, Pyxis Oncology (through its acquisition of Apexigen), Shandong New Time, Shattuck Labs, Sorrento Therapeutics, Sumgen, SunHo Pharmaceutical, TG Therapeutics, Waterstone, and Zai Lab, among others.
Risks and Challenges
As with any clinical-stage biopharmaceutical company, ALX Oncology faces several risks and challenges, including the inherent uncertainty of drug development, the potential for adverse events or safety concerns with its product candidates, the ability to successfully navigate the regulatory approval process, and the need to secure additional funding to support its ongoing operations and pipeline development.
The company's reliance on third-party manufacturers and service providers for the production and development of its product candidates also introduces risks related to supply chain disruptions and the ability of these partners to meet the company's requirements. Additionally, the highly competitive nature of the immuno-oncology market may pose challenges in terms of market acceptance and pricing for the company's product candidates, if approved.
Outlook
ALX Oncology is a promising player in the immuno-oncology space, with its lead product candidate, evorpacept, demonstrating encouraging clinical results in various cancer indications. The company's strategy of developing evorpacept in combination with other anti-cancer agents, including targeted antibodies and checkpoint inhibitors, positions it to potentially address unmet needs in the treatment of solid tumors and hematological malignancies.
Conclusion
With a strong financial position, a diverse pipeline of clinical trials, and several regulatory designations, ALX Oncology is well-positioned to continue advancing its research and development efforts. As the company navigates the challenges inherent in the drug development process, investors will closely monitor the progress of evorpacept and the company's ability to execute on its strategic objectives.