Aileron Therapeutics Reports Second Quarter 2024 Financial Results and Business Highlights

Rhea-AI Summary

Aileron Therapeutics (NASDAQ: ALRN) reported Q2 2024 financial results and business highlights. Key points include:

1. Positive data from Cohort 1 of Phase 1b trial for LTI-03 in idiopathic pulmonary fibrosis (IPF), with positive trends in 7 of 8 biomarkers.

2. Completed a $18.2 million registered direct offering in May 2024.

3. Q2 2024 R&D expenses increased to $3.7 million from $0.2 million in Q2 2023.

4. G&A expenses rose to $5.3 million from $1.9 million year-over-year.

5. Net loss for Q2 2024 was $8.9 million ($0.45 per share).

6. Cash position as of June 30, 2024: $21.9 million, expected to fund operations into H2 2025.

7. Topline results from Cohort 2 (high-dose LTI-03) expected in Q3 2024.

Positive

• Positive data from Cohort 1 of Phase 1b trial for LTI-03 in IPF, with positive trends in 7 of 8 biomarkers
• Completed $18.2 million registered direct offering, strengthening the balance sheet
• Cash position of $21.9 million as of June 30, 2024, expected to fund operations into H2 2025
• Potential for additional $20 million from warrant exercises

Negative

• Increased R&D expenses to $3.7 million in Q2 2024 from $0.2 million in Q2 2023
• Increased G&A expenses to $5.3 million in Q2 2024 from $1.9 million in Q2 2023
• Net loss widened to $8.9 million in Q2 2024 from $1.8 million in Q2 2023

Insights

Financial Analyst

Aileron's Q2 2024 results reveal mixed financial performance. While R&D expenses increased significantly to $3.7 million from $0.2 million year-over-year, this reflects investment in acquired clinical programs. The $18.2 million raised through a stock offering strengthens the balance sheet, extending cash runway into H2 2025. However, the widening net loss of $8.9 million vs $1.8 million last year and increased cash burn rate are concerning. The potential $20 million from warrant exercises could provide additional runway, but dilution risk exists. Investors should monitor cash burn and clinical progress closely.

Medical Research Analyst

The positive data from Cohort 1 of the Phase 1b trial for LTI-03 in IPF patients is promising. Statistically significant decreases in 3 out of 8 biomarkers suggest potential efficacy in inhibiting fibrosis and improving lung function. The stimulation of solRAGE production indicates a novel approach to addressing type I epithelial cell health, a critical aspect of IPF. However, it's important to note that this is early-stage data from a small cohort. The upcoming results from the high-dose Cohort 2 in Q3 2024 will be important in validating these findings and determining the optimal dosage for future trials.

Market Research Analyst

Aileron's focus on orphan pulmonary and fibrosis indications positions it in a niche market with significant unmet needs. The positive early-stage results for LTI-03 in IPF could potentially disrupt the $3.6 billion global IPF market, which is projected to reach $5.9 billion by 2027. However, competition from established players like Roche and Boehringer Ingelheim is fierce. The development of LTI-01 for loculated pleural effusion also addresses an underserved market. Investors should watch for partnerships or licensing deals that could validate Aileron's pipeline and provide additional funding for late-stage trials.

Announced positive data from Cohort 1 of the ongoing Phase 1b clinical trial of LTI-03 evaluating low dose LTI-03 (2.5 mg BID) in idiopathic pulmonary fibrosis ("IPF") patients, with positive trends observed in seven of the eight biomarkers evaluated

Topline results from Cohort 2 evaluating high-dose LTI-03 (5 mg BID) expected in the third quarter of 2024

AUSTIN, Texas, Aug. 14, 2024 /PRNewswire/ -- Aileron Therapeutics, Inc. ("Aileron" or the "Company") (NASDAQ: ALRN), a biopharmaceutical company advancing a pipeline of potential first-in-class medicines to address significant unmet medical needs in orphan pulmonary and fibrosis indications, today reported financial results for the second quarter ended June 30, 2024, and provided a business update.

"Throughout the first half of the year, we focused on strengthening our balance sheet and advancing the development of inhaled LTI-03 in IPF," said Brian Windsor, Ph.D., President and Chief Executive Officer of Aileron. "We are extremely pleased with the positive data from Cohort 1 of the ongoing Phase 1b clinical trial announced in May, particularly the achievement of statistical significance in three out of eight biomarkers which is a testament to the potential of LTI-03 to inhibit fibrosis and improve lung function. Additionally, in May, we raised approximately $18.2 million in net proceeds in an underwritten registered direct offering, which provides us with the resources to further validate LTI-03 in the ongoing Phase 1b trial. We look forward to reporting topline results from the high-dose cohort in the third quarter of this year."

Second Quarter 2024 Highlights and Recent Updates

Corporate Updates

• In May 2024, the Company completed an underwritten registered direct offering of 4,273,505 shares of its common stock and accompanying warrants to purchase an aggregate of 4,273,505 shares of its common stock. Net proceeds from the offering were approximately $18.2 million, after deducting underwriting discounts and commissions and other offering expenses. The Company has the potential to receive approximately $20.0 million in additional proceeds from the exercise of the warrants issued in the offering.

Pipeline

• Announced positive Cohort 1 data from the ongoing Phase 1b clinical trial evaluating the safety and tolerability of inhaled LTI-03 in patients diagnosed with IPF.
  
  
  • Following inhaled administration of low dose LTI-03 (2.5 mg BID, or twice daily) in twelve patients, a positive trend was observed in seven out of eight biomarkers. The findings included:
    • Evidence of LTI-03 reducing expression of multiple profibrotic proteins produced in both basal-like cells and fibroblasts that contribute to the progression of IPF, with statistically significant decreases in three biomarkers, reinforcing the potential of LTI-03 to inhibit fibrosis, inflammation and associated changes in the lungs.
    • LTI-03 stimulated production of solRAGE, a factor indicative of type I epithelial cell health, a critically important aspect of IPF that has gone largely unaddressed.
    • LTI-03 was generally well-tolerated with no serious adverse events ("SAEs") reported.
  • The Phase 1b trial is ongoing, with topline results from the high-dose Cohort 2 expected in the third quarter of 2024.
    
    
• On May 1, 2024, the Company hosted a pulmonary care expert call to discuss the Cohort 1 Phase 1b results of LTI-03, featuring pulmonary care expert Andreas Günther, M.D., Head of the Center for Interstitial and Rare Lung Diseases at the Justus Liebig University in Giessen, Germany. A replay of the event can be accessed at https://investors.aileronrx.com/events-presentations/investor-events.
  
  
• LTI-01 is in development for loculated pleural effusion ("LPE"), a serious consequence of pneumonia with significant unmet medical need.

Second Quarter 2024 Financial Results 

• Cash Position: Cash and cash equivalents as of June 30, 2024, were $21.9 million, compared to $12.0 million as of March 31, 2024. After including the net proceeds raised from the May 2024 offering and based on its current operating plan, the Company expects its existing cash and cash equivalents to be sufficient to fund the completion of the Phase 1b clinical trial and its operations into the second half of 2025.
  
  
• Research and Development ("R&D") Expenses: R&D expenses for the quarter ended June 30, 2024, were $3.7 million, compared to $0.2 million for the quarter ended June 30, 2023. The increase of $3.5 million was primarily a result of the clinical programs acquired as part of the Company's acquisition of Lung Therapeutics, Inc. in October 2023 (the "Lung Acquisition"). During the quarter ended June 30, 2024, Aileron incurred expenses of $1.1 million on clinical trials, $2.0 million on manufacturing, and $0.1 million on regulatory and development consulting as well as $0.5 million on employee and related expenses associated with clinical programs acquired in the Lung Acquisition.
  
  
• General and Administrative ("G&A") Expenses: G&A expenses for the quarter ended June 30, 2024, were $5.3 million, compared to $1.9 million for the quarter ended June 30, 2023. The increase of $3.4 million was primarily due to increased professional fees of $1.0 million and increased employee and related expenses of $1.8 million as a result of increased business activity and headcount associated with the Lung Acquisition, and increased facilities and other expenses of $0.5 million during the quarter ended June 30, 2024 as compared to the quarter ended June 30, 2023.
  
  
• Net Loss: Net loss for the quarter ended June 30, 2024, was $8.9 million, compared to $1.8 million for the quarter ended June 30, 2023. The basic and diluted net loss per share for the quarter ended June 30, 2024 was $0.45 compared to $0.39 for the quarter ended June 30, 2023.

About Aileron Therapeutics

Aileron Therapeutics, Inc. is a biopharmaceutical company advancing a novel pipeline of first-in-class medicines to address significant unmet medical needs in orphan pulmonary and fibrosis indications. Aileron's lead product candidate, LTI-03, is a novel, synthetic peptide with a dual mechanism targeting alveolar epithelial cell survival as well as inhibition of profibrotic signaling. Currently, LTI-03 is being evaluated in a Phase 1b clinical trial for the treatment of idiopathic pulmonary fibrosis. Aileron's second product candidate, LTI-01, is a proenzyme that has completed Phase 1b and Phase 2a clinical trials for the treatment of loculated pleural effusions. LTI-01 has received Orphan Drug Designation in the US and EU and Fast Track Designation in the US.

Forward-Looking Statements

This press release may contain forward-looking statements of Aileron within the meaning of the Private Securities Litigation Reform Act of 1995, including statements with respect to: the timing and expectation of the topline results from Cohort 2 of the Phase 1b study of LTI-03; the sufficiency of the Company's cash resources; the projected cash runway of the Company; the status and plans for clinical trials, including the timing of data; future product development; and the potential commercial opportunity of LTI-03 and LTI-01. We use words such as "anticipate," "believe," "estimate," "expect," "hope," "intend," "may," "plan," "predict," "project," "target," "potential," "would," "can," "could," "should," "continue," and other words and terms of similar meaning to help identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including risks and uncertainties related to: changes in applicable laws or regulations; the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors, including risks inherent in pharmaceutical research and development, such as: adverse results in the Company's drug discovery; preclinical and clinical development activities; the risk that the results of preclinical studies and early clinical trials may not be replicated in later clinical trials or that partial results of a trial such as the results from Cohort 1 of the Company's ongoing Phase 1b clinical trial of LTI -03 may not be indicative of the full results of the trial; the Company's ability to enroll patients in its clinical trials; and the risk that any of its clinical trials may not commence, continue or be completed on time, or at all; decisions made by the U.S. Food and Drug Administration and other regulatory authorities; investigational review boards at clinical trial sites and publication review bodies with respect to the Company's development candidates; competition; the sufficiency of the Company's cash resources to fund its planned activities for the periods anticipated and the Company's ability to manage unplanned cash requirements; and general economic and market conditions; as well as the risks and uncertainties discussed in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, which are on file with the United States Securities and Exchange Commission (the "SEC") and in subsequent filings that the Company files with the SEC. These forward-looking statements should not be relied upon as representing the Company's view as of any date subsequent to the date of this press release, and we expressly disclaim any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Investor Relations & Media Contact:

Argot Partners
aileron@argotpartners.com
212-600-1902

 

Aileron Therapeutics, Inc.
Balance Sheet Data
(Unaudited)
(In thousands)
	June 30, 2024		December 31, 2023
Cash and cash equivalents	$      21,917		$         17,313
Working capital	18,222		13,881
Total assets	109,400		106,008
Accumulated deficit	(304,572)		(288,517)
Total stockholders' equity	$      56,016		$           6,887

 

Aileron Therapeutics, Inc.
Condensed Consolidated Statement of Operations
(Unaudited)
(In thousands, except share and per share data)
	Three Months Ended June 30,
	2024		2023
Revenue	$                -		$                -
Operating expenses:
Research and development	3,741		187
General and administrative	5,298		1,893
Restructuring and other costs	-		(88)
Total operating expenses	9,039		1,992
Loss from operations	(9,039)		(1,992)
Other income (expense), net	97		205
Net loss	(8,942)		(1,787)
Net loss per share — basic and diluted	$          (0.45)		$          (0.39)
Weighted average common shares outstanding—basic and diluted	19,911,462		4,541,167

 

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SOURCE Aileron Therapeutics, Inc.

FAQ

What were Aileron Therapeutics' (ALRN) Q2 2024 financial results?

Aileron Therapeutics reported a net loss of $8.9 million ($0.45 per share) for Q2 2024, with R&D expenses of $3.7 million and G&A expenses of $5.3 million. The company had a cash position of $21.9 million as of June 30, 2024.

What were the key findings from Aileron Therapeutics' (ALRN) Phase 1b trial of LTI-03 for IPF?

Aileron reported positive data from Cohort 1, with positive trends observed in 7 of 8 biomarkers evaluated. The low-dose LTI-03 (2.5 mg BID) showed statistically significant decreases in three biomarkers and was generally well-tolerated with no serious adverse events.

When does Aileron Therapeutics (ALRN) expect to report topline results from Cohort 2 of the LTI-03 trial?

Aileron Therapeutics expects to report topline results from Cohort 2, evaluating high-dose LTI-03 (5 mg BID), in the third quarter of 2024.

How much did Aileron Therapeutics (ALRN) raise in its May 2024 offering?

Aileron Therapeutics raised approximately $18.2 million in net proceeds from an underwritten registered direct offering completed in May 2024.