First AI Antibody In Humans with Aulos' Aron Knickerbocker

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I see you out there in the Reddit forums and on Twitter or X or whatever they're calling this platform that brings out the worst in humanity these days . Ai and drug discovery and design it's all hype . You say it's all smoke and mirrors . I'm Matt Pillar . This is the Business of Biotech , and my guest on today's show begs to differ .

He's not a Silicon Valley meets Cambridge upstart either . He's a veteran of big bio , a biotech entrepreneur who's demonstrated some pretty nice exits , and a guy whose company has what it alleges to be the first AI-designed antibody in the clinic and in humans . His name is Aron Knickerbocker .

He's president and CEO at Aulos Bioscience , and on today's show we're going to get to know where he came from , what makes him tick , and we're going to learn about how Aulos is leveraging its unique and tech-centric approach to drug design in what's become a very competitive IL-2 space that's dominated by the big dogs in biopharma . Aron , welcome to the show .

Now you're probably a little bit tired from a very successful and busy ASCO meeting , which we'll talk about a little bit later on . But , like I said , I want to start by sort of getting to know you a bit and what makes you tick and what inspires you and what inspired you back in the day to get into science in the first place .

And I remember this segment on the CBS Evening News that I saw with Dan Rather so that tells you how old I am but it was a piece on the emerging science of biotechnology and the ability to make these recombinant proteins in the lab that then could be used for therapeutic or other purposes , and I just thought that sounded amazing and so cool .

So I thought I wanted to do that . But then my practical side compelled me to apply instead to engineering school . When I applied to college , so I actually enrolled as a chemical engineering major , which is a great discipline , but I lasted about a semester in that I realized that's not where my heart was .

I really wanted to study biology and so I switched majors and moved into the molecular biology track , and at that time I was going to a school that was full of pre-meds , so most of my classmates who were in the biology program wanted to be doctors , and I was a bit of an oddball in that that was not the route I was initially headed .

I was planning to get a PhD and become a research scientist . That was my goal . So I worked in a lab all through college and when I graduated I decided to take a little time off to work or pay in a lab and also to repay some student loans . And you know see how I like the business of doing science on a day-to-day basis .

So initially I worked in a research lab doing malaria research in St Louis at Washington University and then from there I went to Bristol-Myers Squibb to their site in Princeton , new Jersey , doing drug discovery and cardiovascular disease , and I really enjoyed those experiences , spent almost four years in the labs post-undergraduate and over the course of that timeframe I

realized I wanted to learn more about the business of life science , pharmaceuticals and , hopefully , biotechnology . So I changed tracks . I decided I would not get the PhD but I would go to business school instead , because I knew nothing about it at the time and realized that .

So I went to pursue an MBA and get a general management degree and that's been a good pairing because I still love the science . I work with scientists all the time but I'm not the expert anymore . But I bring that sort of hybrid background between the business and the science and that intersection . I think that's been helpful for my career .

It's like well , I realized within you know , 12 to 18 months the lab was not for me . It just , you know , wasn't my personality , it was lonely , boring , whatever , whatever you know , whatever you want to call it .

That's what makes me admire scientists so much is that it does demand patience and tenacity and creativity , I think . But yeah , like I said I I wanted to learn more about how the whole business of life sciences worked , and that was my motivation .

There are often comments on that subreddit about how this should be qualified as the biotech HR subreddit , because so much of the activity on that subreddit is , um , you know people who are in a similar situation to you , who want or desire , uh , have aspirations to move to the business side , um , of of biotech .

Uh , you did that by , you know , I guess step one was saying , hey , I gotta go , go get an MBA and learn the business , the business side , uh . But I'm curious , like , just to those people , what advice would you would you give them , having done it and done it quite successfully , what ? What advice would you give that ?

You know that , that research scientist who there's a lot of aspiration out there , by the way , there's probably not enough room for all of them , but what advice would you give them ?

You gonna have the most energy , the most inquiry and you'll learn the most , I think , in in that area . So sometimes people think they want to switch tracks just to to get a new job , and that's fine . But ask yourself does that job use what intrinsically motivates you ? And if so , then that's probably a match .

Look for that Venn diagram of yourself versus what the opportunity is offering . That's kind of what I've done over the years and that's been very helpful . And also try to imagine the ideal career arc that you might have . If you could picture it as of today . What would it look like in a few years ?

Because that often informs the steps that are needed to reach that . Not necessarily a specific title , but just the type of work that you would be doing in a few years . What are you aiming for ? What kind of difference do you want to make ?

So I think these are helpful sort of guideposts to frame the decision , and I don't think everybody should go to business school or get a PhD or go to med school .

, to make that transition ? Because that's another , I mean , that's another very important element to the conversation . I mean not to stereotype , but if you're a good bench scientist , you're not inherently a good people personickerbocker's brain or , or change or modify to to successfully go down that route .

amazing thing , I think . To be a successful business person , you have to think very broadly , because you have to understand how the elements that construct that business actually function and be conversant and be able to make decisions across a range of areas that may not be in your core area of expertise but that you have to do as an executive .

And so that was something that was very different to me , but I liked it a lot because I think I tend to be sort of broadly oriented . But it took me a little while to get that confidence . I remember first year in business school we had a team project and it was some marketing project with some analytics around it and uh , you know I ?

I thought I knew a way to address the problem , but I didn't . I didn't have the confidence because I thought , oh , I'm a biology guy Historically , this is not my expertise . These guys have worked in accounting and finance and marketing before this , so they probably know it better than I do .

Uh , turns out I was onto something and I didn't say it and I should have .

So that that was a lesson learned , that it doesn't matter what your background is If you've got the insight and the ability to to sort of dig into a problem , dissect it and and solve , do it and bring that to the discussion , and I sort of encourage that among my peers and colleagues now that I don't .

It doesn't matter to me what function you hold or what title you hold . If you have a view or a suggestion , please bring it forward . You know , I think the organization benefits from that , that breadth . So that , coming back to the question that was the the notably different aspect of pursuing the graduate degree in business versus a science degree .

Was it intentional or , in retrospect , beneficial to stay in big pharma and work for those large companies on the business side leading up to your foray into biotech , like true biotech entrepreneurship with startup companies ?

And then if you look at my career , they basically tapered in size , at least by staff , over time , and there's some method to that madness . So when I took the job out of business school at Amgen , it was a brand new sales and marketing commercial rotational program .

They started for MBA recruits and I was one of the first two hires into that program and I really liked what was being proposed there because it was again this idea of breadth . So because it was a rotation program , they would have people do various functions sales . So that's what I did at first .

I was out in the field selling a product for cancer , a supportive care product called Nupagen , which keeps the white blood cell count high after chemotherapy and helps prevent infections . So I like that as sort of the diversity of experience . So I did sales and they had me do market research again in oncology .

So I've been in the oncology space a long time and then brand management . Some of the early direct patient work was stuff I worked on at Amgen , as well as a pipeline product that was in development at that time , and over the course of that I supported analyses for licensing and M&A transactions that Amtron was looking at .

So that's how I got to know the corporate development and licensing teams and I think they liked my work and found me collaborative . And when an opening came up in corporate development , I jumped at that chance because I really liked the idea of building a business and that's still what I do .

But by doing that through deal making and looking externally , having a broad mind and seeing if there's a way to broaden the pipeline and add to the value of the business by alliances that bring assets in either through M& or licensing . So that was how I made that transition at Amgen .

Uh , started , so you're , you're , at five prime for for a decade .

You started there as VP of business development and ended up , uh , the president and CEO of the company , right , um , that led , as I said , up to five primes , acquisition by Amgen , which you know , I'm I'm sure some of the networking you did when you weren't this big bio was uh , paid off .

Uh , after that , you founded , raised bio , which was acquired by BMS pretty , pretty quickly there . Thereafter , um , what inspired well , I I'd love to hear some detail on , you know , the work you put into those acquisitions .

But before that point , what inspired the move to 5 Prime and Raise the move to that , I guess , sector of biotech versus staying where you were and climbing the corporate ladder at larger organizations ?

We had this whole oncology roadmap of mechanisms and pathways and specific targets we wanted to hit , and if we didn't have something internally , we would look externally and we would go get those and find the best ones that we could , and so it was a very systematic , methodical approach to build out the pipeline and I think it's still paying dividends today for

genentech and arosh .

So while I was there , I worked on a lot of deals and my team and I closed some important transactions , bringing in ben kleksta , for instance , bcl2 antagonists from what was then abbott , now at b , of course , but they were not an oncology player at that time and we're actually considering just canceling their oncology programs , as I understand it .

But I I'd worked on a prior deal with abbott whereby they took a license to some intellectual property pertaining to the co -expression of antibody chains in a system to produce antibodies , so they needed a license for that from Genentech , and so I had negotiated that licensing deal , which pertained to Humira among other things , and so I knew it was a royalty

burden on Humira and directly impacting their profitability operating margins . So I had this idea because BCL2 was on that roadmap that we had developed at Genentech and we wanted to hit it and it was a very difficult target to drug at that time with available technology and we'd seen this program at Abbott .

Actually , I was walking through the poster session of the conference with one of our protein chemists and he and I went specifically to check out their poster , which was then preclinical stage , and they had used this high throughput NMR based screening technology to to find agents that would dock in the shallow pocket of BCL2 , which is important in a number of

cancer types , particularly hematologic malignancies , which is important in a number of cancer types , particularly hematologic malignancies . And he was impressed with the quality of the work and what they'd achieved and the molecules that they created from that effort which were still not in the clinic .

And I said I think I can get this for us and he said why would they give it up ? I said , well , I've got an angle , so that was the genesis to approach Abbott with this idea of what if we give you some royalty relief on Humira and in exchange you partner with us on BCL2 .

So very sort of constructive offer , because it would immediately help their profitability , which was important to them , on what would become a huge brand . And we knew even then Humira had enormous commercial potential because of its applicability to a wide range of autoimmune disease states .

So they quickly responded that that was of interest and they'd not been thinking about that and were trying to find a partner for this program . So that kicked us to the top . So that was one of the things I did at NENTEC . Proud of that , now it's the drug Benclexta which is used for , again , several hemologic malignancies .

I also did deals to bring in a MEK inhibitor called Cotelic , a hedgehog antagonist called AeroVeg and lots of antibody , drug conjugate and antibody and small molecule programs . So to get back to your question , why would I leave that ?

So seeing them in action was really helpful and , I think , made an impression on me about a quality way to run an organization and to make decisions and to execute on a strategic plan . So I have only good , good memories and good things to say about that . It wasn't that I was looking to leave because I was unhappy .

To the contrary , I was quite happy and had done a lot of really interesting things there and had a fantastic team and opportunity still . But in 2009 , the acquisition of Genentech by Roche closed and I stayed for about six months after that .

But I was at a point in my career where I thought I can take a little more risk and I really wanted to build a company or help build a company and grow a company and ideally be involved in taking it public or some sort of liquidity event , just to learn how that process works .

And because I had this sort of business development acumen , I decided to set up a screen for the type of company that I would want to go to if I were to leave Genentech which you know I wasn't dying to do . But if I found the right thing that would offer those opportunities then I would do it .

And so my screen at the time was essentially doesn't have a scientific platform that's differentiated and may lead to better medicines . That's differentiated and may lead to better medicines , preferably with an emphasis on biologics and antibodies , because I like the profile of those agents for their selectivity and tolerability and ability to manufacture , et cetera .

Ideally in the Bay area , because my family was there and led by and staffed by really good people .

And when I applied that lens there weren't many companies that popped up , but one was Five Prime Therapeutics and Five Prime , I knew , was looking or didn't have a head of business development at the time , because I knew the former VP of business development and she'd left several months prior .

So I just cold called Five Prime and I emailed the the chairman and the CEO . So I reached out to Rusty Williams and Julia Gregory and made this pitch that I knew they didn't have a head of business development and I would be interested in talking with them if they would like to talk with me , and indeed they did .

So that led to an interview and I hit it off with the team there and Rusty was the founder just a brilliant , energetic guy who had this concept to create this screening platform using expressed proteins and functional versions of expressed proteins that could then be screened in various assays , either in vitro or in animal models of disease , et cetera , and it was

yielding some very interesting targets in therapeutic candidates . But this is 2009, . So not a good time in the economy , certainly not a good time to go to small cap or privately held biotech . Financing market was in shambles for them because of the the aftermath of the housing crisis and the economic downturn of 2008 and 09 .

So I took a big risk in going there to a company that had maybe a year of cash and was privately held , and so you know there's no guarantee that more money was coming in the door unless we did things , and so I had a very clear mandate to do deals to finance the company , which is a lot of pressure , but a lot of focus as well .

So you know , I think I responded to that and we did a number of deals that brought in capital for research funding gave us potential to participate downstream and in any products that advance for the clinic into commercialization , and several of these were done over the years , leveraging the platform technology , and so that allowed us to also advance our own pipeline

, which we did at the time , and as that pipeline advanced and the market recovered , we went public in 2013 . And along the way , I was promoted to chief business officer and then ultimately chief operating . Well , first chief operating officer and then ultimately chief operating . Well , first chief operating officer and then ultimately CEO .

But we went public , which was something I wanted to do , and I was out on the roadshow with the team to do that . That was a great experience .

We raised capital to fund our clinical programs and shortly after we went public , we spotted one of our scientists spotted this antibody again at a conference to a target that we thought was very interesting called fibroblast growth factor receptor 2B , or FGFR2B , and this is something that gets upregulated in various cancer types , like gastric cancer , stomach cancer , but

also esophageal , pancreatic , other tumor types . It comes up and gets overexpressed , much like HER2 , for instance , in the breast cancer space , and so he'd seen this poster and saw that .

This small company in the Bay Area called Galaxy had created a very specific antibody to this isoform of the FGF receptor 2 , the 2B isoform that gets upregulated in those cancers and other cancers as well . So I knew we could get it and we could afford to get it . I didn't know if we would win because pharma was interested in this program as well .

But I said let's try to get this and so I approached Galaxy and they liked the team at Five Prime . They liked our development plan , they liked how seriously we were going to take this product and prioritize it within our pipeline and in the end we beat a large pharma bidder .

I think because of that demonstration of commitment they actually felt more confidence that this little team was going to advance the program than had they given it to that particular company . And that turned out to be true .

We did advance the program and when I became CEO I made it the number one priority , which was a difficult thing to do because it meant cutting back in other areas and other programs .

But it was the right thing to do because I knew even in phase one it was very active relative to what had been seen in the past in late line treatment of gastric cancer which typically doesn't respond to much of anything and it's actually the , I think , still the number three killer globally among the cancers .

This had single agent activity in late line disease , so patients who'd failed lots of other regimens . So I knew it was active in phase one and we advanced it into late stage development , based on that early signal and went into a large randomized phase three study and went into a large randomized phase three study and that was blinded .

So it was chemotherapy versus chemotherapy plus this antibody and ultimately that's what read out very positively and caused Amgen to buy the program . But along the way , you know , I was frequently asked to kill it , to stop this program . Why are we spending on this program ? Let's let's do other things . Why do we care about gastric cancer ?

And I would say , well , it's not just gastric cancer . Gastric cancer is a major worldwide problem and I was following the science and that's been something I've done , or following the data , something I've done throughout my career , and I would encourage anybody coming into the field to apply that discipline .

You know , don't be swayed by , see the pants judgment calls . Follow the information that's actually coming out of the lab or out of the clinic , ideally from patient data and use it .

So that's exactly what we did , and so I kept it alive , even though I was repeatedly encouraged to stop it , because I knew it was working , and others on my team did as well .

It's , I'm sure , going to work in other tumor types . That target gets overexpressed in several other tumor types . That was , I would say , one of the sources of objection and then just the investment that we were having to make .

But when you want to develop something and prove that it's working , you have to invest and you have to do a large enough study that will enable that proof conclusively . And so you know , I think people sometimes get fearful when they see the investment that has to be made .

But that's what we're here to do is to make good investments that hopefully generate a lot of return , both clinical and financial , for the shareholders . So clinical for the patients and the caregivers , and for the shareholders . They want a return on their investment .

And the only way to get a return on the investment is to make good decisions and hopefully create a medicine that does something that something else can't , because you'll have a lot of adoption in the marketplace , you'll have power to get it used in regimens that can help patients .

So you know , when I've seen people objecting to things , it's usually rooted in fear , and I would say I'm pretty fearless . So I think that was the problem . But we kept it alive and actually decided .

The company decided which was a recommendation I made even after I left unblinded early convert it to a phase two , and unblinded early because it looked like it was taking a long time to read out , meaning the drug was probably active . And that was done .

And that's what you know , really compelled Amgen to to bid on five prime and and good for them because I think they're going to have an excellent product in their hands and it will , uh , extend lives for a lot of people with , hopefully , several types of cancer , but certainly gastric .

Is that where that confidence comes from ?

When you see somebody who knows how to make a decision , knows what they need to enable that decision , they're much more relaxed but very purposeful , and so I think that was imprinted on me to a degree .

And you know , I certainly know my weaknesses and the areas that I'm not the expert in , but I think I am good at integrating and assimilating and synthesizing information to make a decision with my team or , yeah , or sometimes on my own . But uh , you know , a lot of it is is knowing how to do that .

Once you learn how to do that and you see that actually , yeah , I did make a good decision there , you learn from it . Or I didn't make a good decision there , you learn , learn from that . So some of it is the wisdom of of years of experience that you're probably seeing .

And I also have a fantastic team here at at Alos and they did it at a five prime and and the Genentech business development team I was leading as well . So you know I put a lot of emphasis on recruiting really good people . That helps things as well , obviously .

But when I left Five Prime I thought I want to build a company , because I had to do some layoffs at Five Prime and that was no fun and I really hated telling good people goodbye . I didn't want to take apart a company , that's not what was motivating me .

I wanted to build a company and so I wanted to do something from scratch , and so that was the idea for Raise Bio . And the scientific idea came from a former 5 Prime colleague , deb Cherish , who approached me about it .

And immediately I started working with Deb , kind of on a pro bono basis as I was leaving Five Prime and thinking about what I wanted to do next , first in a coffee shop and then we'd get together wherever we could until the pandemic hit , which came about soon thereafter . But initially it was just sort of giving her free advice .

And then she asked me and I decided I did want to be the CEO and put this company together with her and our third co-founder , aaron Kantoff . So that was the triumvirate that formed what became Raised Bio .

And the reason I did it is I'd been looking at the radiopharmacist space , sort of as an observer , just being in the cancer area for many years and seeing things like a radium product that Bayer has now that got approved for prostate cancer acquisitions by Novartis , a French company called AAAS and Endocyte that had targeted radiopharmaceutical products that are now

approved as Pluvicto and Ludathera , and I saw that these things were quite active and that the toxicity could be managed , in contrast to older generation products from years ago .

There were some radio-labeled monoclonal antibodies to CD20 in the early 2000s called bexar and there was another one and they they both had a lot of toxicity associated with them bexar and zevalin but they were very active . So I thought if somebody could control that toxicity with that targeting .

These would be very active agents and so the idea that we had at RAISE and really Deb catalyzed this was using a different targeting modality , which is peptidomimetics . So these are things that are macrocyclic . They form a circular type structure that resemble peptides .

So you get that targeting and specificity that a peptide can give , but with a little bit better half-life . So they're not as permeable or not as likely to be damaged by proteases . So they get a little better half-life , but they're small enough that they can penetrate into the bed of the tumor .

So we thought that would be kind of the Goldilocks targeting modality , because we wanted something that would stay in circulation for a little while , not accumulate in certain organs and damage them , but have enough time to do what it needs to do in the tumor , which is to locally irradiate those tumor cells and kill them .

So we chose that as a targeting technology , which was a good move , I think . We chose that as a targeting technology , which was a good move , I think . And then for the isotope which is the warhead that emits the radiation locally , we went with a different isotope than has been used historically for commercial products and that's Actinium-225 .

So predominantly , to that point , the isotope of choice had been lutetium , which is a beta particle emitter . So to get into the physics a little bit , a beta particle is basically an electron , so lutetium shoots off these electron-like particles . You got to have a lot of those hitting a cell to kill it . They're very small .

They don't have the energy that an alpha particle does . So alpha particles are what actinium-225 emits and you can think of these as like little cannonballs that come shooting off the atom , and one of those can damage the DNA of a tumor cell and kill it . So they pack a lot more punch . And we'd seen some data out of Germany and South Africa .

Tumors that were not responding anymore to lutetium-based therapies were responding to actinium-225 therapies , and so we saw an opportunity there . That was the genesis for the sort of premise of what became RAISE-Bio , which was to combine these things , to marry these two technologies in a way that had not been done before and to select very good targets to go after .

So that was what we did at Raise . We struck deals to access the technology , both on the isotope side and the targeting side , with the peptidome memetics raised some financing . So that was all during the pandemic . It was all done like this over video conference , didn't meet anybody in person then this is sort of early 2020 .

It raised a series A round and then actually built out the company in San Diego and I left the management team at that point , stayed on as an advisor and investor , of course , but I wanted to do another startup , so that is what led me to Alos where I am today . Startup , so that is what led me to Allos where I am today .

But the general sort of decision criteria I've used all along the way is better targeting to the tumors or to the cells that can kill the tumors .

So , whether that was very specific small molecules or antibodies at Genentech , or again a targeted antibody at 5' to FGFR2B , or targeted peptidomimetics with radiation attached at RAISEbio , or now at ALOS , targeting a particular cytokine , it's all been about that to try to limit the side effects , maximize efficacy and to do so in a way that really changes the game

for patient outcomes .

So ATP , the venture capital firm , had seen some technology from biologic design , which is an AI-based creator of antibodies , and in particular , atp saw this program that was targeting the IL-2 cytokine and proposed to biologic design the idea of creating a company around just that program , and that's actually what was the genesis of Allos .

So ATP had the vision and the foresight to see this program , realize that there was something there that , with its own management team and financing , might go faster , might go farther , and I think biologics saw it the same way .

And so the deal that set up Allos was that ATP invested and contributed capital in the series A round and biologic Design contributed the antibodies and the intellectual property and the know-how . And we continue to collaborate with Biologic Design . So they are working with us on a day-to-day basis with the ongoing research and development .

They assigned the rights to the intellectual property to all the antibodies to ALOS and took an ownership stake in the company . So as the value of ALOS increases , their ownership value will increase .

So it's been a very healthy , productive relationship and kudos to both organizations , atp and Biologic Design , for seeing the merit of doing this , and so I was hired as the first employee by ATP and I came in as employee number one in early 2021 . And then it built out the rest of the team here .

But what it was that appealed to me was I knew about IL-2 from years of working in oncology and I worked with clinicians who'd given IL-2 and they'd seen it melt tumors away . They'd also seen it put people in the ICU , so I knew it was a super active cytokine , very potent .

Somebody just called it the OG of cytokines or immuno-oncology drugs , and it is that . It's the first approved immuno-oncology agent dating back to 1992 in the United States , and it's still approved for melanoma and renal cell carcinoma . And when it works it can work beautifully .

You can get durable complete responses and they can last for years like five to seven years median for these durable complete responses when they occur .

Now , not every patient experiences that , and many patients experience a lot of toxicity when they receive high doses of IL-2 because , in addition to activating the immune system , there are receptors for IL-2 that line the vasculature on the endothelial cells and on the smooth muscles around the vasculature that change the diameter of those vessels .

They also express that same target and so there's an on-target effect of IL-2 in that it causes vascular leakage , which means fluid comes out of the blood vessels , the blood pressure drops , the patient swells up , the heart rate often goes up and this can be lethal . So lots of room for improvement in therapeutic index . But I knew it was a very active cytokine .

So when I heard about what Aulos was contemplating this antibody , a human monoclonal antibody that would bind to IL-2 and keep it away from immunosuppressive T regulatory cells and the vasculature but allow it to bind to the effector cells that can kill the tumor , like CD8 T effector cells and K cells I thought that sounds like a really good idea .

But I'm not the immunology expert . So I reached out to some friends and former colleagues who did know immunology and just doing my diligence on it and they said , yeah , that's a really good idea . If it works , that could be a game changer . So that gave me the motivation that I needed to accept the offer and I'm very happy I did .

It's been a great experience and I've built a wonderful team and I still get to work with the people at ATP and Biologic who put this company together and a lot of brilliant minds around the table .

They do it using machine learning algorithms , but it essentially mimics the way we form antibodies when we need to make antibodies , say to a virus or in this case , to tumor cells , or not to tumor cells , to interleukin-2 that will then drive the activity against the tumor cells .

So I thought that this technology made a lot of sense because they trained it on a data set of real proteins , so it wasn't imaginary stuff .

They looked at the sequence of real proteins and real antibodies that bound to those proteins and the epitopes on them where they bound , and the machine was trained on that data set of millions of those interactions and learned .

So if the antibody has binding regions called CDRs and those have their own amino acid sequence , the machine learns if there's a particular amino acid in a particular spot on a particular CDR that's likely to bind to a protein sequence .

That looks like this on the target side or the epitope side , and it can do it in a much more formidable way than the human mind can do , because it's looking at massive data sets and basically doing pattern recognition and predicting what could be done to change the sequence of an antibody to make it even more specific and even higher affinity for a given target

epitope . So , like I said , this is what our bodies do .

When we get sick and need to make antibodies , the immune system asks do I already have an antibody that will kind of bind to that target , either because I was born with it as a germline antibody , or it's one I've acquired throughout my years living in the environment and being exposed to viruses and bacteria and the like , and then that serves as a template

that then gets rapidly optimized . So this is why COVID killed millions of people in the US and worldwide because most of us didn't have a template antibody to SARS-CoV-2 . We hadn't been exposed to a virus that looked like that and , you know , maybe a jump species , and we weren't as humans , we hadn't seen anything like that .

So a lot of us didn't have antibodies . That's why we needed vaccines to create those antibodies . But that's exactly what we do when we need to make antibodies , our immune system says is there a template ?

And then can I quickly refine it through a process called somatic hypermutation , induce lots of changes in the sequences and find something that in a very refined way , binds that particular target with really tight binding and is specific to that target . So that's what Biologic did . And in the case of IL-2 , they wanted to land an antibody just on .

And in the case of IL-2 , they wanted to land an antibody just on a really tiny patch of IL-2 , which is already a small protein to begin with it's 159 amino acids , so not a lot of real estate . And they wanted to dock just on one part , just land on one part of that real estate with an antibody and do it with high affinity .

So they're not the first to try this . Others had attempted it using more conventional antibody generation technologies and were not successful in creating antibodies that would land just on that epitope but still leave other parts of IL-2 exposed .

That epitope , or that region , is the part of the cytokine that binds with one of the receptor subunits called alpha or CD25 . Cytokine that binds with one of the receptor subunits called alpha or CD25 .

So they wanted to hit that but leave the other parts of IL-2 that contact the beta and gamma receptor subunits exposed so that they could then interact with those receptor subunits that are on effector cells . Because the difference between IL-2's activities depends on where it's binding . Between IL-2's activities depends on where it's binding .

Il-2 can be either an immune suppressor or an immune activator and generally when we're healthy we have low levels of IL-2 . It's going to generally act as an immune suppressor because at low levels most of that will be bound by high affinity trimeric receptors , so three-part receptors that are on T-regulatory cells .

The T regulatory cells have as their sole purpose to suppress the immune system . That's their job . They're very good at that , and one Treg can suppress 10 effector cells . So , mentioning the effector cells , they're the ones that can kill tumor cells , survivally infected cells . These are things like CD8 T effectors and natural killer cells .

They express a two-part receptor , a dimeric receptor that lacks the alpha subunit . So the thesis was if you can create an antibody binds to IL-2 and prevents that part of IL-2 from interacting with the third subunit of the trimer , then you'll keep it away from the T-regulatory cells .

You'll also keep it away from the vasculature , by the way , because the vasculature expresses that trimeric receptor and that drives the tox with IL-2 . But you could retain the immune activating portion of what IL-2 can do and expand and activate the CD8 and NK cell populations . We've proven that now preclinically .

So we've looked , you know , bio in vitro with isolated human immune cells . We've looked in animal models and we've seen that we can drive the expansion of the types of cells that can kill tumor cells and we do not expand the T regulatory cells .

In contrast , we actually reduce them and we don't have any of the vascular leak or any of the swelling or cardiac issues associated with hydrosol too .

You know whether they be the design itself , the accuracy of the design , the uh , the efficiency of the creation , the understanding perhaps of a mechanism , but as you describe this , and the complexity and the sort of the finite , to your point , real estate that you had to work with .

I guess I'd hone the question in a little bit on that Um , and you know , I mean , quite frankly , maybe , maybe all of the above , like maybe maybe AI and ML , contributed to that degree of uh , of , of complexity , and also did it in an efficient and far more efficient way than the human mind could have .

You tell me , like , what , what , what's the AI influence on on , on this specific application ?

So empirically it was a struggle , and the AI can just process so many data points so efficiently and again recognize patterns that by brute force or human insight it might take a lot longer to achieve .

So it doesn't mean it couldn't have been achieved some other way , but it hadn't been , and I think it would take a much longer time than it did for biologic and we've moved very fast as a result . So I don't think that AI is the answer for every problem , but it seems to be the answer for this problem .

It's gotten there certainly first and , I think , best .

So that's probably where I had to spend more of my time in the recruiting effort was assuring them that this is , while it's a startup , there's a very clear path here and a lot of the risk has been removed because we know IL-2 is a really active cytokine . It's just very toxic sometimes and this is a chance to do something that nobody else has .

And the other sort of concern that people often have in a company at this stage and for us is this is the only project and , yes , that's right , it is our only project . It also means we can focus and go really efficiently with it . But it's the kind of project that if it works and looks like it is , it will have applications in many different tumor types .

We think this has the potential , like the checkpoint inhibitors which are used in many different solid tumors and liquid tumors . Again , they're immune , activating .

In a way they take the brakes off of T cells , so to speak , through the PD-1 blockade or PD-L1 blockade , and that's something that's proven to be very effective for many different tumor types and is now integrated into standard of care in all sorts of cancers . We could do that here too , and so convincing people that , you know , took some time and effort .

But I think the people who are attracted to it are the ones who are willing to take that risk and see the potential to make a big difference clinically and to build a great company . So people self-select . But you know I chose in some cases people I knew or knew of .

In other cases it was people I didn't know , but I really liked their backgrounds and how they approached the company and the problems we're trying to solve . So our chief medical officer , for instance , gave IL-2 to many patients when he was at NIH and knows how it looks and how the responses manifest and how the toxicity manifests as well .

So it's hard to find that expertise in every medical oncologist and that's a big reason I chose him . Plus , he'd been at other small companies and you know I thought he would because of his experience with immune engagers and antibodies , he was a great fit . So that's an example and he is a great fit . He's an example and he is a great fit .

He's doing great works . And then our chief financial officer was somebody I worked with before at genentech and I knew he was a very skilled and capable executive . And the rest of the team , you know . Again , we we select on that basis . Are they willing to take the risk and do they want to build something ? And all of them do , yeah .

There have also been some big failures and billions of dollars spent trying to improve upon aisle two and hasn't really advanced to very far because mechanistically there have been issues with some of the prior approaches . Mechanistically there have been issues with some of the prior approaches .

We're doing something completely unique in the class and I think it will emerge as best in the class as a result . So when I look at all the competitors and there are several big pharma but also small biotech international competitors it is a crowded field in that sense , but I think we can win because the entirety of that competitive class is varying .

On the theme of IL-2 itself , they're altering IL-2 itself through various strategies . So that's been pegylation , albumination , fusing to CD25 , fusing to anti-CD8 antibody , fusing to an anti-PD1 antibody , masking with units that are proteolytically cleaved in the tumor theoretically .

So these are all ways of changing IL to itself and those address some of the problems and they sometimes have reduced toxicity . Some have activity too , but because they're not natural proteins , very often they're difficult to manufacture . They frequently have short half-lives .

The immune system sees them as foreign objects and tries to clear them and actually makes anti-drug antibodies , frequently to things that have exotic attachments or or non-human sequences . What we're doing is completely different . We're using native il2 , so we're not altering il2 itself .

We're using what the body makes or a carbon copy of that which is recombinant human-2 proleukin . That looks just like what our body makes . We're using that and we're redirecting it with a human antibody , which also looks like what our body makes .

So from that sense , the ALOS approach looks a lot more native or natural to the immune system because we're using human IL-2 and human antibody and we're not changing IL-2 , we're redirecting it . So , as I mentioned , our antibody lands in IL-2 , in a human antibody , and we're not changing IL-2 , we're redirecting it .

So , as I mentioned , our antibody lands on IL-2 , does so with high affinity and a low off rate .

So once it grabs the IL-2 , it keeps it bound and that complex can then activate the cell types we wish to activate , which are the CD8 T-effectors and the natural killer cells , and a portion of the T-cells as well go on to become central memory cells , so memory is induced , which is also very important , and we're keeping IL-2 away from the vasopature and the

Tregs , so we will improve both safety , we believe , and efficacy as a result of that . So it's not to criticize the other approaches that are being taken , but they're totally different and we're unique in the field in that we're going at this with native IL-2 and a human antibody , and human antibodies are great drugs .

We know that some of the biggest brands , whether it's Keytruda or Humira or what have you , are based on human or humanized antibodies . So it's a tried and true and very effective way to drug targets in cancer and other disease states . And we don't see anti-drug antibodies . We see a long half-life in humans over two weeks .

We don't see any of the safety issues that have been historically associated with hydroxyl too , so it's looking very promising . I'm not afraid of the sharks .

I'm sure that you've delivered some of the facts , figures and stats repeatedly over the course of the last several days . Share a few of them with us here . What did you present down there ?

So in phase one we were testing a variety of antibody doses as well as il-2 doses , because we have decided it's more effective to sprinkle in a little bit of low dose proleukin or l2 very low dose , and that seems to activate the immune system and lead to responses more often .

So in one we were tuning all of those dials and we settled on our antibody dose and we settled on our Prolucan dose in phase one . Now in phase two , the only thing that we're changing is the schedule of Prolucan .

So we're testing whether just one dose is enough to kickstart the immune system or if we want to give it every two weeks alongside the antibody , every two weeks alongside the antibody . So we'll answer that this year . What we saw in phase one is that the regimen is well-tolerated . It has a very good safety profile .

Most of the AEs were grade one or grade two . They quickly reversed . We have seen some AEs associated with immune activation , so cytokine release syndrome , and that was quickly reversible and controlled with steroids and didn't occur in very many patients . And we saw some transient lymphopenia which is more of a lab finding .

It doesn't mean we're killing the lymphocytes but it's known with IL-2 that when you give IL-2 , it causes trafficking of the lymphocytes out of the vasculature . So for a period of time the lymphocyte count in the bloodstream drops . It's likely going up in the tissue and then that rebounds and there's no clinical effect of that , nothing negative .

So we and the investigators are very impressed with the tolerability and safety profile of this regimen . Then on the activity side , even in phase one we've seen activity . So in phase one we have patients with deep and durable responses . We've had some on over a year and notable responses in melanoma .

So a patient who had not responded to prior anti-PD-1 and anti-CTLA-4 therapy came onto our trial and is still on treatment , has a 48% reduction in his tumor . And we had a bladder cancer patient in phase one as well who has a complete metabolic response by PET .

So PET measures the metabolic activity of the tumor and it's clear that the tumor looks dead on the PET scans versus baseline that patient's on therapy about a year as well and then even in phase two , which is early we just started it but we have already the first patient treated has a response , a deep response melanoma minus 76% , and again that patient had not

responded to anti-PD-1 and anti-CTLA-4 . So we're impressed by what we're seeing . We've got patients with shrinkages in lung cancer as well renal cell carcinoma , colorectal cancer . So it's early still but very promising based on what we've seen to date .

And this year we'll complete the phase two cohorts or largely complete enrollment in RCC and melanoma , comparing that schedule where we give either one dose of IL-2 with our antibody or every two week dosing of IL-2 with our antibody .

And later this year we'll open up cohorts in non-small cell lung cancer both with and without the checkpoint inhibitor , evalumab or Bivencio , which is a product from Merck KGAA in Germany . We announced in mid-May that we have a relationship with them .

Now we're providing us with drug supply for use in our clinical trial and we've seen preclinically that this combination is synergistic . We can clear established tumors when we give our antibody AU007 plus IL-2 plus anti-PD-L1 , a surrogate that looks like a Valumab .

And we selected that antibody in particular because , although there's a lot of checkpoint inhibitors that are approved , both anti-PD-1 and PD-L1, .

This is the only one that has what's called a vector function , so it has a competent fc domain that will engage the receptors on natural killer cells , meaning that if a cell overexpresses pdl1 and the evaluamab binds to that pdl1 , a natural killer cell will then bind to that and attack and kill the tumor cell .

So we like that , because one of the things that we do with our AU007 IL-2 regimen is boost not only T cells but NK cells as well , and the NK cells are the ones that can kill via this mechanism called ADCC , and a value map offers that that potential , as well as being a checkpoint inhibitor .

Very instructive and I like talking to you , aaron , you're a pleasure to talk to .

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