APLS 2017 Annual Report

12 Current Therapies and Their Limitations The only approved drug for the treatment of PNH is eculizumab, marketed as Soliris by Alexion Pharmaceuticals, Inc., or Alexion. Eculizumab had reported worldwide sales of more than $2.8 billion in 2016 for its two approved indications, PNH and atypical hemolytic-uremic syndrome, or aHUS. We believe the price per year for treatment with eculizumab is approximately $500,000 in adults. Eculizumab, which is administered every two weeks intravenously, or directly into the veins, is designed to treat PNH by targeting C5 and preventing the formation of the membrane attack complex and intravascular hemolysis. Many patients with PNH on treatment with eculizumab continue to be anemic. In addition, in a third-party study, 35% to 40% of patients on eculizumab continued to be transfusion dependent for 30 months following the beginning of treatment. We believe that inability of eculizumab to control extravascular hemolysis is responsible in part for these continuing complications. Alexion is evaluating ALXN1210, its second-generation C5 inhibitor, in Phase 3 clinical trials as a potential treatment for patients with PNH, administrated intravenously every eight weeks and subcutaneously once per week. ALXN1210 is designed to have a longer half-life and greater inhibition of C5 than eculizumab. Benefits of Our Approach We believe that, because APL-2 inhibits complement activation at the level of C3, APL-2 may provide the following benefits in controlling PNH: • Prevention of intravascular hemolysis and its consequences . APL-2 prevents the formation of the membrane attack complex and may thereby prevent the activation of mutant platelets and intravascular hemolysis, thus reducing the risk of thrombosis, the leading cause of mortality in PNH, as well as reducing anemia. • Prevention of extravascular hemolysis and its consequences . APL-2 prevents C3b opsonization, and may thereby prevent extravascular hemolysis, further reducing anemia and transfusion dependency in patients with PNH. • Ease and convenience of use . We have formulated APL-2 so that it may be self-administered by patients with PNH by subcutaneous injection. Because APL-2 is stable at room temperature for weeks in liquid, patients will be able to self- administer APL-2 without a visit to the physician. We are initially developing APL-2 for self-administration, either daily or less frequently (such as twice per week). We believe that the ability to self-administer APL-2 on a regular basis could improve the quality of life for patients with PNH. We are developing a drug delivery system to facilitate APL-2’s ease of use and self-administration for patients. Clinical Development Our clinical development program is guided by a planned commercial switch-over strategy for APL-2. Under this strategy, following marketing approval, we plan to allow PNH patients on treatment with eculizumab to assess the benefit of APL-2 in co- treatment with eculizumab for a limited time, before deciding to switch to APL-2 monotherapy or to revert to eculizumab monotherapy. We are conducting two clinical trials of APL-2 as part of our PNH program: a Phase 1b clinical trial in patients with PNH being treated with eculizumab and a Phase 1b clinical trial in treatment-naïve patients. These trials are designed to assess safety and tolerability and whether APL-2 has the potential to control PNH. In these trials, we are measuring hemoglobin levels, which are significantly lower in patients with PNH, whether or not treated with eculizumab, and blood reticulocyte count, which is an indicator of overall hemolysis (both intravascular and extravascular) in patients on eculizumab. We are also measuring intravascular hemolysis based on lactate dehydrogenase, or LDH, levels, which can be ten times higher than normal in patients with PNH, and the clonal distributions of normal red blood cells and mutant red blood cells unprotected from the membrane attack complex. In both Phase 1b trials to date, patients treated with APL-2 have experienced reductions in LDH levels, and improved hemoglobin levels. Furthermore, we have observed lower reticulocyte counts in patients treated with APL-2, which we believe reflects that the bone marrow is producing fewer red blood cells because fewer red blood cells are destroyed by hemolytic activity. We believe that the clonal distribution of red blood cells in treated patients suggests that fewer mutant cells are destroyed by hemolytic activity. We plan to initiate a Phase 3 clinical trial in patients with PNH comparing treatment with APL-2 to treatment with eculizumab as a monotherapy in the second half of 2018. We plan to enroll up to 70 patients with PNH in this trial who are then receiving eculizumab. The treatment period of the trial will consist of three parts: a four-week run-in period, a 16-week randomized treatment period and a 32-week open-label APL-2 only period. During the run-in period, all patients will receive twice-weekly subcutaneous doses of 1,080 mg of APL-2 in addition to patients’ then current dose of eculizumab. The run-in period is designed to provide patients with sufficient plasma concentration of APL-2 to provide for what we expect to be adequate complement inhibition before withdrawing eculizumab. Following completion of the run-in period, patients will receive either 1,080mg of APL-2 twice per week or their current dose of eculizumab through the duration of the 16-week randomized treatment period. We expect that the primary endpoint will be the week 16 change from baseline in hemoglobin level. Following completion of the randomized treatment period, all patients will receive APL-2 only for 32 weeks in the open-label part.