APLS 2017 Annual Report

16 laboratory assessment. Primary efficacy endpoints will include change from baseline hemoglobin levels, number of red blood cell transfusions during the trial, change from baseline in absolute reticulocyte count, LDH, haptoglobin, indirect bilirubin, APL-2 serum concentration and other PK parameters, change in quality of life scores, and measurements of complement levels and C3 deposition on red blood cells. This trial will be conducted under our existing IND for PNH. We plan to report data from these patients in the second quarter of 2018. Nephrology (systemic APL-2) Complement-Dependent Nephropathies IgA nephropathy, or IgAN, lupus nephritis, idiopathic membranous nephropathy and C3 glomerulopathy are diseases caused by activation of complement pathways. In all of these diseases, immune complexes (autoantibody-antigen complexes) or C3 are deposited in the portion of the kidney known as the glomeruli, which is responsible for blood filtration. These deposits lead to activation of either all three or two of the three principal pathways of the complement system: classical, lectin and alternative. By targeting C3 at the point of convergence of all three pathways, we believe APL-2 has the potential to prevent C3 activation and C3- mediated inflammatory response responsible for the renal manifestations of injury common to all these diseases. We met with the FDA in October 2017 in a pre-IND meeting and submitted an IND to the FDA in November 2017. We plan to initiate a single prospective open label Phase 2 clinical trial in patients who have been clinically diagnosed with IgA nephropathy (IgAN), lupus nephritis, idiopathic membranous nephropathy or C3 glomerulopathy in the first half of 2018 to evaluate safety and preliminary activity of APL-2 in patients with these complement-dependent nephropathies. We plan to enroll up to 12 patients per disease. The clinical diagnosis for each patient must be confirmed by renal biopsy prior to dosing with APL-2. Each patient will receive once daily subcutaneous infusions of up to 360 mg ofAPL-2 for 16 weeks. The primary efficacy endpoint will be the reduction in proteinuria from baseline to week 16. Based on the scientific literature, which has shown a correlation between reduced proteinuria and improved clinical outcomes, we believe that a substantial reduction in proteinuria is considered reasonably likely to predict a clinical benefit in IgAN, and the FDA has accepted reduction in proteinuria as an endpoint in third-party clinical trials for each of the indications that we are evaluating in the trial. We plan to report data from these patients in the second half of 2018. Other Complement-Dependent Diseases We are developing APL-9 for intravenous administration in systemic indications. We are conducting a single ascending dose Phase 1 randomized, double-blind, placebo-controlled clinical trials of APL-9 in healthy volunteers. This trial will enable us to determine the safety, PK and PD of APL-9. In this trial, APL-9 will be administered by an intravenous infusion of approximately 30 minutes to healthy volunteers on the first day of the trial and followed by eight days of monitoring. We plan to enroll 24 subjects in this trial. Subjects will participate in one of four cohorts. The starting dose for the first cohort will be 30 mg of APL-9 and we will determine the doses for the subsequent cohorts after safety review by a safety monitoring committee. Systemic Administration Drug Delivery System In our clinical trials, we are currently using an off-the-shelf, FDA-cleared device that enables patients to self-administer APL-2 through subcutaneous infusion. In addition, we are developing, with a third-party manufacturer, a custom, on-body drug delivery system that would further improve the ease of self-administration of APL-2. While our goal is to commercially launch APL-2 in PNH together with the custom drug delivery system, we can commercialize APL-2 without the custom drug delivery system, in which case marketing approval for APL-2 will not be contingent upon approval of the drug delivery system. Intellectual Property Our success depends in part on our ability to obtain and maintain proprietary protection for our product candidates, technology and know-how, to operate without infringing the proprietary rights of others and to prevent others from infringing our proprietary rights. We seek to protect our proprietary position in a variety of ways, including by pursuing patent protection in certain jurisdictions where it is available. For example, we file U.S. and certain foreign patent applications related to our proprietary technology, inventions and improvements that are important to the development of our business. We also rely on trade secrets, know-how, continuing technological innovation and in-licensing opportunities to develop and maintain our proprietary position. We have developed our lead product candidate, APL-2, which is an analog of the cyclic peptide compstatin, based on technology that we have exclusively licensed from the Trustees of the University of Pennsylvania, or Penn, including a license agreement with Penn that was assigned to us in connection with our acquisition of the assets of Potentia in September 2015. The intellectual property in-licensed under our two license agreements with Penn includes four U.S. patents and two pending U.S. patent applications, including original filings, continuations and divisional applications, and numerous foreign counterparts, with claims