Q2 2020 Deciphera Pharmaceuticals Inc Earnings Call

Good afternoon, everyone.

Unknown Executive: Good afternoon everyone, and welcome to Deciphera Pharmaceuticals' second quarter 2020 financial results conference call. Today's call is being held At this time, I would like to turn the call over to Jen Robinson, Vice President, Investor Relations. Thank you, Rochelle.

This high for US Pharmaceuticals second to Florida Chinese can you say National results Conference call todays call is being recorded at this time I was trying to call very good gentleman shouldn't Vice President Investor Relations Jay.

Thank you Michelle welcome and thank you for joining us today to discuss the site for a second quarter 2020 financial results.

Jennifer Larson: Welcome, and thank you for joining us today to discuss Decipher's second quarter 2020 financial results. I'm Jen Robinson, Vice President, Investor Relations at Deciphera. With me this afternoon to discuss the financial results and provide a general corporate update are Steve Hoerter, President and Chief Executive Officer, Dan Martin, Chief Commercial Officer, Matt Sherman, Chief Medical Officer, and Tucker Kelly, Chief Financial Officer. Before we begin, I would like to remind you that any statements we make on this call that are not historical facts are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litig Examples of forward-looking statements made during this conference call include our expectations for our preclinical and clinical programs, our commercialization of Kinloch, and our 2020 guidance.

Robinson, Vice President Investor Relations at the site.

With me this afternoon to discuss the financial results and providing general corporate update our Steve hurt, our President and Chief Executive Officer, Dan Barton, Chief Commercial Officer, Nat Sherman Chief Medical Officer attacker, Kelly Chief Financial Officer before we begin I would like to remind you that any statements we make.

This call that are not historical facts are forward looking statements, reflecting the current beliefs and expectations of management made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1995. Examples of forward looking statements made during this conference call include our expectations for our preclinical.

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Commercialization of cannot and 2020 guidance.

Jennifer Larson: Forward-looking statements made on this call involve substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements, and we cannot assure you that our expectations will be achieved. Such risks and uncertainties include the potential impact of COVID-19, the execution of clinical trials, the timing of study data, and those set forth in our most recent quarterly report on Form 10-2, as well as in our other SEC filings. We assume no obligation to update or revise any forward-looking statements.

Forward looking statements made on this call involve substantial risks and uncertainties that could cause actual results could differ materially from those expressed or implied by the forward looking statements and we cannot assure you that our expectations will be achieved such risks and uncertainties include the potential impact cobot 19.

Keep in the clinical trials, the timing of study data and those set forth and our most recent quarterly report on form 10-Q as walls are other SCC filings.

We assume no obligation to update or revise any forward looking statements. Following this call a replay will be available on the company's website www decipher dotcom with that I'll now turn the call over to Steve harder, President and Chief Executive Officer of Deciphering Steve.

Jennifer Larson: Following this call, a replay will be available on the company's website, www.deciphera.com. With that, I will now turn the call over to Steve Hoerter, President and Chief Executive Officer of Deciphera. Thank you, Jen. Good afternoon, everyone, and thank you for joining us on today's call. Decipher's mission has always been focused on discovering, developing, and delivering important new medicines for the treatment of cancer. And in the second quarter, we were proud to announce FDA approval of our first product, Kenlock, for the treatment of patients with fourth-line GIST. Kenlock was designed and purpose-built for the treatment of this disease and is the only approved drug in the post-imatinib setting that offers a clinically meaningful overall survival benefit for just patients. The FDA approval and launch of Kenlock is an important milestone for the thousands of people in the United States facing a just diagnosis and also serves as validation of Deciphera's novel approach to designing switch control kinase inhibitors.

Thank you John Good afternoon, everyone and thank you for joining us on todays call decipher. His mission has always been focused on discovering developing and delivering important new medicines for the treatment of cancer.

And in the second quarter, we were proud to announce after FDA approval of our first product catalog for the treatment of patients with fourth line just.

Good luck was designed and purpose built for the treatment of this disease and is the only approved drug in the post a madden upsetting that offers a clinically meaningful overall survival benefit for just patients.

The FDA approval and launch of can lock is an important milestone for the thousands of people in the United States facing a just diagnosis.

And also serves as validation of decipher as novel approach to designing switch control kinase inhibitors.

Jennifer Larson: FDA's approval of the Kenlock NDA came approximately three months ahead of its PDUFA date and was reviewed under the FDA's Real-Time Oncology Review Pilot Program with Priority Review. The Kinloch NDA was also part of Project Orbis, an initiative of the FDA Oncology Center of Excellence that provides a framework for concurrent submission and review of oncology drugs among participating international health authorities. As part of this initiative, we recently announced the approval of Kenlock by Health Canada and by the Australian Therapeutic Goods Administration. Additionally, as we look to further expand access to Kenlock outside of the United States, we intend to file a marketing authorization application with the European Medicines Agency in the fourth quarter of this year. Finally, last month, we were excited to announce, along with our partner, ZyLab, that the China National Medical Products Administration, or NMPA, had accepted the NDA for Kenlock. And earlier today, Xi announced that the Kenlock NDA has received priority review.

After years approval of the can lock in D.A. came approximately three months ahead of its PDUFA date and it was reviewed under the F.D. age real time on Cold Your view pilot program with priority review.

They can lock in D.A. was also part of project for this initiative of the F.D.A. Oncology Center of excellence that provides a framework for concurrent submission and a review of oncology drugs among participating international health authorities.

As a part of this initiative, we recently announced the approval of can walk both by health, Canada and by the Australian therapeutic goods administration.

Additionally, as we look to further expand access to can lock outside of the United States, We intend to file a marketing authorization application with the European Medicines agency in the fourth quarter of this year.

Finally last month, we were excited to announce along with our partner Zied lab that the China National Medical products administration, or an M.P.A. has accepted the M.D.A. for can lock.

Earlier today, XOI announced that they can lock and D.A. has received priority review.

Steven L. Hoerter: Prior to receiving FDA approval, our commercial and medical affairs teams had been working diligently to lay the groundwork and optimize readiness for the commercial launch. Because of their dedication and hard work, we were able to ensure that Kenlock was commercially available through our limited specialty pharmacy network within one week of approval. During the call today, Dan Martin, our Chief Commercial Officer, will share our initial insights into the commercial launch. While we are still in the early days of the launch, we are very pleased with our progress so far and believe that Kenlock has the potential to transform the treatment of GIST in the post-imatinib setting. Beyond Kinloch, we continue to advance our pipeline of novel switch-control kinase inhibitors.

Prior to receiving FDA approval, our commercial and medical affairs teams had been working diligently to lay the groundwork and optimize readiness for the commercial launch.

Because of their dedication and hard work, we were able to ensure that can lock was commercially available through our limited to specialty pharmacy network within one week of approval.

During the call today, Dan Martin, our Chief Commercial Officer, we'll share our initial insights into the commercial launch.

While we're still in the early days of the launch we're very pleased with our progress so far and believe that can lock has the potential to transform the treatment of just in the post a mountain upsetting.

The onto can lock, we continue to advance our pipeline of novel switch control kinase inhibitors, and Matt Sherman, Our Chief Medical Officer will discuss in further detail. The progress we've made across our portfolio of product candidates, including our plans to declare a recommended phase two dose.

Steven L. Hoerter: And Matt Sherman, our Chief Medical Officer, will discuss in further detail the progress we've made across our portfolio of product candidates, including our plans to declare a recommended phase 2 dose for DCC 3014 for tenosynovial giant cell tumor and present additional data from our phase 1 study in patients with TGCT later this year. I'll now turn the call over to Dan Martin, our Chief Commercial Officer, to discuss the exciting results for the first partial quarter of our Kinloch commercial launch. Dan?

Yes for D.C.C. 30, 14 intend to Sanofi, all giants cell tumor and to present additional data from our phase one study in patients with TGC Ci later this year.

I'll now turn the call over to Dan Martin, Our Chief commercial officer to discuss the exciting results for the first partial quarter of our catalog commercial launch Dan.

Thank you Steve good afternoon.

Daniel C. Martin: Thank you, Steve. Good afternoon. Today, I'm pleased to share results from Deciphera's first partial quarter as a commercial stage company, as well as initial insights regarding the Kinloch launch. It's important to recall that Kinloch was approved in May. Therefore, the commercial results and early launch insights I will share come from just 31 sales over a period of approximately. We are very pleased with the results of our first partial quarter of launch. Q2 net product revenue for Kinloch was $4.8 million. Several important factors contributed to this.

Today I'm pleased to share results from Desypris first partial quarter as a commercial stage company as well as initial insights regarding they can lock launch.

It's important to recall the catalog and stuff makes it.

Yes.

Sold launch in place I will share comes from just 31 selling days over a period of approximately six weeks.

We're very pleased with the results of our first partial quarter of launch.

Q2, net product revenue for can lock was $4.8 million.

Several important factors contributed to this results.

Daniel C. Martin: The first is strong prescriber demand. Based on feedback from our sales team, market research, and interactions with key opinion leaders, we believe that strong demand was the result of high unmet need and advanced, Rapid Growth in Awareness. Just Treaters' positive perceptions of the Kinloch Clinical Profile and FDA Labor, and the focus and determination of our customer-facing teams, despite the challenging selling environment presented by COVID-19. Second, we were very pleased to see significant prescriber breadth and, In this initial six-week launch period, there were more than 100 unique Kinloch prescribers representing more than 90 unique institutions. Approximately 50% of prescribers and 40% of Kinloch patients treated were from community accounts.

First it's strong prescriber demand.

He pumps feedback from our sales.

Market research and interactions with key opinion leaders. We believe this strong demand was a result of high unmet need in advanced chip.

Rapid growth in awareness of Kim.

Just treaters positive perceptions of the can lock clinical profile and FDA label.

And the focus and determination of our customer facing team despite challenging selling environment.

Right.

We were very pleased to see significant prescriber breadth and diversity.

And this initial six week launch period, there were more than 100 unique and lock prescribers, representing more than 90 institutions, approximately 50% of prescribers and 40% of two month treated patients were from community account.

Daniel C. Martin: Consistent with our understanding of where GIST patients receive treatment, and nearly 80% of and other thriving institutions had no prior experience with ChemLock from participation in clinical trials or our expanded access program. Third, I am pleased to share that our market access team has rapidly achieved broad patient access to Kenley. Our extensive launch preparations enabled us to deliver our first patient shipment of Kinloch within days of approval, and this has led to broad coverage by Medicare Incorporated.

Consistent with our understanding of weren't just patients receive treatment.

In nearly 80% he's prescribing it.

Okay.

Participation in clinical trials or our expanded access program.

Third.

I'm pleased to share that our market access Ti has rapidly achieved broad patient access can like.

Our extensive launch preparations enabled us to deliver our first patient shipment of can lock within days of approval.

Additionally, our payer focused efforts have led to broad coverage.

Hi, Karen.

Daniel C. Martin: Including adoption of favorable coverage. Transcribed by https://otter.ai, In addition to strong demand, encouraging prescribers, our Q2 results benefited from several additional factors. First, our Q2 revenue included a modest contribution from patients who switch to commercial drugs from our expanded access program in the U.S. The U.S. portion of our..., program was closed in May upon FDA approval of KINLAW. As with any oral onc

Including adoption of favorable coverage policies that are consistent with label.

In addition to strong demand encouraging prescriber bread and broad patient access our Q2 results benefited from several additional factors first our Q2 revenue included a modest contribution from patients who switched to commercial drug from our expanded access program in the U.S.

The U.S. portion.

This program was closed in May upon FCC approval Campbell.

In addition.

As with any oral oncology launch our Q2 product revenue included the impact of initial inventory build within our network of specialty pharmacies and specialty distributors.

Daniel C. Martin: Our Q2 product revenue included the impact of initial inventory bills within our network of specialty pharmacies and specialty distributors. However, inventory held by our channel partners was in line with our days on hand. And we expect this inventory impact to diminish in subsequent quarters. During this initial six-week launch timeframe, the percentage of patients receiving free drugs under our patient assistance program was lower than our estimate of approximately 20 to 30 percent. However, as we communicated previously, this percentage can vary quarter to quarter, and moving forward, we continue to expect approximately 20 to 30 percent of patients to receive free drugs as part of this program. Before turning the call over to Matt, I would like to provide an update regarding our experience navigating the unprecedented challenges of the coronavirus pandemic and our expectations regarding potential impacts moving forward. As I reviewed in my previous review, the cross-functional launch team has worked extremely hard to adapt our launch strategies and tactics to a virtual model. This includes developing and deploying remote detailing capabilities and increasing our investment in digital and other non-personal marketing channels.

Inventory held by our channel partners was in line with our kids and targets and we expect this inventory impact diminish in subsequent quarters.

Lastly.

The fundamental since we launched timeframe the percentage of patients receiving free drug under our patient assistance program was lower than our estimate of approximately 20% to 30%. However, as we communicated previously this percentage can vary quarter to quarter and moving forward. We continue to expect approximately 20% to 30% of patients to receive.

Free drug that's part of this program.

Before turning the call, Matt I would like to provide an update regarding our experience navigate the unprecedented challenges at the current virus.

And our expectations regarding.

[music].

As I reviewed on previous calls the cross functional launch team has worked extremely hard to adapt our launch strategy tactics to a virtual model. This includes developing and deploying remote detailing capabilities and increasing our investment in digital and other topics first the marketing channels.

Early experience.

Daniel C. Martin: Our early experience is that while virtual details can be effective, accessing and coordinating the activities of physicians, pharmacists, and other critical stakeholders within large, complex healthcare institutions can be quite challenging and can take longer than usual when required to do so remotely. Additionally, our recent market research with GIST prescribers indicates that GIST patient volume remains below pre-COVID-19 levels and that some GIST treaters may consider delaying treatment switches for advanced GIST patients due to COVID-19-related concerns. Last, it remains to be seen what impact the millions of people who are newly uninsured due to pandemic-related job losses will have on the proportion of patients eligible to receive free drugs under our patient assistance program.

We'll details can be effective.

Accessing and coordinating be activities of physicians pharmacists and older crude and stakeholders within large complex healthcare institutions can be quite challenging and can take longer than usual when required to do so remotely.

Additionally, our recent market research with just prescribers indicate that just patient volume remains below pre covert 19 levels. So I'm, just treaters might consider delaying treatment switches for advanced chips patients due to cope with 19 related concerns.

Lastly, it remains to be team what impact the millions of people who are newly uninsured due to pandemic related job losses will have on the proportion of patients eligible to receive free drug under our patient assistance programs.

Matthew L. Sherman: Therefore, while we are very pleased with GISTTreaters' initial response to Kinloch, we also recognize the potential for the continued spread of COVID-19 to impact physician access, GIST patient treatment, and the rate of uptake for Kinloch in the near term. I will now turn the call over to Matt to discuss the progress of our ongoing clinical programs.

Therefore, while we are very pleased with just Strykers initial response.

The ultimate [laughter].

Continued spread of covert 19 impact position access just patient treatment and the rate of uptake for kids in the near term.

I will now turn the call over to map to discuss the progress for ongoing clinical programs that.

Thank you Dan.

Matthew L. Sherman: Thank you, Dan. As Decipher has transitioned into a commercial stage company, we've remained deeply committed to furthering our understanding of co-chemical identifications beyond our initial approval in fourth one GIST and in advancing our additional ongoing clinical stage programs to create new medicines for patients with significant unmet medical needs. While our commercial team executes a successful launch, our medical team continues to support the potential of Kinloch and GIST with a robust publication plan and a life cycle management strategy that includes the potential to treat second-line and beyond just patients. In June, results from the Pivotal Invictus Study were published in Lancet Oncology highlighting ChemLock's significant improvement in progression-free survival, or PFS, compared to placebo, as well as its clinically meaningful improvement in overall survival, along with a well-tolerated safety profile.

That's the surface transitions into commercial stage company.

We remain deeply committed to correct.

Just any more feet on the patients beyond our initial approval in the first one just never advancing or additional ongoing clinical stage programs create new medicines for patients with significant unmet medical needs.

Well the commercial team executed successfully launch.

Our medical team continues to support the potential looks can walk in just.

With a robust publication plan, yeah, it's like a member strategy.

Which includes the potential to treat second line and beyond just patients.

In June results from the pivotal and pick the study were published unless one college.

Highlighting the most significant improvement in progression free survival or PFS compared to placebo as well lessons clinically meaningful improvement in overall survival, along with a well tolerated safety profile.

We also presented additional Kim Lucky that's come in Texas study demonstrating positive patient reported outcome result.

Matthew L. Sherman: We also presented additional Kinloch data from the INVICTUS study demonstrating positive patient-reported outcome results at the ESMO Virtual Scientific Program in May and additional clinical benefits for cross-cover patients at the ESMO World Congress of Gastrointestinal Cancer 2020 virtual meeting in July. At the upcoming ESMO virtual conference in September, we look forward to presenting additional data from the ongoing phase one study of QI. [inaudible] The first presentation is titled Repertative Intra-Patient Ghost Escalation Following Disease Progression, and it provides clinically meaningful progression pre-survival in gastrointestinal stromal tumors in phase one.

[laughter] virtual friends of the program today, you have to additional clinical benefit for crossover patients.

As for World Congress in gastric cancer 20 Twond.

Sure.

At the upcoming.

Virtual cards in September we look forward to presenting additional data can be ongoing phase one studies.

[laughter].

Well the presentation.

The first presentation is title.

We're pretty interpretation dose escalation owning disease progression.

Provides clinically meaningful progression free survival they've got.

The tumor [laughter].

This presentation.

Matthew L. Sherman: This presentation focuses on GIST patients who were enrolled in the de-escalation and expansion phases across second, third, and fourth line treatment who received Kinloch 150 mg QD. Patients in the Phase I study had the option to be dose-escalated to 150 mg BIK. We will report at the meeting the initial progression-free survival, or PFS1, and the subsequent progression-free survival, or PFS2, from the date of dose escalation to second-disease progression or death from this subgroup of patients who are dose escalated to 150 milligrams PIV. The second presentation is titled Clinical Benefits, with reported as fourth-line or greater treatment in patients with advanced chest Update from the Phase 3 Infectious Study

Focuses on the just patients who weren't.

Since we shouldn't have extension faces the CRO second third and fourth corn treatment, who received two like 150 milligrams Qt.

Patients in the Phase one study had the option to be dose escalated to wonder 50 milligrams VIP.

We will report after meeting the initial progression free survival were PFS, one and the subsequent progression free survival or PFS too from the date dose escalation to second disease progression or death.

Subgroup of patients who doesn't escalates, it's 150 milligrams during.

[laughter] presentation this title clinical benefit.

With regard that as Forcepoint a greater treatment.

Patients with advanced chest update from the phase three study.

This presentation will probably wake up to the PFS by blinded Independents Central review is west survival in safety with the new did a kubasik March nine 2020, which is an additional nine months of public from the data presented at ESMO last year.

Matthew L. Sherman: This presentation will highlight updated PFS by blinded independent central review, overall survival, and safety with a new data cutoff of March 9, 2020, which is an additional nine months of follow-up from the data presented at ESMO last year. Our team at Decipher continues to be encouraged by the potential for Kinloch to meaningfully alter the treatment landscape for the spectrum of patients across multiple lines of therapy. While Kenloch is being well-received by fourth-line gist patients and their treating physicians, we look forward to advancing Kenloch for the treatment of patients with second-line gist, where we believe it can also provide meaningful benefits. To that end, we are pleased to report today that we are on track to complete the target enrollment in the fourth quarter of this year in our ongoing and treating phase three studies box compared to the current standard of care in Currently, there are 122 sites in 22 countries that have been activated in the INTRIGUE study.

Oh team at the site for continues to be encouraged by the potential for care a lot to meaningfully altered the treatment landscape for the spectrum as patients across multiple lines of therapy.

Well good luck is being well received like fourth once patients in the treating physicians, we look forward to advancing caremark for the treatment of patients, but second one just where we believe it also provides meaningful delta.

To that then we're pleased to report today than we were on track to complete the target enrollment in the fourth quarter disappear and our ongoing and treat phase three study.

Compared to the current standards can sunitinib in patients with second line chips.

Currently there are 122 sites and 22 countries that have been activated intrigue study.

We also continued to rapidly the answer next wave of novel switch control kinase inhibitors first turning to DCC 30, 14, our potent and selective inhibitor. She was up one or we are on track for what the phase two dose level for treatment of tennis Inovio Jain from tuner or TCT <unk> mission extension.

Matthew L. Sherman: We also continue to rapidly advance our next wave of novel switch control kinase inhibitors. First, turning to DCC3014, our potent and selective inhibitor of CSF1R, we are on track to select a phase 2 dose level for treatment of tenosynovial giant cell tumor, or TGCT, and initiate the expansion cohort later this year. We expect to present data from additional patients from the just-escalation portion of the Phase 1 study at a medical meeting in the fourth quarter. As you recall, we presented initial clinical proof of concept data in three TGCT patients at the Connective Tissue Oncology Society (CTOS) annual meeting last year, and we look forward to sharing additional data later this year. Turning to radafinib, our potent and selective type two inhibitor, we are conducting two clinical phase 1b2 studies in combination with chemotherapy, one with paclitaxel and one with carboplatin.

So this year.

We expect to present data from additional patients from a dose escalation portion of the phase one study of a medical meeting the fourth quarter.

As you recall, we presented initial clinical proof of concept data and Threed PGC patients at the connective tissue oncologist to sort of your street and we'll meeting last year and we look forward to sharing of different either later this year.

Turning to reduction of our opponents luck is tied to inhibitor. We are conducting two clinical phase one be two studies in combination with chemotherapy one with paclitaxel in one of the Carboplatin.

Matthew L. Sherman: At the ASCO 2020 virtual meeting in May, we were highly encouraged by the preliminary data presented by the Endometrial Cancer Co-Work of part two of the ongoing paclitaxel study, which showed an objective response rate of 29% and a clinical benefit rate of 72% at eight weeks. As we announced during our earnings call last quarter, we have also observed more than four responses in the ovarian cancer cohort, which has now advanced to the second stage of the Simon 2-stage design. We look forward to presenting data from the ovarian cancer cohort from Part 2 of the study at the ESMO Virtual Congress in September. In addition, we announced today that we will be presenting data from Part 1 of the study of ribasamide in combination with carboplatin at the Edmo Virtual Congress. We're also happy to confirm that we are on track to file an IND for 3116, a potential first-in-class autophagy inhibitor designed to treat mutant RAS cancers, in the fourth quarter of this year. Finally, I wanted to say a few words on the ongoing COVID-19 pandemic.

At the ASCO 2020 virtual meeting in May we were highly encouraged by the preliminary data presented from endometrial cancer cohort of part two of the ongoing Taco truck study.

But showed an objective response rate of 29 person and the clinical benefit right at 72% at eight weeks.

As we announced during our earnings last quarter. We have also observe more than four responses in the ovarian cancer cohort, which is now advanced the second stage and Simon two stage design.

[laughter] data and the poster presentation from your different cancer co worker part two of the study at the ASML Virtual Congress in September.

In addition, we announced today that we will be presenting data from part one of the study for a definite combination carboplatin.

It's been virtual Congress.

We're also happy to confirm that we're on track to five Oneninety 31, 60 or potential person class a talking to you inhibitor designed to treat new harassed cancers in the fourth quarter of this year.

Finally, I wanted to say a few words on the ongoing.

And then.

Our studies remain open enrollment.

HM continue to receive.

Desiccation drug is going to preserve parliament.

We are committed to supporting our clinical study sites in contract research organizations to help ensure patients received here in a safe manner consistent with regulatory guidance.

Matthew L. Sherman: Our studies remain open for a moment, and patients continue to receive the investigational drug as well as appropriate follow-up. We are committed to supporting our clinical study sites and contract research organizations to help ensure patients receive care in a safe manner, consistent with regulatory guidelines. I will now turn the call over to Tucker Kelly, our Chief Financial Officer, to review the financial results. Tucker?

I will now turn the call over to took a Kelly our chief Financial Officer to review the financial results Tucker.

Thanks, Matt I'd like to review the highlights from our second quarter financial results, which includes our first partial quarter Kinloch product sales.

Total net revenues for the second quarter, 20, 27.1 million, which includes 4.8 million net product sales the catalog and 2.3 million collaboration revenue.

Thomas Patrick Kelly: Thank you. Thanks, Matt. I'd like to review the highlights from our second quarter financial results, which includes our first partial quarter of Kinloch product sales. Total net revenues for the second quarter of 2020 were $7.1 million, which included $4.8 million of net product sales for Kinloch and $2.3 million of collaboration revenue.

We recognize product revenue upon delivery of can lock towards specialty pharmacy distribution partners and the second quarter revenue includes net product sales from our first shipments and maybe following up the approval.

The gross to net adjustment in Q2 was slightly lower than our prior guidance.

Please keep in mind, the gross to net can vary quarter to quarter and we continue to expect the rate to be approximately 15% going forward.

Thomas Patrick Kelly: We recognize product revenue upon delivery of Kinloch to our specialty pharmacy and distribution partners, and the second quarter revenue includes net product sales from our first shipments in May following FDA approval. The growth-to-net adjustment in Q2 was slightly lower than our prior guidance. Please keep in mind that growth to net can vary quarter to quarter, and we continue to expect the rate to be approximately 15% going forward. In addition, we recognize $2.3 million in collaboration revenue under our agreement with Zai Lab, including a $2 million milestone payment due upon their submission of a new drug application to the China National Medical Products Administration, which is predominant for the treatment of adult patients with advanced gastrointestinal stromal tumors. The cost of sales for the three months ended June 30, 2020, was immaterial, as the majority of the manufacturing costs related to the second quarter Kinloch sales were incurred prior to FDA approval and thus were recorded as R&D expense.

In addition, we recognize 2.3 million in collaboration revenue under our agreement was <unk>.

Including a $2 million milestone payment due upon their condition of the new drug application to the China National Medical products administration, who were pregnant for the treatment of adult patients with advanced gastrointestinal stromal tumor.

Cost of sales for the three months ended June Thirtyth 2020, it was immaterial as the majority of the manufacturing costs related to the second quarter Kinloch sales were incurred prior to the FDA approval and thus we recorded as R&D expense.

Cost of sales will not be significant until the initial prelaunch inventories depleted and additional inventories manufactured and sold.

In the second quarter 2020, our total operating expenses, excluding cost of sales were 76 million, which remain consistent expenses of 75.3 million in the first quarter of 2020 as we support our commercial launch of came out as well in advance the clinical development activities across the pipeline.

Research and development expenses were approximately 46.19 and selling general and administrative expenses were approximately 29.9, the second quarter 220.

We expect our operating expenses will increase in the second half of the year compared to the first half of this year as we continue to support clinical development pipeline and the commercial launch.

Thomas Patrick Kelly: Cost of sales will not be significant until the initial pre-launch inventory is depleted and additional inventory is manufactured and sold. In the second quarter of 2020, our total operating expenses, excluding cost of sales, were $76 million, which remained consistent with expenses of $75.3 million in the first quarter of 2020, as we support our commercial launch of Kinloch, as well as advance clinical development activities across the pipeline. Research and development expenses were approximately $46.1 million, and selling, general, and administrative expenses were approximately $29.9 million for the second quarter of 2020.

We ended the second quarter in a strong financial position and remain well capitalized executing the launch of can lock in U.S. and to fund the development of our exciting pipeline of novels, which controlling it matters.

We ended the second quarter with cash cash equivalence in marketable securities, but approximately 632 million, which we expect will be sufficient to fund our operations into the second half of 2022 with that I'll now turn the call back over to Steve.

Thank you Chuck or before we open the call for Q1 day I'd like to take a moment and thank the entire team here at the site for for their impressive focus and hard work over this past quarter looking forward I'm confident we're well positioned to continue to execute successfully both on our Ken lot commercial launch building on the momentum of our first partial quarter of.

Launch that we reported today.

And our remaining promising development programs with that operator, I'd like to open the call for questions.

Thomas Patrick Kelly: We expect our operating expenses to increase in the second half of the year compared to the first half of this year as we continue to support the clinical development of our pipeline and the commercial launch of Kinloch. We ended the second quarter in a strong financial position and remain well capitalized to execute on the launch of Kinloch in the U.S. and to fund the development of our exciting pipeline of novel switch control initiatives. We ended the second quarter with cash, cash equivalents, and marketable securities of approximately $632 million, which we expect will be sufficient to fund our operations into the second half of 2022.

Thank you as a reminder to ask the question you only depressed targeted number one can you tell it sounds to me. It's all your question press the pound Keith.

And your first question.

From the line, it's Chris Raymond from Piper Sandler Your line.

Thanks for taking the question congrats on a on the grade number right out of gate.

Just a couple of questions. Unlike kinloch revenue number I think I heard you say that some of that was stocking, but I don't think I heard you guys quantify that some just kind of curious if you could provide us some sense of end user demand.

Sure Chris. So this is Steve so I'd be happy to take that so yeah. We're really pleased with this initial partial quarter of launch that we've reported today and the strong revenues out of the gate as Dan mentioned in his prepared remarks.

Steven L. Hoerter: With that, I'll now turn the call back over to Steve. Thank you, Tucker. Before we open the call for Q&A, I'd like to take a moment and thank the entire team here at Deciphera for their impressive focus and hard work this past quarter. Looking forward, I'm confident we are well positioned to continue to execute successfully, both on our Kinloch commercial launch, building on the momentum of our first partial quarter of launch that we reported today, and our remaining promising development program. With that, operator, I'd like to open the call for questions. Okay, thank you. As a reminder, to ask a question, you'll need to press the star key, which is number one on your telephone. To withdraw your question, press the pound key.

Which which you may have been able to here I know there have been some technical issues on the line there, but we did note at one of the contributing factors. In addition to strong demand was the usual and customary inventory build to that we saw in this first partial quarter of launch. So we haven't quantified that but we have said that we ended the quarter.

What we expected to see in terms of days on hand tough for inventory.

Okay, and maybe just another question here I think I've seen in previous slides in the way you guys have described the the mix of prescribers between community in academic as being sort of.

Steven L. Hoerter: And your first question. From the line of Chris Raymond, from Piper Chandler. Your line is now open. Thanks for taking the question; congrats on the great number right out of the gate. Just a couple questions. On the Kinloch revenue number, I think I heard you say that some of that was stockpile, but I don't think I heard you guys quantify that, so I'm just kind of curious if you could provide us some sense of end-user demand. Sure, Chris. So this is Steve.

70% academic 30% community, but I think I heard you mentioned that 50% of prescribers for community based.

So I guess on that I mean, it gets is that a surprise teach you guys, especially given that the label is forced line and one would expect that to be maybe even more skewed towards academic.

But maybe a second part of that is.

Are you getting a sense if there's some use in earlier lines in the community.

Steven L. Hoerter: So I'd be happy to take that. So, yeah, we're really pleased with this initial partial quarter of launch that we reported today and the strong revenues out of the gate. As Dan mentioned in his prepared remarks, which you may have been able to hear, I know there have been some technical issues on the line there. But we did note that one of the contributing factors, in addition to strong demand, was the usual and customary inventory build that we saw in this first partial quarter of launch. So we haven't quantified that, but we have said that we ended the quarter with what we expected to see in terms of days on hand for inventory. Maybe just another question here.

Yeah. Thanks, Chris It's a great question, So I'll ask Dan Martin to take both of those questions for you.

Yeah.

I hope you're able to hear me, okay. The audio alright.

Okay, Yes yep.

So apologies for any audio challenges previously so.

Just to clarify the first part of your question academic versus community. So what we said previously is that over all about 70% of just treatment happens in the community setting about 30% on the academic setting out to your point when you look at fourth line. The later you go in line of therapy that.

Switches event as you might expect as patients treatment options dwindle and you know you get more referral to the academic setting. However, we've always thought in the fourth line still probably anywhere from 30% to 40% Oh, yes.

Daniel C. Martin: I think I've seen in previous slides and the way you guys have described the mix of prescribers between community and academic as being sort of 70% academic, 30% community. But I think I heard you mention that 50% of prescribers were community-based. So I guess on that, A, is that a surprise to you guys, especially given that the label is 4th line and one would expect that to be maybe even more skewed towards academic? But maybe a second part of that is, are you getting a sense that there's some use in earlier lines in the community? Yeah, thanks, Chris. It's a great question. So I'll ask Dan Martin to take both of those questions for you. Yeah, and I hope you're able to hear me. Okay. How's the audio?

Treatment, what's happening in the community setting.

And so consistent with that what we just I'm sharing my prepared remarks.

At about 40% of our can lock treated patient volume is coming from the community about 50% of the prescribers.

You can do the math.

The patients per prescribers I'm, a little bit heavier on the academic setting as one would guess so really pretty consistent with what we expected with regard to your second part of your question earlier lines of therapy into good question.

You know, we're really pleased with the wavy.

First partial quarter, that's gone on of course, all of our focus.

Daniel C. Martin: All right. Okay. Yes.

Is on optimizing the launch of can lock in the horrifying. So all of our promotional efforts all materials et cetera are all consistent with our I can't prove indication that said, we recognize that some positions they haven't interest and use it can lock in earlier lines of therapy.

Daniel C. Martin: Yep. So apologies for any audio challenges previously. So just to clarify the first part of your question, academic versus community.

Daniel C. Martin: So, what we said previously is that overall, about 70% of GIST treatment happens in the community setting, about 30% in the academic setting. Now, to your point, when you look at the fourth line, the later you go in the line of therapy, that switches a bit, as you might expect, as patients' treatment options dwindle and you get more referrals to the academic setting. However, we've always thought in the fourth line that probably anywhere from 30% to 40% of GIST treatment was happening in the community setting. And so, consistent with that, what we just shared in my prepared remarks was that about 40% of our Kinloch-treated patient volume is coming from the community. About 50% of the prescribers, which, you know, you can do the math, and, you know, the patients per prescriber are a little bit heavier in the academic setting, as one would guess, so really pretty consistent with what we expected. With regard to your second part of your question, earlier lines of therapy, it's a good question. We're really pleased with the way the first partial quarter has gone. Of course, all of our focus is on optimizing the launch of Kinloch on the fourth line.

You know, it's really challenging to estimate the proportion of patients who may be receiving treatment in earlier lines that data sources that are available on perfect and often don't provide a very clear or reliable picture. So at this time I'm still very early launch it's really.

Difficult for us to determine how much use if any was off label.

Okay. Thanks very much.

Oh.

Thank you for next question.

From the line if you in yet from Jefferies. Your line is that okay.

Thanks, very much so on the phone ASCII again about the.

A second point of sales are still consensus wasn't less than a million and then you came at four point Hey, So can you talk about how much of.

Your sales actually benefited from.

Inventory.

And your as you know.

Good day expanded the patients or something to commercial.

Yes units, it's Steve here, so Dan covered some of that in his prepared remarks, but Dan maybe you could provide units a little bit more color in terms of factors that contributed to the strong performance in this first partial quarter.

Daniel C. Martin: So all of our promotional efforts, all of our materials, et cetera, are all consistent with our FDA-approved indication. That said, we recognize that some physicians may have an interest in using Kinloch in earlier lines of therapy. You know, it's really challenging to estimate the proportion of patients who may be receiving treatment in earlier lines. The data sources that are available are imperfect and often don't provide a very clear or reliable picture. So, you know, at this time, still very early in the launch, it's really difficult for us to determine how much use, if any, was off label. Great, thanks very much. Thank you for your next question. From the line of Eun Yang, from Jeffers, your line is now... Well, thanks very much. So I just want to ask you again about the... The second quarter sales, the consensus was less than a million, and then you came in at 4.8.

Yeah, absolutely. Thanks, Steve Good question. So again I, it's really important I think I want to reiterate that.

There were a number of factors that we think contributed to our initial strong result, and primarily that's strong opposition demand for can lock also really encouraging on prescriber breadth and diversity and importantly, very rapid gains onshore brought patient access. So those are the primary driver.

[laughter]. Additionally, I'm just to provide some additional color.

We outline in my prepared remarks that there was some contribution in the Q2 revenue from conversion of U.S. patients from our expanded access program to commercial product, we have not given specific details on our EAP, what I can't say, it's not programming.

This is now closed as is typical upon FDA approval.

And then as it relates to inventory build what are what we can share is that.

Yeah.

Typical for any oral oncology launching a first partial quarter to have some contribution of revenues.

Steven L. Hoerter: So, can you talk about how much of, uh, um... Your sales actually benefited from inventory, as well as, you know, the expanded patients are switching to commercial. Yes, Eun, it's Steve here.

Even initial inventory however, as Steve mentioned.

And it's answered your prior question team did a great job managing inventories around the corner and the inventory help our channel partners was very consistent with our days enhance days on hand targets and we would expect the contribution or the impact of that initial inventory build to diminish in subsequent quarters.

Daniel C. Martin: So Dan covered some of that in his prepared remarks, but Dan, maybe you could provide Eun with a little bit more color in terms of factors that contributed to the strong performance in this first partial quarter. Yeah, absolutely. Thanks, Steve. That's a good question. So, again, it's really important, I think, I want to reiterate that there were a number of factors that we think contributed to our initial strong result. And primarily, that was strong physician demand for Kinloch, also really encouraging prescriber breadth and diversity, and importantly, very rapid gains toward broad patient access. So those are the primary drivers.

Thank you and you actually seeing a 10 luck you see as you know really online earlier lines down four for line.

Yes, Dan would you like to address that question.

Sure Yeah. We know this is certainly in their interest, but as I mentioned.

The prior questions My answer the prior question.

You know first and foremost we.

Just on the fourth line launch and all of our promotional efforts are are not toward that.

Daniel C. Martin: Additionally, just to reiterate, we outlined in my prepared remarks that there was some contribution to Q2 revenue from conversion of U.S. patients from our expanded access program to commercial product. However, we have not given specific details on our EAP. What I can say is that the program in the U.S. is now closed, as it is typical upon FDA approval. And then as it relates to inventory build, what we can share is that, you know, it's typical for any oral oncology launch in the first partial quarter to have some contribution of revenue. The team did a great job managing inventory throughout the quarter, and the inventory held by our channel partners was very consistent with our days on hand target. And we would expect the contribution or the impact of that initial inventory bill to diminish in subsequent Thank you. And have you actually seen tin-locked usage in earlier lines than 4-4-Line?

We recognize it some physicians may have interest and using can lock in earlier lines of therapy.

In fact remains a challenging to estimate, especially in its early on and launch what proportion of patients maybe receiving treatment in earlier lines. If any because the data sources are just getting perfect to do that and often don't provide a clear.

I have a picture so at this time just difficult for us to determine how much you if any.

Earlier lines of therapy.

And I haven't asked the question. So you know repression baby in the past the Youre looking at other installed is a tumors Cleveland tumors.

In the specialty expansion cohort. So you did any update on what types of a tumor as you may pursue.

Yeah, you're gonna see thanks for the question. So Mad reference in his prepared remarks that we were really pleased to see some of the phase one data the accepted as a mini oral presentation coming up at ESMO. So this is the just cohorts from the phase one as you noted there are a number of other expansion cohorts the signal seeking.

Daniel C. Martin: Yeah, Dan, would you like to address that question? Sure, you know, we know this is certainly an area of interest, but as I mentioned in my answer to the prior question, first and foremost, we are focused on the fourth line launch, and all of our promotional efforts are toward that. We recognize that some physicians may have an interest in using Kinloch in earlier lines of therapy.

Cohorts that we had as part of the phase one and we don't have a further update for you at this time on todays call.

Thank you.

Next question.

From the line if Peter in Washington from Barclays. Your line is not one thing.

Hi, Thanks for taking my questions on just the TGC key dates in for Q.

Daniel C. Martin: The fact remains, it's challenging to estimate, especially this early on in the launch, what proportion of patients may be receiving treatment in earlier lines, if any, because the data sources are just imperfect to do that and often don't provide a clear or reliable picture. So at this time, it's just difficult for us to determine how much use, if any, there is in earlier lines of therapy.

What should we expect to see a number of patients.

Any metrics, we should be thinking about for that thesis.

Hey, Peter it's Steve So maybe I'll start off a answering that and then Matt a please feel free to add some additional color to that so as Matt noted in his prepared remarks.

We have a couple of milestones important milestones coming up for the 30 14 program for the balance of the year. One of those is to declare a recommended phase two dose the others to open an expansion cohort in patients with TGC tea and then as Pat as a as Matt noted, we also intend to provide data from the phase.

Steven L. Hoerter: So, you know, Repratinib in the past, you are looking at other solid tumors, kit-driven tumors in the expansion cohort. So is there any update on what types of tumors you may pursue? Yeah, Yonit, Steve, thanks for the question.

He is one at a medical meeting coming up in the fourth quarter of the year.

Steven L. Hoerter: So Matt referenced in his prepared remarks that we were really pleased to see some of the Phase I data be accepted as a mini oral presentation coming up at ESMO. So this is the GIST cohorts from phase I. As you noted, there are a number of other expansion cohorts, signal-seeking cohorts that we had as part of Phase I, and we don't have a further update for you at this time on today's call. Thank you. Next question. From the line is Peter Lawson, from Barclays. Your line is now open.

So I think we haven't guided specifically to a number of patients that you can expect us to date on as you know at sea toss last year, we reported initial clinical proof of concepts in the first three patients that we are treated so we'll have data updates on some of those patients and of course additional patients but.

For us to specify at this time exactly what number to expect but of course, but what we're going to be looking for as we as we go through the data and accumulate. The data is you know what does the optimal dose going forward, how does that compare at an early data with what we see from the other approved agent, Texas gardening.

Steven L. Hoerter: Hi, thanks for taking my questions. Just on the PGTT data in 4Q, what should we expect to see a number of patients? Any metrics we should be thinking about for that data? Hey, Peter. It's Steve.

For this disease for TG Siti.

So stay tune a job is worth more to come at the end of the year. Thanks Peter.

Thanks, much and then just an update on how things are moving to ask them. When we could see the next day. So just any updated thoughts around systemic messages.

Steven L. Hoerter: So maybe I'll start off answering that, and then, Matt, please feel free to add some additional color to that. So, as Matt noted in his prepared remarks, we have a couple of milestones, important milestones, coming up for the 3014 Program for the Balance of the Year. One of those is to declare a recommended Phase II dose.

Sure So guys happy to address that so somewhat similar I think to units question earlier, you know that noted in his prepared remarks that we will have data at ESMO from the just a expansion cohorts from the phase one.

Steven L. Hoerter: The other is to open an expansion cohort in patients with TGCT. And then, as Matt noted, we also intend to present data from the Phase I medical meeting coming up in the fourth quarter of the year. So I think we haven't guided specifically to a number of patients that you can expect to see data on. As you know, at CTOS last year, we reported initial clinical proof of concept in the first three patients that we had treated. So we'll have data updates on some of those patients and, of course, additional patients, but it's tough for us to specify at this time exactly what number to expect. But of course, what we're going to be looking for as we go through the data and accumulate the data is, you know, what is the optimal dose going forward. How does that compare in early data with what we see from the other approved agent, pexidartanib, for this disease, for TGCT? So stay tuned for more to come at the end of the year. Thanks, Peter. Perfect. Thank you so much.

So for the first time, we're gonna be reporting on the subset of patients that dose escalated to 150 be idea in that study. So we'll be reporting on the PFS. One so the initial interval that progression free survival for those patients and then upon dose escalation. We then captured PFS too. So we'll then also report.

That subset the PFS two data support on today's call I don't have any further update in terms of the other expansion cohorts. So from the phase one.

Okay. Thanks, much thanks for taking the questions.

Thank you for your next question.

The line, it's Michael Smith from Guggenheim Your line is helping.

Hey, guys. Thanks for taking my questions and congrats on the launch as well from me maybe a question around.

They've dynamics and just you know catalog, obviously benefits from a broad label that doesn't specify a.

Certain Gino type, but you know there is obviously overlap to some degree with with Eva Kid I was just wondering.

Steven L. Hoerter: And then just an update on how things are moving for ASM and when we could see the next data, just any updated thoughts around systemic. Sure, so happy to address that. So somewhat similar, I think, to Eun's question earlier, Matt noted in his prepared remarks that we will have data at ESMO from the GIST expansion cohorts from phase one. So for the first time, we're going to be reporting on the subset of patients that dose escalated to 150 BID in that study. So we'll be reporting on PFS1, so the initial interval of progression-free survival for those patients. And then upon dose escalation, we then captured PFS2.

If you could comment on you know what do you see in terms of PD chip are off of a de aid for to be positive patients that might have.

Been treated with could knock in the in the second quarter and how you see the a competitive dynamic to lobbing that.

Yeah. Thanks, Michael So it's Steve maybe I'll start off and then turn it over to to Dan as well, who can comment on what we've seen a in the second quarter and also what we've seen in the extensive market research that we've done, but maybe just a T that up a little bit you know, we've we've talked for a number of months now you know probably starting back at the.

JP Morgan conference in January about the market research that we had done based on the Invictus data and with that target product profile getting reactions from physicians to the profile as they evaluate the treatment options for their patients with gastrointestinal stromal chamber and what we've heard very consistently.

Steven L. Hoerter: So we'll also report for that subset the PFS2 data. So on today's call, I don't have any further update in terms of the other expansion cohorts from phase one. Okay, thank you so much.

Steven L. Hoerter: Thanks for taking the question. Thank you for your next question. From the line of Michael Schmidt from Guggenheim, your line is now open.

With those randomized data in a broad spectrum of patients so irrespective of mutational status.

Steven L. Hoerter: Hey guys, thanks for taking my questions and congrats on the launch as well for me. Maybe a question around competitive dynamics and just, you know, Kinloch obviously benefits from a broad label that doesn't specify certain genotypes, although there is obviously overlap to some degree with Ava kit. I was just wondering if you could comment on, you know, what you see in terms of PDGFR-alpha, D842B positive patients that might have been treated with Quidnoc in the second quarter and how you see the competitive dynamics evolving there. Yeah, thanks, Michael.

That physicians really value a the fact that we have randomized data.

But beat the fact that we did the drug offers based on Invictus, such a striking benefit in terms of progression free survival and also a clinically meaningful improvement in overall survival and all of that against a backdrop drop of what does a very well tolerated drugs. So our expectation based on the data is that can lock or a present.

It really has the potential to be best in class for this disease based on the Invictus data now as you point out in a competitive marketplace, where there's one other a recently approved agent with Eva printing to.

Steven L. Hoerter: So it's Steve, maybe I'll start off and then turn it over to Dan as well, who can comment on what we've seen in the second quarter, and also what we've seen in the extensive market research that we've done. But maybe just to tee that up a little bit, you know, we've talked for a number of months now, you know, probably starting back at the J.P. Morgan conference in January about the market research that we've done based on the Invictus data and with that target product profile, getting reactions from physicians to the profile as they evaluate, you know, the treatment options for their patients with gastrointestinal stromal tumor. And what we've heard very consistently is with those randomized data in a broad spectrum of patients, so irrespective of mutational status, that physicians really value, A, the fact that we have randomized data, but B, the fact that the drug offers, based on Invictus, such a striking benefit in terms of progression-free survival and also a clinically meaningful improvement in overall survival, and all of that against a backdrop of what is a very well-tolerated drug.

With a narrow label as you point out on for the Exxon 18, driven part of the disease. You know I think what physicians are now internalizing is that the negative Voyager trial that reported out a couple of months ago.

And what that means for them as they think about options for patients certainly puts that the data from an victus in context, but Dan maybe you want that comment further on what we're seeing and hearing in terms of this subset of patients that has excellent 18 driven disease.

Sure.

Just a couple of thoughts.

Parts of the question I mean, the only thing that I would add too.

'cause sees answer as it relates to profiles, we continue to research and we've been doing research now that were relaunched in what comes back consistently is just very very strong.

Positives for the can walk profile and one of that means that I've been pleased to see is that just treaters are increasingly understanding how kilmarnock is differentiated from other products in the space.

Adding even print it's much more narrow profile as Steve just pointed to as it relates to PDGF or alpha.

One of the things that we're really fortunate to have as it is a very broad indication and so all of the payer policies that were seeing going into place they are.

Steven L. Hoerter: So our expectation, based on the data, is that Kenlock or Repretnib really has the potential to be best-in-class for this disease, based on the Invictus data. Now, as you point out, in a competitive marketplace where there is one other recently-approved agent with avipretinib, with a narrow label, as you point out, for the exon-18-driven part of the disease, you know, I think what physicians are now internalizing is the negative Voyager trial that reported out a couple of months ago, and what that means for them as they think about options for patients certainly puts the data from In But Dan, maybe you want to comment further on what we're seeing and hearing in terms of this subset of patients that have an exon-18-driven disease. Sure. Just a couple of thoughts on both parts of the question.

I'll stick Commutations and so we don't there's no reason for us it really collect track.

Data on the mutation profile cannot treat patients because you know it's not going were strong. So we've always viewed can lock as Steve mentioned a best in class.

Actually standard of care products in the person that upsetting.

And Ah that it's inclusive of patients of all mutation types, including while time for that.

Okay. Great. Thanks, then a question on.

D.C. seats Liberty 14, I know you talked about that phase one update later this year I was just wondering how we should think about the potential development path forward beyond the term and TCT should we think about a you know maybe a single arm approval strategy.

Daniel C. Martin: I mean, the only thing that I would add to, To see the answer as it relates to the profiles, you know, we continue to do research, and we've been doing research now that we're launched, and what comes back consistently is just, you know, very, very strong positives for the Kinloch profile. And, you know, one of the things that I've been pleased to see is that GIST patients are increasingly understanding how Kinloch is differentiated from other products in the space, including Ava Pritnick's much more narrow profile, as Steve just pointed out. As it relates to PDGFR-alpha, you know, one of the things that we're really fortunate to have is a very broad indication. And so all of the payer policies that we're seeing going into place are agnostic to mutation.

She here based on a another phase one be dose expansion cohort and I guess what.

You know I guess, what but do you what what the regulatory bar be here do you need to I guess exceed actually starting to for example, or.

What I'm what level of efficacy would you give confidence for example that you could went in a randomized controlled study just maybe just some high level thoughts on the path to market here longer term.

Yeah. Thanks, Michael So that's a good question, Matt, which we'd like to take that.

Sure. Thanks, Steven This is Matt. Thanks, Michael can you hear me, Okay, I just want to make sure the audio is coming through clearly.

Daniel C. Martin: And so we don't, there's no reason for us to really collect or track data on, you know, the mutational profile of Kinloch-treated patients because, you know, it's an all-commerce drug. So we've always viewed Kinloch as, as Steve mentioned, the best in class and, you know, potentially a standard of care product in the post-samantib setting. And that it's inclusive of patients of all mutation types, including wild types. Okay, great, thanks. Then a question on... DCC 3014. I know you talked about the Phase 1 update later this year. I was just wondering how we should think about the potential development path forward longer term in TGCT. Should we think about, you know, maybe a single-arm approval strategy here based on the Phase 1B dose expansion cohort? And, I guess, what, you know, I guess, what the regulatory bar be here? Do you need to, I guess, exceed PEXI DARTNIV, for example?

Yes, I'm trouble earlier wouldn't storm testing overhead.

Yes, that's right very good question wanted to start with saying you know we look forward to the updates of into this year as we said, we'll be able to I'm talking about the recommended phase two dose initiation of an expansion cohort and also to update folks a medical meeting the fourth quarter. This year.

For further data in the TGC t. patients.

The ongoing phase one study.

We think about further development, we can use as a benchmark the Texas are developing a when it was approved last year and August by the FDA and you know at that time, you know they conducted I'm talking 20 patients study randomized one to one can see though and based on objective response rate at week 25.

38, 39%.

Yeah, we're able to receive full approval. Despite also having a pretty significant safety profile with a black box warning on the label and the requirement for a rems program for patient enrollment onto onto treatment. So you know using that sort of as it as a benchmark for development, Yeah, We think with no secret drug.

So you know potentially or 30 14 has the ability.

For approval in TGC team not patients.

So it should be noted that the CHF P had a negative opinion for for Peck, starting that and the in the U.S. So again speaks to the safety profile that was shown with pets.

Matthew L. Sherman: Or, you know, what level of efficacy would you give confidence in, for example, that you could win in a randomized trial? Yeah, thanks, Michael. So it's a good question. Matt, would you like to take that?

Okay, Okay, great well, thanks for taking my questions and congrats meloxicam.

Yeah. Thanks, Michael.

Thank you Sir your next question.

Matthew L. Sherman: Sure. Thanks, Steve. And this is Matt.

From the wine is throbbing, Craig Nascars from trees to your line is now.

Matthew L. Sherman: Thanks, Michael. Can you hear me okay? I just want to make sure the audio is coming through clearly.

Hi, This is nickel on for Robin from try securities. Thanks for taking your questions on really spending can you remind us that Simeon o'fallon Lucky overlapping Ken and page.

Matthew L. Sherman: Again, we had some trouble earlier with the storm passing overhead. Yeah, so it's a very good question. Let me just start by saying, you know, we look forward to the updates at the end of this year. As we said, we'll be able to talk about a recommended phase two dose, the initiation of an expansion cohort, and also to update folks at a medical meeting in the fourth quarter of this year with further data from TGCT patients in the ongoing phase one study. But if we think about further development, we can use as a benchmark the Texan Partnip development when it was approved last year in August by the FDA. And, you know, at that time, they conducted 120 patient studies, randomized one-to-one to placebo.

Often used in between.

Yeah.

And then I'm not sure if I Miss but.

How many prescriptions filled or how many patients are seen truck.

Corridor.

Yeah, Hi, Nicole its Steve Thanks for the question. So maybe I'll take the second question first and then I'll just ask Matt if he'd like to.

Roughly outline the spectrum of activity of repression of relative to Sunitinib based on what we've talked previously published in cancer cell for example last year.

But but specifically for this question about number of scripts and number of patients. So we haven't disclosed that on today's call. That's not one of the launch metrics that we'll be sharing externally on that on a quarterly basis, but as Dan said in his prepared remarks, and then in response to the questions that have come up so far.

Matthew L. Sherman: And based on the objective response rate at week 25 of 38, 39 percent, you know, were able to receive full approval despite also having a pretty significant safety profile with a black box warning on the label and the requirement for a REMS program for patient enrollment onto treatment. So, you know, using that sort of as a benchmark for development, we think with, you know, a safer drug, potentially 3014 has the ability to be approved in TGCT patients. It should also be noted that the CHMP had a negative opinion for Pexidartanib in the EU.

Certainly we're very very pleased with the launch it's a reflection of strong demand, which spans not only ER physicians and patients being treated and the academic setting, but also very importantly, we believe.

The the use of the drug in the community setting, it's a real a indicator that we're following very closely.

We're very pleased to see the breadth of utilization so far so Matt do you want to take that first question.

Matthew L. Sherman: So, again, this speaks to the safety profile that was shown with Pexidartanib. Okay, great. Well, thanks for taking my questions and congrats, Milan. Yeah, thanks, Mike.

Sure. So yes. So the question as I understand as you know speaking about the activity reporting that the second line setting like compared to historical data or Sunitinib, which is approved now for the second line. So we did present at the Triple meeting last year. The data from the Phase one study, where we want to cross selling.

Nicole: Thank you for your next question. From the line of Robin Karnoskis from Trist, your line is now: Hi, this is Nicole on behalf of Robin from True Securities. Thanks for taking our questions. So really quickly, can you remind us of the immune profile and what the overlap is in PNG, GFR, and alpha-mutants between reputinib and sunitinib?

For the two patients, but in second line third line than fourth line patients and so.

Only down in the second line patients, we had a progression free survival.

Good 0.7 months in that study with a 19% objective response rate.

Steven L. Hoerter: And then also, I'm not sure if I missed this, but how many prescriptions were filled or how many patients received the drug in the second quarter? Yeah. Hi Nicole. It's Steve.

And so while its cross study comparisons sunitinib in its pivotal study had about a 5.6 month progression free survival with a 7% objective response rate.

Steven L. Hoerter: Thanks for the question. So maybe I'll take the second question first, and then I'll just ask Matt if he'd like to briefly outline the spectrum of activity of repretinib relative to sunitinib based on what we've previously published in Cancer Cell, for example, last year. But specifically, this question about the number of scripts and the number of patients, so we haven't disclosed that on today's call. That's not one of the launch metrics that we'll be sharing externally on a quarterly basis. But, as Dan said in his prepared remarks and then in response to the questions that have come up so far, certainly, we're very pleased with the launch. It's a reflection of strong demand, which spans not only physicians and patients being treated in the academic setting but, very importantly, we believe, the use of the drug in the community setting.

So that gave us the reason to believe we're initiating the and treat study as you know the treat study is our randomized phase three study comparing recruiting it.

To sum it up.

And as we've highlighted today as well to earn tracts completing enrollment.

That study by the end of this year.

Great. Thanks, so much.

Thanks for your next question from the line if Ren Benjamin from JMP Securities. Your line is open.

Hey, good afternoon, guys. Thanks for taking the questions and congratulations on a great start to a launch maybe my first question.

Little bit having to do the broad kind of ex U.S. strategy.

See you know you you've got approvals in several come in several.

Oh, you know kind of just your distributor base I'm sort of delivery in those countries. You now have China. The being accepted can you just kind of take us through your your latest thoughts on how you know the timing of when you think these revenues from the ex U.S.

Yes.

Steven L. Hoerter: So that's a real indicator that we're following very closely, and we're very pleased to see the breadth of utilization so far. So Matt, do you want to take that first question?

Launch may start contributing to your p. it out and how you see that unfolding.

Yeah, I rented Steve. Thanks for the question you broke up a little bit, but I think I got the just a question in terms of ex us strategy and timing for any future potential revenues.

Matthew L. Sherman: Sure. So, yeah, so the question, as I understand it, is speaking about the activity of RepRITinib in a second-line setting, like compared to the historical data for SUDIMITinib, which is approved now for the second line. So, you know, we did present at the TRIPLE meeting last year the data from the Phase I study, where we looked across 142 patients in second-line, third-line, and fourth-line patients. And so, drilling down on the second-line patients, we had a progression-free survival of 10.7 months in that study, with a 19 percent objective response rate. And while it's a cross-study comparison, Sunitinib in its pivotal study had about a 5.6-month progression-free survival with a 7% objective response rate.

So first maybe we can just a broad strokes kinda talk about where we are globally in terms of our regulatory strategy. Obviously approved here in the U.S. excited about the early days of the launch and looking forward to up to continuing ticket and educate physicians about can lock or prednisone as we as we drive further utilization of the brand here in the U.S.

No as we've noted previously we now have of course approval in Canada and Australia. This was part of project Orbis as you know ran and as we've talked about previously our strategy and those two territories, specifically, it's very likely to be a distributor approach, where we retain rights to the products, but we.

We partner with the local distributor that's able to help navigate the pricing and reimbursement process and then of course.

Matthew L. Sherman: So that gave us the reason to believe in initiating the Intrigue Study. As you know, the Intrigue Study is our randomized phase three study comparing Reprinted to Sumitneb, and as we highlighted today as well, we're on track to completing enrollment in that study by the end of this year, which will be great. Thanks so much.

The product to patients physically and also you know engage with physicians and share with physicians the data to support the product both of those territories for both Australia, and Canada, there can be a somewhat lengthy pricing and reimbursement process. So these are territories that are that are very different.

Daniel C. Martin: Thank you for your next question from the line of Ren Benjamin from JMP Securities. Your line is now: Hey, good afternoon, guys. Thanks for taking the questions. And congratulations on a great start to the launch. Maybe my first question, a little bit having to do with the broad kind of ex-US strategy. Steve, you know, you've got approvals for several, in several Transcripts provided by Transcription Outsourcing, LLC. Yeah, Ren, it's Steve.

From what we experienced here in the U.S., where we price a product and then launch it immediately.

It's educating and working with insurance companies, but in these other single payer market. So there was quite a bit of negotiation and work that has to be done and submitting data to H.T.A. bodies, and then getting a price approval. So difficult from where we are now rented project when we might see revenues from those.

Steven L. Hoerter: Thanks for the question. You broke up a little bit, but I think I got the gist of the question in terms of the ex-U.S. strategy and timing for any future potential revenues. So first, maybe we can just broadly talk about where we are globally in terms of our regulatory strategy. We're obviously approved here in the U.S., excited about the early days of the launch, and looking forward to continuing to get out and educate physicians about Kenlock and Repretnib as we drive further utilization of the brand here in the U.S. As we've noted previously, we now have, of course, approval in Canada and in Australia. This was part of Project Orbis, as you know, Ren. And as we've talked about previously, our strategy in those two territories specifically is very likely to be a distributor approach, where we retain rights to the product but we partner with a local distributor that's able to help navigate the pricing and reimbursement process and then, of course, get the product to patients physically and also engage with physicians and share with physicians the data to support the product. In both of those So these are territories that are very different from what we experience here in the US, where we price a product and then launch it immediately.

Territories, it's certainly at some point to further off in the future now with respect to China.

As we noted today the the applications submitted Buyside lab, who is our partner for greater China.

They they anticipate they receive priority review as we disclosed today and as they disclose this morning, and and they believe that the timeline for a potential approval could be about 12 months I think that was their experience with the jewelry. Unlike the system here in the U.S. there isn't a prescribed.

Action date by which time D.N.P.A. has to take action on the application. So there is some uncertainty in terms of when they may take action.

And then when when of course as I'd than would be able to start commercializing can lock in China specifically.

Now as Matt also noted and we noted in the press release. The next significant regulatory milestone for us is going to be filing the marketing authorization application to the European medicines agency and we further refined our guidance today to say that we'll be making that filing in quarter four.

So one of the things we haven't disclosed yet is what our go to market strategy is going to beat for Europe, and so as we get closer to that filing and at the right time, then we'll disclose exactly what our go to market approach is going to be for the European Union.

Steven L. Hoerter: You know, of course, educating and working with insurance companies, but in these other single payer markets, there's quite a bit of negotiation and work that has to be done in submitting data to HTA bodies and then getting a price approval. So difficult from where we are now, Ren, to project when we might see revenues from those territories. It's certainly at some point further off in the future. Now with respect to China.

Got it that's very helpful. And then just maybe switching gears to 3116, I know you'll be filing the idea, but can you maybe just give us a little bit more color, how we should be thinking about this asset and how we should be thinking about.

The development of this asset going forward should we be focusing on particular tumor.

Steven L. Hoerter: As we noted today, the application submitted by Xi Lab, who is our partner for Greater China, they anticipate that they will receive priority review, as we disclosed today and as they disclosed this morning, and they believe that the timeline for a potential approval could be about 12 months. I think that was their experience with Zajula.

Oh model or.

Any sort of color you could share.

Sure. So maybe I'll start off and then I'll turn it over to Matt. So we're really excited about 31 16. This is no our potential first in class bulk inhibitor targeting the autophagy pathway, which we know is an escape pathway for a mute and Ras cancers.

And as you know we plan to file that I N D. Before the end of the year for that program, making as the next program coming out of our research organization, but not maybe you want to offer some additional color on how you're viewing the potential development path for 31 16.

Steven L. Hoerter: Unlike the system here in the U.S., there isn't a prescribed action date by which time the NMPA has to take action on the application. So there is some uncertainty in terms of when they may take action and then when, of course, Xi would then be able to start commercializing Kinloch in China specifically. Now, as Matt also noted and we noted in the press release, the next significant regulatory milestone for us is going to be filing the marketing authorization application with the European Medicines Agency. And we further refined our guidance today to say that we'll be making that filing in quarter four. So one of the things we haven't disclosed yet is what our go-to-market strategy is going to be for Europe.

Thanks, Steve So yes, so as we indicated today, we're very excited about the opportunity to develop 31 16, as well oak inhibitor in person class inhibitor of tough Angie.

The development path of this as we indicated would be in the.

I think if you can rest cancers and mutant kras, Kansas represent approximately 30% of all human cancers, and particularly represented in pancreatic cancers affiliate Attractable cancer.

By many targeted therapies as both significant number of patients with lung cancer and additional pieces the colorectal cancer.

Steven L. Hoerter: And so, as we get closer to that filing and at the right time, then we'll disclose exactly what our go-to-market approach is going to be for the European Union. And then maybe switching gears to 3116, I know you'll be filing the IND, but can you maybe just give us a little bit more color on how we should be thinking about this asset and how we should be thinking about the development of this asset going forward? Should we be focusing on particular tumor cases? NASA Model or any sort of color you could think of.

So if you think about the development there would be potentially those indications and.

We look for it to share more details once we further up once we moved further along.

With the R&D funding.

Perfect. Thanks for taking the questions and congratulations.

Yeah. Thanks Ryan.

Thank you Sir your next question.

From the line, it's Andrew Marins from Ass Libi Leerink. Your line is open.

Hi, Thanks, Congrats on the results for the quarter.

Steven L. Hoerter: Sure, so maybe I'll start off and then I'll turn it over to Matt. So we're really excited about 3116. This is, you know, our potential first-in-class ULK inhibitor targeting the autophagy pathway, which we know is an escape pathway for mutant RAS cancers.

Some of the topics you want to address them with a power outage try to go back.

I was wondering if you guys are getting patients that have failed suit.

But not drugs Margaret.

And then also just werent boats going to color on whether or not you seen I'm a warehouse of patients that were waiting on Bob will show strong.

Steven L. Hoerter: And as you know, we plan to file an IND before the end of the year for that program, making it the next program coming out of our research organization. But Matt, maybe you want to offer some additional color on how you're viewing the potential. Thanks, Steve. So yeah, as we indicated today, and we're very excited about the opportunity to develop 3116 as the bulk inhibitor and first-in-class inhibitor of autophagy. The development path of this, as we indicated, would be in the setting of mutant RAS cancers, and mutant RAS cancers represent approximately 30% of all human cancers, and are particularly represented in pancreatic cancer, so a fairly intractable cancer by many targeted therapies, as well as a significant number of patients with lung cancer and additional patients with colorectal cancer.

Yes, Thanks, Sandeep that both really good questions I'll stand Martin if he'd like to address those [noise].

Yes, absolutely I think sandy appreciate the questions. So.

First question was about earlier lung patients.

So.

We are laser focused of course on.

Promoting a drug and optimize the launching fourth line.

So all of our efforts in materials and messaging and whatnot are of course.

On label before line indication.

That being said, we do appreciate that there maybe some physicians who may have some interesting using can lock in earlier lines of therapy. However, it's it's really challenging to estimate the proportion of patients who may be receiving treatment in earlier lines data sources available just you know there in perfect and often.

Oh provided clear reliable picture. So it's still certainly early days and at this time, it's difficult for us to determine how much you should any is is off label.

Matthew L. Sherman: So if you think about the development, it would potentially have those indications. And we look forward to sharing more details once we move further along with the IND filing. Thanks for taking the questions and congratulations. Yeah, thanks, Ron. Thank you for your next question. From the line of Andrew Berens from SVB Glaring, your line is now open.

Regarding your question about.

And whether or not there was sort of a bolus of prevalent patients on another good question.

You know we've communicated previously that we did not expect there to be a significant bolus of prevalent patients.

In this setting given how late line setting is how six some of these patients are.

Andrew Scott Berens: Hi, thanks, and congratulations on the results for the quarter. I'm sorry if I asked some of the topics you already addressed. We had a power outage, and I had to dial back in.

And frankly again on the quite early days tough to assess what I would say is that we are thrilled with the early experience can lock in the marketplace prescriber demand and breadth and diversity.

Andrew Scott Berens: I was wondering if you guys are getting patients that have failed SUTN but not gotten Stavarger yet. And then also, just wanted to get a color on whether or not you're seeing a warehouse of patients that are awaiting a novel drug. Yeah, thanks, Andy. Both really good questions.

Scriver so.

I'm really pleased with that and we did mention also.

I don't know if you've heard it before giving them the power outage experienced but we did also mentioned that a couple other.

Factors contributed to the Q2 revenue one was a modest impact of conversion of U.S. patients in our expanded access program to a commercial drug another was consistent with any oral oncology launch.

Daniel C. Martin: I'll ask Dan Martin if he'd like to address those. Yes, absolutely. Thanks, Andy.

Daniel C. Martin: I appreciate the questions. So the first question was about earlier line patients. So, you know, we are laser focused, of course, on promoting the drug and optimizing the launch in fourth line. So all of our efforts and materials and messaging and whatnot are, of course, on label with a fourth line indication. That being said, we do appreciate that there may be some physicians who may have some interest in using Kinloch in earlier lines of therapy. However, it's really challenging to estimate the proportion of patients who may be receiving treatment in earlier lines. The data sources available, you know, they're imperfect and often don't provide a clear or reliable picture.

Particularly one with a partial first quarter a inventory initial inventory build so impact of initial inventory build and then thirdly, a lower than anticipated utilization of our patient assistance programs.

We had previously estimated 20% to 30% came in a bit lower than that but we continue to expect that.

Estimate to hold true moving for.

Okay I appreciate all the color and then I think Peter a you guys about a U.S.M. David <unk> over Q on call. You said he presented by year end or are you still planning to present, what I wasn't really clear under your answer though.

Daniel C. Martin: So, you know, it's still certainly early days, and at this time, it's difficult for us to determine how much use, if any, is off-label. Regarding your question about whether or not there was sort of a bolus of prevalent patients, Another good question, you know; we've communicated previously that we did not expect there to be a significant bolus of prevalent patients in this setting given how late-line the setting is, how sick some of these patients are, and, you know, frankly, again, being quite early days, you know, tough to assess. But what I would say is that we are thrilled with the early experience of Kinloch in the marketplace, the prescriber demand, and breadth And we did mention that also... I don't know if you've heard that before, given the power outage experience.

Sure. Thanks, Thanks for the question Andy So what I noted in my response to Peter's question is that we have some data from the phase one as Matt noted from the just cohorts that has been accepted as a mini oral presentation at ESMO. So this is looking at the patients who dose escalated to 150 B.I.D. and looking.

And yet PFS, one as well as PFS two for that cohort. So we don't have on todays call any further update with respect to other cohorts from the phase one.

Okay.

That's cohorts, so enrolling or what's the status of it.

Yeah, we don't have any any further to update you know at this time on the cohort as we've talked about previously this has been a cohort for us that has been really challenging to enroll as you know from last year, we talked about how we amended the protocol to start to treat patients had 150 be I'd.

Daniel C. Martin: But we did also mention that a couple other factors contributed to Q2 revenue. One was the modest impact of conversion of U.S. patients in our expanded access program to a commercial drug. Another was consistent with any oral oncology launch, particularly one with a partial first quarter, an initial inventory build, so the impact of the initial inventory build, and then thirdly, lower than anticipated utilization of our patient assistance program. We had previously estimated 20 to 30% came in, a bit lower than that, but we continue to expect that estimate to hold true moving forward. Okay, I appreciate all the color.

It's been a you know a tough going for us. So we don't have any at this time any further update for you on that cohort.

Okay.

Alright, thanks for the questions appreciate and congrats again.

Thanks, Andy.

Thank you for next question.

From the line. This is Ben Shim from Canaccord. Your line is there okay.

Hi, Thanks for taking my question and congratulations on launch this quarter.

A couple of company separately marks the that the virtual formats of some of these medical meetings like Gasco has made it hard for the company to get the word out.

For product launches and I'm, just wondering if you agree with that and maybe if you could rank order some of the challenges that you might see out there.

Andrew Scott Berens: And then I think Peter asked you guys about the SM data that, on the Q1 call, you said would be presented by year end. Are you still planning to present that? I wasn't really clear on your answer to that.

Might be headwinds towards.

Steven L. Hoerter: Sure. Thanks for the question, Andy. So, what I noted in my response to Peter's question is that we have some data from the Phase I, as Matt noted, from the GIST cohorts that have been accepted as a mini-oral presentation at ESMO. So, this is looking at the patients who dose escalated to 150 BID and looking at PFS1 as well as PFS2 for that cohort.

Getting a you know launch trajectory often going thanks.

Yeah. Thanks, Ben It's a great question you know we started talking about the potential impact to covert 19 on the Q1 call and now that we're of course and the middle of the launch you know Dan would be and a good position to offer some additional color. He had some in the prepared remarks, but I'm sure you can share some additional color in terms of what we're seeing what our experience has been a so far.

Steven L. Hoerter: So, we don't have on today's call any further update with respect to other cohorts from Phase I. Okay, is that SM cohort still enrolling, or what is the status of it? Yeah, we don't have any further update, you know, at this time on the cohort. As we've talked about previously, this has been a cohort for us that has been really challenging to enroll. As you know, from last year, we talked about how we had amended the protocol to start to treat patients at 150 BID. But it's been, you know, a tough going for us.

And what the challenges may be ahead in terms of being able to engage with physicians and a promotional discussion given covert 19 Dan.

Sure absolutely as it relates to.

Virtual details what our experience has told us so far is that virtual details can be.

They can be very effective challenge is when you're trying to coordinate the activities of many diverse stakeholders via physicians pharmacists and other key stakeholders.

Steven L. Hoerter: So we don't have any further updates for you at this time on that cohort. Okay. All right. Thanks for the questions. I appreciate it.

In these large complex healthcare institutions.

Andrew Scott Berens: And congratulations again. Thank you. Thank you for the next question. From the line of Ben Shim from Calacore, your lines are open.

And that when you're able to walk in lives and spend the day not in the facility.

Reni John Benjamin: Hi, thanks for taking my question and congratulations on your launch this quarter. A couple of companies have remarked that the virtual formats of some of these medical meetings like ASCO have made it hard for the company to get the word out about product launches, and I'm just wondering if you agree with that and maybe if you could rank order some of the challenges that you might see out there that might be headwinds towards getting, you know, the launch trajectory up. Yeah, thanks, Ben. It's a great question.

Is you know is one thing, but when you have to coordinate all of that remotely with one off often one off virtual engagements I can be challenging in it and it can frankly, it's not that it can be done it can and we are but sometimes it can take longer than normal. So it's.

It's something to keep in mind as it relates to.

Consideration for a ramp trajectory that sort of thing, but we've been I really want to underscore again, how pleased we then with position just prescribers reaction to can lock to the profile to the Oh data on to the FDA label. So when we are able to get in front.

Steven L. Hoerter: You know, we started talking about the potential impact of COVID-19 on the Q1 call. And now that we're, of course, in the middle of the launch, Dan would be in a good position to offer some additional color. He had some in his prepared remarks, but I'm sure he can share some additional color in terms of what we're seeing, what our experience has been so far, and what the challenges may be ahead in terms of being able to engage with physicians in a promotional discussion given COVID-19. Dan?

Oh, the right folks via the virtual.

Means it's been a very effective means.

It does create some challenges beyond that.

Pointed to in the prepared remarks that somewhat we've done extensive launch market research and I would just prescribers and some of that we'd ask questions about expectations for coven, moving forward or the impact of coated moving forward and some of them have noted that overall patient volume as a result of cogan.

Daniel C. Martin: Sure, absolutely. As it relates to virtual details, what our experience has told us so far is that virtual details can be very effective. The challenge is when you're trying to coordinate the activities of many diverse stakeholders, be it physicians, pharmacists, and other key stakeholders, in these large, complex health care institutions.

Just patient volume is still somewhat below.

Pre cobot 19 levels and that some positions would even consider delaying some late mines, which is as result of coking related concerns. So those are some of things that we've got our eye on and we'll continue to monitor as it relates to covert 19 challenges.

Daniel C. Martin: I'm doing that when you're able to walk in and spend the day in the facility, it's one thing, but when you have to coordinate all of that remotely with one-off, often one-off, virtual engagements, it can be challenging, and it can, frankly, it's not that it can't be done; it can, and we are, but sometimes it can take a bit longer than normal. So it's just something to keep in mind as it relates to consideration for ramp trajectory, that sort of thing, but we've been, I really want to underscore again how pleased we've been with physician, just prescribers' reaction to Kinloch, to the profile, and all the data into the FDA label. So, you know, when we are able to get in front of the right folks via virtual means, it's been a very effective means. It just does create some challenges.

Okay, Great I wish you the best of luck in tackling Muslim I just haven't another quick follow up or to can you comment on the amount of inventory that flowed into prepaids R&D prior to approval.

Is that where it's going to be.

Coming out of going forward until you actually start incurring cost of goods.

That's right I can take that one.

Up until the time approval all of the materials used for commercial product rent expense through R&D. Once we reached approval. We would then start to capitalize that you'll see some initial capitalization inventory on the balance sheet now, but it will be quite some time.

Before we start to have a higher and more normalized rate and cost of goods given the expense prior to approval.

[noise], Okay. So it's going to be I guess.

Tricky modeling item one for.

Daniel C. Martin: Beyond that, it was pointed out in the prepared remarks that we've done extensive launch market research with GIST prescribers, and some of that we asked questions about expectations for COVID moving forward or the impact of COVID moving forward. And some of them have noted that overall patient volume as a result of COVID, GIST patient volume is still somewhat below pre-COVID-19 levels, and that some physicians would even consider delaying some late-line switches as a result of COVID-related concerns. So, you know, those are some of the things that we've got our eye on and we'll continue to monitor as it relates to COVID. Okay, great. I wish you the best of luck in tackling those problems. I just have another quick follow-up or two. Can you comment on the amount of inventory that flowed into prepaids from R&D prior to approval? Is that where it's going to be? Coming out of going forward until you actually start. That's right; I can take that one. Up until the time of approval, all of the materials that are used for the commercial product or expenses through R&D, once we reach approval, we would then start to capitalize that.

Last question has I think you remarked that the you know it could take as long as 12 months for volume to get approval in China.

Can you refresh and remind us about what the.

Financial milestones would be upon approval and thereafter.

[noise] soccer, you want I'd like to take that question.

Sure should we haven't specifically provided the breakdown of the individual milestones we've talked about at the aggregate for a commercial and development based milestones. We we did announce them to see today that the filing itself I had the $2 million milestone payment, which we recognized in the second quarter, but.

We haven't given specifics on what a.

Future milestone for commercial approval might be.

Okay fair enough, thanks, very much and a good luck you guys.

Thank you.

Thank you for your next question.

From the line Yang from Jefferies. Your line you can't opioids.

Oh. Thank you for the follow up question. So I don't see three intrigue study patient enrollment completion influence acquirer.

He has.

Any expectation for the timeline for the data.

Looking at clinical sites Dot Gov.

You still list a primary completion date is a gen 2021, so I just want to ASCII for.

Thomas Patrick Kelly: So you'll see some initial capitalization inventory on the balance sheet now, but it will be quite some time before we start to have a higher and more normalized rate of cost of goods, given the expense prior to approval. Okay, so it's going to be, I guess, a tricky modeling item going forward. Last question I have is, I think you remarked that it could take as long as 12 months for Zai to get approval. Could you refresh and remind us about what the financial milestones would be upon approval and thereafter? Yeah, Tucker, do you want to, would you like to take that question?

He just came in line with your expectation. Thank you.

Yeah, Hi units, Steve. Thanks for the question, you're right that that time to study completion that you reference and clinical trials Dot Gov June of 2021, I was what we had to put up on Clin trials Dot Gov. When we first loaded the study up so what we said I know as Matt noted in his prepared remarks is that work. We're pleased with the pace of enrollment we're pleased to.

Of course with the site openings that we've seen and we intend to complete enrollment in the study at the end of the year and when we achieved that milestone of getting to target enrollment will then provide some additional color on when we might expect to see data from the study I think we'll have additional information that will give us a better read on what.

Thomas Patrick Kelly: Sure, so we haven't specifically provided the breakdown of the individual milestones. What we've talked about is the aggregate for commercial and development-based milestones. We did announce, obviously, today that the filing itself had the $2 million milestone payment, which we recognized in the second quarter. But we haven't given specifics on what a future milestone for commercial approval might be. Okay, fair enough.

The timeline could be for readout of course, it's I would say a an endpoint in the study that's enough time to event analysis. It's a PFS endpoint. So you have to wait of course for the events to accumulate based in part on the pace of enrollment overtime and the like but we'll provide that update when we get to completion of target enrollment here by the end of the year.

Reni John Benjamin: Thanks very much, and good luck to you guys. Thank you. Thank you for your next question. From the line of Eun Yang, from Jefferies, your line is now open.

Thank you.

And they don't have any further questions over the Phyllis let me turn to call a very back to Steve.

Steven L. Hoerter: Well, thank you for the follow-up question. So, the Phase III Intrigue Study patient enrollment completion in the fourth quarter, do you have any expectation for the timeline for the data? Looking at clinicaltrials.gov, you still list the primary completion date as of June 2021. So I just want to ask you if that is still in line with your expectation. Thank you. Yeah, hi Eun, it's Steve.

Great. Thanks, Michelle and thanks, everybody for joining us on the call today and thank you for your continued support we look forward to keeping all of you updated on our continued progress with our first commercial launch of can lock as well as the balance of our development programs, but we'll have a great evening. Thank you take care.

Ladies and gentlemen, this concludes today's conference call. Thank you for joining you may now disconnect.

Steven L. Hoerter: Thanks for the question. You're right, that time to study completion that you reference in ClinicalTrials.gov of June 2021 was what we had put up on ClinicalTrials.gov when we first loaded the study up. So what we've said, as Matt noted in his prepared remarks, is that we're pleased with the pace of enrollment, we're pleased, of course, with the site openings that we've seen, and we intend to complete enrollment in the study at the end of the year. And when we achieve that milestone of getting to target enrollment, we'll then provide some additional color on when we might expect to see data from the study. I think we'll have additional information that will give us a better read on what the timeline could be for the readout.

[music].

Steven L. Hoerter: Of course, it's an endpoint in the study that's a time to event analysis, it's a PFS endpoint, so you have to wait, of course, for the events to accumulate, based in part on the pace of enrollment over time and the like, but we'll provide that update when we get to completion of target enrollment here by the end of the year.

Steven L. Hoerter: Thank you. And we don't have any further questions over the phone. Let me turn the call over to Steve. Great. Thanks, Rochelle, and thanks, everybody, for joining us on the call today, and thank you for your continued support. We look forward to keeping all of you updated on our continued progress with our first commercial launch of Kinloch as well as the balance of our development programs.

Steven L. Hoerter: I hope you all have a great evening. Thank you. Take care. Ladies and gentlemen, this concludes today's conference call. Thank you for joining me now. This can, ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??