Q4 2020 Crinetics Pharmaceuticals Inc Earnings Call

Greetings and welcome to the Kinetics Pharmaceuticals, Inc, 2021, clinical strategy and 2020 financial results Conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. Please no.

Operator: Welcome to the Crinetics Pharmaceuticals Inc. 2021 Clinical Strategy and 2020 Financial Results Conference Call. At this time, all participants are in a listen-only mode.

Operator: A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone. Please note this conference is being recorded. I will now turn the conference over to your host, Cory Davis. You may begin. Thanks, Alex.

This conference is being recorded I will now turn the conference over to your host Corey Davis you may begin.

Thanks, Alex and thank you all for participating in today's conference call before we start I'd like to point out there is a slide deck.

Corey George Davis: And thank you all for participating in today's conference call. Before we start, I'd like to point out there is a slide deck that is going to accompany today's presentation. The deck can be viewed using the webcast link provided on the investor page of the Crinetics website.

He is going to accompany today's presentation on the deck can be viewed using the webcast link provided on the investor page of the kinetics website also posted on this web page as the news release issued earlier today announcing <unk> 2021 clinical plans in the fourth quarter and full year 2020 financial results.

Corey George Davis: Also posted on this web page is a news release issued earlier today announcing Crinetics' 2021 clinical plans and fourth quarter and full year 2020 financial results. I'd like to remind everyone listening that some of the information contained in the news release and on this call is covered under the safe harbor provisions of the Private Securities Litigation Reform Act and contains forward-looking statements based on current expectations, including statements about the initiation of planned clinical trials. Such forward-looking statements are not guarantees of performance, and the company's actual results could differ materially from those stated or implied in such statements due to the risks and uncertainties associated with the company's business.

I'd like to remind everyone listening that some of the information contained in the news release and on this call is covered under the Safe Harbor provisions of the private Securities Litigation Reform Act and contains forward looking statements based on current expectations, including statements about the initiation of a play on clinical trials such forward looking statements are not a guarantee of performance and the company's actual results could differ materially.

Those stated or implied in such statements due to the risks and uncertainties associated with the company's business is for.

Corey George Davis: These forward-looking statements are qualified, in their entirety, by the cautionary statements contained in today's news release, the company's other news releases, and Crinetics' SEC filings, including on its annual report, Form 10-9. I'd also like to point out that the content of this call contains time-sensitive information that is accurate only as of the date of this live broadcast, March 30, 2021. Crinetics takes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. With that, I'd like to turn it over to Dr. Scott Struthers, founder and CEO of Crinetics. Scott, go ahead.

We're looking statements are qualified in their entirety by the cautionary statements contained in today's news release, the company's other news releases and frenetic SEC filings, including on a day annual report form 10-K, I'd also like to point out that the content of this call contains time sensitive information that is accurate only as of the date of this live broadcast March 32021, Karnataka.

No obligation to revise or update any forward looking statements to reflect events or circumstances. After the date on this call with that I'd like to turn it over.

Dr. Scott Struthers, founder and CEO of kinetics, Scott go ahead.

Thanks, Corey and thanks, Paul for your listening this afternoon I'm sorry for that.

Unknown Executive: And thanks to all of you listening. I'm joined today by Dr. Alan Krasner, our Chief Medical Officer, and Marc Wilson, our Chief Financial Officer. Although we're reporting our 2024 quarter and year-end financials, the primary purpose of hosting today's call is to provide some additional color on our development strategy and our clinical programs for what we believe will continue to be an exciting year for Crinetics. Now, before we get into what we have in store for the balance of the year, I'd like to first touch on some of the recent accomplishments that have set us up for success.

By Dr. Alan Krasner, our Chief Medical Officer, and Mark Wilson, our Chief Financial Officer.

Although we reported our 2024th quarter on yearend financial results.

The primary purpose of hosting todays call is to provide some additional color on our development strategy and our clinical programs for what we believe we will.

<unk> to be an exciting year for peanuts.

Now before we get into what we have in store for the balance of the year I'd like to first touch on some of the recent accomplishments that set us up for success.

Unknown Executive: Last October, we reported positive phase two data, and Acromegaly patients demonstrating that once-daily oral peltucetine allowed patients to maintain their IGF-1 levels, switching from the current standard of care, which is injected octreotide and lambreotide depotherapy. This represented a significant accomplishment as IGF-1 is the biomarker used by physicians to manage acromegaly patients around the Once we became comfortable that patients could effectively and seamlessly switch from injectable to our once daily oral pill, we approached the FDA and other regulators in order to design a robust phase three program.

October we reported positive phase two data.

In acromegaly patients demonstrating that once daily oral pill tooth gene allow patients to maintain their IGF one levels.

And switching from the current standard of care, which are injected octreotide on land Ria type depot therapies.

This represented a significant accomplishment as IGF, one biomarker used by physicians to manage aggregate acromegaly patients around the world.

Once we became comfortable that patients could effectively and seamlessly switch from injectable to our once a day oral pill.

The FDA and other regulators and average design a robust phase III program to support our goal to obtain a broad label.

Unknown Executive: Support our goal to obtain a broad label and position paltucetine as a differentiated product with a competitive advantage. Following these data and a recent productive meeting with the FDA, we are now advancing PAL-215 into a Phase III program. Alan will walk you through that design in a moment.

And positioning <unk> as a differentiated product with a competitive advantage.

Following these data in a recent productive meeting with the FDA. We are now advancing <unk> <unk> into a phase III program Alan will walk you through that designs on the moment.

We're also recently expanded our clinical stage pipeline advancing CRM for 894, and CRM for 777 into phase one clinical trial.

Unknown Executive: We also recently expanded our clinical stage pipeline, advancing CRN 4894 and CRN 4777 into Phase I clinical trials. As a reminder, 4894 is an investigational oral ACTH antagonist being developed for Cushing's disease and congenital adrenal hyperplasia, while 4777 is an investigational oral SST5 agonist being developed for congenital hyperinsulinemia. It's worth noting that, just as was the case for paltucetine, many products in endocrinology can be de-risked early in clinical development, and this use of biomarkers can be predictive of clinical success in later trials. Many of these key biomarkers have also been accepted as primary endpoints in registration.

As a reminder, for 894 is an investigational oral ACTH antagonist being developed for Cushings disease in congenital adrenal hyperplasia, well for 777 is an investigational oral.

C five agonist being developed for congenital hyperinsulinism.

It's worth noting that justice.

As was the case for us to sustain many products in endocrinology can be derisked early in clinical development.

The use of Biomarkers can be predictive of clinical success on later trials.

Many of these key Biomarkers have also been accepted this primary endpoints in registration trials.

Unknown Executive: Therefore, these two phase one endocrine programs have the potential to provide more meaningful outcomes than traditionally found in other therapeutic areas of drug development. These clinical accomplishments were also complemented by the achievement of key regulatory milestones as the U.S. FDA granted paltucetine an orphan drug designation for the treatment of acromegaly, and CRN 4777 received a rare pediatric disease designation for the treatment of congenital hyperins. Collectively, the advancements of our clinical pipeline have left us poised to solidify our position as a leader in the de novo design and development We're also well positioned financially as we ended 2020 with over 170 million in cash and investments.

For these two things one endocrine programs have the potential to provide more meaningful outcomes than traditionally found in other therapeutic areas on drug development.

These clinical accomplishments were also complemented by the achievement of key regulatory milestones for U S. FDA granted <unk> orphan drug designation for the treatment of acromegaly.

And CRM for seven seven received rare pediatric disease designation for the treatment of congenital hyperinsulinism.

Collectively these advancements of our clinical pipeline it left us poised to solidify our position as a leader in the de Novo design and development of novel small molecule drugs for endocrine diseases.

We're also well positioned financially as we enter 2020 with over $170 million in cash and investments based on our current expectations.

Unknown Executive: Based on our current expectations and in line with previous guidance, This will provide us with funding until 2023. Now I'd like to preview Alan's section of the call by giving a high-level overview of our Phase III acromegaly program for paltricity, which we have now named PASP. The Pathfinder program, which was developed based on feedback from our recently completed meeting with the FDA, as well as interactions with others, consists of two well-controlled Phase III trials that we believe could support Paltusatine's approval in the U.S. and European Union.

And in line with previous guidance this will provide us funding into 2023.

Yeah.

Now I'd like to preview our preview Alan's section of the call by giving a high level overview of our phase III Acromegaly program for Perl to fatigue, which we've now named pathway.

Fighter program program, which was developed on based on feedback from our recently completed meeting with the FDA as well as interactions with other regulators.

Consists of two well controlled phase III trials that we believe could support teams approval in the U S and European Union.

Used to independent placebo controlled pivotal trials are intended to support a broad label for <unk> that we believe would allow for its use as both a first line medical therapy.

Unknown Executive: These two independent placebo-controlled pivotal trials are intended to support a broad label for Faltusatine that we believe would allow for its use as both a first-line medical therapy and Seamless Switching for Patients Currently on Injection and looking for a more convenient, less painful alternative. In support of this goal, our Phase III trials will enroll a broad cross-section of patients who are achieving biochemical control. Both studies will be placebo-controlled, and the primary endpoint for both studies is the proportion of patients who are responders achieving biochemical control. Regulators define a responder as a patient whose IGF levels are at or below one times the upper limit of normal.

And of course seamless switching for patients currently on Injectables.

And looking for a more convenient less painful alternatives.

In support of this goal our phase III trials will enroll a broad cross section of acromegaly patients both.

Both studies will be placebo control.

Primary end point for both studies is the proportion of patients for responders achieving biochemical control.

Leaders define a responder as a patient whose IGF levels are at or below one times debt problem tomorrow.

First of these trials Pathfinder one focuses on patients switching from the current standard of care and will enroll patients for already biochemically controlled on injectable Octreotide for Atlanta.

Unknown Executive: The first of these trials, Pathfinder I, focuses on patients switching from the current standard of care and enrolls patients who are already biochemically controlled on injectable octreotide or LAM-RAD. Our second phase 3 trial, Pathfinder 2, focuses on untreated patients who are biochemically uncontrolled, meaning their IGF levels are above 1 times the upper limit of normal. Together, if successful, we believe these trials could support registration of palpacitine in the U.S. and E.U. for all acromegaly patients who require pharmacotherapy.

Our second phase III trial Pathfinder two focuses on untreated patients were biochemically uncontrolled, meaning their IGF levels are above one times the upper limit normal.

Together if successful we believe these trials could support registration of <unk> in the U S and EU for all acromegaly patients who require pharmacotherapy, including both untreated patients.

Switching from standard of care, regardless of whether they have been biochemically controlled on these prior therapies.

Unknown Executive: Including both untreated patients and those switching from standard of care, regardless of whether they have been biochemically controlled on these prior therapies. This would best position Palo Souto as a team to take advantage of the acromegaly market opportunity and, most important, increase the number of acromegaly patients who would stand to benefit from the embedded Peltucetine's Once Daily World. With that, I'll now hand the call over to our Chief Medical Officer, Dr. Alan Krasner, who will dive into the details of the Pathfinder I and II study designs. Thank you, Scott, and good afternoon, everyone.

This is the best positioned policy with the team to take advantage of the acromegaly market opportunity and most importantly increase the number of acromegaly patients who stand to benefit from the advantages of.

<unk> once daily oral dosing.

Yeah.

With that I'll now hand, the call over for our Chief Medical Officer, Dr. Alan Krasner, who will dive into the details on the Pathfinder, one and two study designs.

Hello.

Thank you Scott and good afternoon, everyone.

I'd like to start by describing the design of the Pathfinder One study on slide five.

It was designed based on feedback from the FDA and other regulators and mirrors. The design of other recently approved products for acromegaly in the U S.

Alan S. Krasner: I'd like to start by describing the design of the PATHFINDER-1 study on slide 5. It was designed based on feedback from the FDA and other regulators and mirrors the design of other recently approved products for acromegaly in the U.S. As Scott mentioned, Pathfinder 1 will enroll patients who are biochemically controlled on octreotide or lanreotide depo monotherapy. Target enrollment for this study is 52 patients. These patients will remain on their injected depo monotherapy through a one- to three-month screening period, during which time we will establish baseline values for parameters such as IGF-1 growth hormone and total acromegaly symptoms diary score.

As Scott mentioned Pathfinder, one will enroll patients who are biochemically controlled on octreotide or Atlanta, Ria tied depot mono therapy.

Target enrollment for this study is 52 patients. These patients will remain on their injected depot mono therapy through a one to three months screening period during which time, we will establish baseline values for parameters such as IGF, one growth hormone and total acromegaly symptom diary score.

After completing the screening period patients will be randomized to receive once daily oral doses of participating or placebo.

T F. One assessments will be conducted each month throughout the studies nine months treatment period.

Alan S. Krasner: After completing the screening period, patients will be randomized to receive once-daily oral doses of peltucetine or placebo. IGF-1 assessments will be conducted each month throughout the study's nine-month treatment period. Patients randomized to Daltucetine will start at a 40 milligrams per day dose. If during months 2 to 6, a patient's IGF-1 level rises above 0.9 times the upper limit of normal, that patient's dose will be increased to 60 mg as some patients may need a higher dose. Alternatively, the dose can be decreased in 20 milligram increments if necessary for tolerability reasons.

Patients randomized to <unk> will start at a 40 milligram per day dose if gearing months two to six a patient's IGF one level rises above 0.9 times for the upper limit of normal.

That patient's dose will be increased to 60 milligrams at some patients may need a higher dose.

Alternatively, the dose can be decreased in 20 milligram decrements if necessary for Tolerability reasons.

Patients will then be maintained on the dose that was established during the first six months of the treatment period on <unk>.

Average of the three IGF one assessments measured at weeks 30 to 30 for 36 will serve to determine IGF one responder status.

Alan S. Krasner: Patients will then be maintained on the dose that was established during the first six months of the treatment period. An average of the three IGF-1 assessments, measured at Weeks 32, 34, and 36, will serve to determine IGF-1 responder status. The primary endpoint of Pathfinder 1 is a responder analysis comparing the percentage of control patients in the active arm to those in the placebo arm. For statistical success, Heltucity needs to demonstrate superiority to placebo in this responder analysis in order to meet the primary objective.

The primary endpoint of Pathfinder, one is a responder analysis comparing the percentage of control patients in the active arm to those in the placebo arm.

For statistical success helped to city needs to demonstrate superiority to placebo in this responder analysis in order to meet the primary objective.

This study is over 90% power to do this.

Because this is a placebo controlled trial procedures are in place to rescue patients with standard injection therapy if necessary.

Once who have two consecutive IGF one measurements above one three times the upper limit of normal plus an exacerbation of acromegaly clinical symptoms, while on the maximal dose will receive rescue therapy patients who require a rescue therapy are counted as non responders.

Alan S. Krasner: This study is over 90% power to do this. Because this is a placebo-controlled trial, procedures are in place to rescue patients with standard injection therapy, if necessary. Patients who have two consecutive IGF-1 measurements above 1.3 times the upper limit of normal plus an exacerbation of acromegaly clinical symptoms while on the maximal dose will receive rescue therapy. Patients who require rescue therapy are counted as non-responders.

Looking ahead, we expect to initiate Pathfinder one in the second quarter of the year in line with previous guidance for our Phase III program.

Topline data from this study is expected in 2023 and the study will be followed by an open label extension for eligible patients.

I'll now shift gears, a bit to slide six and speak about our Pathfinder two study, which has been designed to enable perl to citizens use in untreated biochemically uncontrolled patients.

Alan S. Krasner: Looking ahead, we expect to initiate Pathfinder I in the second quarter of the year, in line with previous guidance for our Phase III program. Top-line data from this study is expected in 2023, and the study will be followed by an open-label extension for eligible patients. I'll now shift gears a bit to slide 6 and speak about our PATHFINDER-2 study, which is designed to enable peltucitin's use in untreated, biochemically uncontrolled patients.

This study will enroll medication naive patients or patients who have not received medication in the previous for months as well as patients receiving octreotide, who agreed to wash out under supervision to demonstrate a rise in IGF, one above the upper limit of normal.

Target enrollment for the study of 74 patients Hasnt Pathfinder, one baseline values of IGF, one will be established during the screening period.

However, the Pathfinder two population will consist of patients with elevated IGF, one levels initiating treatment, whereas petfinder. One will consist of those with normal IGF levels on treatment with switched their treatment to Perl to city.

Alan S. Krasner: This study will enroll medication-naive patients, or patients who have not received medication in the previous four months, as well as patients receiving octreotide who agree to wash out under supervision to demonstrate a rise in IGF-1 above the upper limit of normal. The target enrollment for the study is 74 patients.

The combination of these two studies will capture the spectrum of acromegaly patients who require medical therapy.

After completing the screening period Pathfinder two patients will be randomized to receive once daily oral doses of <unk> or placebo.

Alan S. Krasner: As in Pathfinder 1, baseline values of IGF-1 will be established during the screening period. However, the Pathfinder 2 population will consist of patients with elevated IGF-1 levels initiating treatment, whereas Pathfinder 1 will consist of those with normal IGF levels on treatment who switch their treatment to peltucetine. The combination of these two studies will capture the spectrum of acromegaly patients who require medical therapy.

IGF, one assessments will be scheduled periodically throughout the studies planned 12 week treatment period.

The study's primary endpoint is a responder analysis based on the mean IGF one measurement techniques 10, and 12, comparing <unk> to placebo.

As in past finder, one the target dose range for patients in this study will be 40 to 60 milligrams per day.

Alan S. Krasner: After completing the screening period, Pathfinder 2 patients will be randomized to receive once-daily oral doses of paltucetine or placebo. IGF-1 assessments will be scheduled periodically throughout the study's planned 12-week treatment period. The study's primary endpoint is a responder analysis based on the mean IGF-1 measurements at weeks 10 and 12, comparing peltucetine to placebo. As in Pathfinder I, the target dose range for patients in this study will be 40 to 60 milligrams per day.

Rescue criteria well also be in place for this study while we are still finalizing the rescue criteria for pets find or two we can say that they will be also based on IGF, one levels and clinical acromegaly symptom.

Looking ahead, we expect to initiate pathfinder too in the second half of the year with topline data also expected in 2023.

As in the case with Pathfinder, one we expect the trial to have statistical power greater than 90% and eligible patients will have the option to participate in an open label extension study.

Alan S. Krasner: Rescue criteria will also be in place for this study. While we are still finalizing the rescue criteria for Pathfinder 2, we can say that they will also be based on IGF-1 levels and clinical acromegaly symptoms. Looking ahead, we expect to initiate Pathfinder 2 in the second half of the year, with pipeline data also expected in 2023.

Now that we have walked through the design of our phase III program in detail I'd like to take a step back and give a high level summary on slide seven of what's next for <unk>.

As I mentioned, we expect to initiate both of the past fine. Your studies this year with Pathfinder one to begin in the second quarter and Pathfinder two expected to begin in the second half of 2021.

Alan S. Krasner: As in the case with Pathfinder 1, we expect the trial to have statistical power greater than 90%, and eligible patients will have the option to participate in an open-label extension study. Now that we have gone through the design of our Phase 3 program in detail, I'd like to take a step back and give a high-level summary on slide 7 of what's next for Peltuceti. As I mentioned, we expect to initiate both of the Pathfinder studies this year, with Pathfinder I expected to begin in the second quarter and Pathfinder II expected to begin in the second half of 2021.

We also plan to initiate a phase two trial evaluating <unk> as a treatment for patients with neuroendocrine tumors or net complicated by carcinoid syndrome in 2020 one.

Net of data, we've generated to date and our acromegaly trials gives us confidence in this program because the same octreotide and land. We got tied depots currently used to treat acromegaly are also used to treat nuts.

Looking a bit further down the road, we expect to report topline data from our Pathfinder, one and two studies in 2023.

I'd like now to review our fundamental goals in both phase III studies.

Our pathfinder trials will be deemed a success if they demonstrate <unk> ability to outperform placebo in a responder analysis.

Alan S. Krasner: We also plan to initiate a Phase II trial evaluating peltucetine as a treatment for patients with neuroendocrine tumors, or NETs, complicated by carcinoid syndrome in 2021. The positive data we've generated to date in our acromegaly trials gives us confidence in this program because the same octreotide and lanreotide depots currently used to treat acromega Looking a bit further down the road, we expect to report top line data from our Pathfinder 1 and 2 studies in 2023.

Given the pharmacologic activity demonstrated by Perl to sitting in our phase one and two studies. We are confident we can meet this goal, which will which we believe will support approval in the U S and European Union.

I'd also like to remind you that we are targeting a broad label with these studies as we hope <unk> will be accessible both as a first line pharmacotherapy and as an alternative to burdensome Octreotide Orlando Neotype injections.

Now before I hand, it off to Mark to summarize our recent financial results I'd like to talk briefly about our plans for 48, 94, and <unk> 4700 77 programs.

Let me first start on slide eight by saying that our approach to endocrinology provides the opportunity to explore the safety and efficacy of drug candidates early in the development process.

Alan S. Krasner: I'd like now to review our fundamental goals in both Phase 3 studies. Our Pathfinder trials will be deemed a success if they demonstrate peltucetine's ability to outperform placebo in a responder analysis. Given the pharmacologic activity demonstrated by Peltucetine in our Phase I and II studies, we are confident we can meet this goal, which we believe will support approval in the U.S. and European Union. I'd also like to remind you that we are targeting a broad label with these studies as we hope peltucetine will be accessible both as a first-line therapy and as an alternative to burdensome octreotide Now, before I hand it off to Marc to summarize our recent financial results, I'd like to talk briefly about our plans for 4894 and 4777.

The beauty of drug development and endocrinology is its ability to translate from preclinical to patient studies.

<unk> systems are similar between mammals, and we can study the pharmacology of the drug candidates on a warm.

On hormone levels in animal models and in healthy volunteers in a way that provides meaningful proof of concept and dose selection guidance for later clinical studies in patients.

Our plan for the Phase one studies with 48 94, and 4700 77 is analogous to what we did in our initial phase one healthy volunteer study upheld tusa team, which provided an important early information for that program.

In these phase one studies, we will of course evaluate safety Tolerability and pharmacokinetics.

But in addition to this we aim to understand the pharmacodynamic effects on relevant hormone levels to give us a strong sense of the molecules pharmacology and potency to produce the desired therapeutic effects in patients.

Alan S. Krasner: Let me first start on slide 8 by saying that our approach to endocrinology provides the opportunity to explore the safety and efficacy of drug candidates early in the development process. The beauty of drug development in endocrinology is its ability to translate from preclinical to patient studies. Endocrine systems are similar between mammals, and we can study the pharmacology of drug candidates on hormone levels in animal models and in healthy volunteers in a way that provides meaningful proof of concept and dose selection guidance for later clinical studies in patients. Our plan for the Phase I studies with 4894 and 4777 is analogous to what we did in our initial Phase I healthy volunteer study of Teltucetine, which provided important early information for that program.

And some of you May know CRM zero 48, 94 is an investigational oral non peptide ACTH antagonist that we are developing for cushings disease in congenital adrenal hyperplasia for CAH.

It entered a phase one trial pictured on slide nine in healthy volunteers earlier this year and we expect to report preliminary data from the single ascending dose portion of this study by the end of June with data from the multiple ascending dose portion coming in the second half of the year.

Well it is typical for phase one trials to assess safety Tolerability and pharmacokinetics. We expect this study to provide added value by establishing clinical proof of concept for 48 94 in CAH and Cushings disease.

We are able to do this by measuring hormonal biomarkers used in our animal model studies, which are the same hormones that under Chronologist measure every day in practice. These.

Alan S. Krasner: In these Phase I studies, we will, of course, evaluate safety, tolerability, and pharmacokinetics. But in addition to this, we aim to understand the pharmacodynamic effects on relevant hormone levels to give us a strong sense of the molecule's pharmacology and potency to produce the desired therapeutic effects in patients. As some of you may know, CRN04894 is an investigational oral non-peptide ACTH antagonist that we are developing for Cushing's disease and congenital adrenal hyperplasia, or CAH.

These hormones are also key endpoints that regulators used to evaluate new drugs for approval in these conditions.

Both CAH and pushing for disease are characterized by excess ACTH secretion, which results in adrenal gland oversee accretion of adrenal androgens in the case of CAH for cortisol in the case of Cushings disease.

Adrenal androgens and cortisol can be readily measured in healthy volunteers and in patients.

Alan S. Krasner: It entered a phase one trial, pictured on slide nine, in healthy volunteers earlier this year, and we expect to report preliminary data from the single ascending dose portion of the study by the end of June, with data from the multiple ascending dose portion coming in the second half of the year. While it is typical for Phase I trials to assess safety, tolerability, and pharmacokinetics, we expect this study to provide added value by establishing clinical proof of concept for 4894 and CAH and Cushing's.

In our ongoing phase one study we are evaluating the ability of 48 94 to block the action of ACTH on the adrenal glands, which should be predictive of the molecules efficacy.

To make this assessment, we are administering ACTH, two healthy volunteers and measuring levels of cortisol in the blood.

This is a well established technique to address to assess adrenal function that has been used by endocrinologists for many years.

Now if I can turn your attention to the diagram on the right side of this slide I'll briefly explain how we are adapting this technique to explore the pharmacology of $48 94.

Alan S. Krasner: We are able to do this by measuring hormonal biomarkers used in our animal model studies, which are the same hormones that endocrinologists measure every day in practice. These hormones are also key endpoints that regulators use to evaluate new drugs for approval in these conditions. Both CAH and Cushing's disease are characterized by excess ACTH secretion, which results in the adrenal gland over-secretion of adrenal androgens, in the case of CAH, or cortisol, in the case of Cushing's disease.

On day minus one healthy volunteer receives an injection of ACTH. We then take blood draws 30, 60, and 120 minutes later to see how cortisol output from the Adrenals response to the ACTH injection.

The next day, we treat study participants with World 48, 90 for repeat the ACTH stimulation and again measure blood cortisol levels to determine how 48 94 affects the adrenal response.

Alan S. Krasner: Both adrenal androgens and cortisol can be readily measured in healthy volunteers and in patients. In our ongoing Phase I study, we are evaluating the ability of 4894 to block the action of ACTH on the adrenal glands, which should be predictive of the molecule's efficacy. To make this assessment, we are administering ACTH to healthy volunteers and measuring levels of cortisol in the blood. This is a well-established technique to assess adrenal function that has been used by endocrinologists for many years.

Upon the completion of this study what we are hoping to see is dose dependent suppression of ACTH stimulated P. Cortisol with 48 90 for.

This would provide clinical proof of concept in both cushings disease and C H, which in turn de risks the clinical program.

Alan S. Krasner: Now, if I can turn your attention to the diagram on the right side of the slide, I'll briefly explain how we are adapting this technique to explore the pharmacology of 4894. On day minus one, a healthy volunteer receives an injection of ACTH. We then take blood draws 30, 60, and 120 minutes later to see how cortisol output from the adrenals responds to the ACTH injection. The next day, we treat study participants with oral 4894, repeat the ACTH stimulation, and again measure blood cortisol levels to determine how 4894 affects the adrenal response. Upon the completion of this study, what we are hoping to see is dose-dependent suppression of ACTH-stimulated P-cortisol by 4894.

Such data will also provide insights into therapeutically relevant doses at 48, 94, which will be useful when designing subsequent studies in patients.

I'll now shift gears again to slide 10, and talk about CRM zero 4700, 77, our investigational oral non peptide S. S. T five agonist being developed as a treatment for congenital hyperinsulinism for congenital hei.

Like the 48 90 for Phase one trial I. Just described for 4700 77 Phase. One study is designed to assess safety tolerability and pharmacokinetics as well as to provide early clinical proof of concept in the relevant relevant indication.

Once again, we were able to do this in phase one because we are developing a drug for an indication with well established biology and blood based biomarkers.

As the name implies congenital hyperinsulinism is caused by excess insulin secretion, even in the face of low blood glucose levels, which can lead to dangerous hypoglycemic episodes.

Alan S. Krasner: This would provide clinical proof of concept in both Cushing's disease and CAH, which in turn de-risks the clinical program. Such data will also provide insights into therapeutically relevant doses of 48-94, which will be useful when designing subsequent studies in patients. I'll now shift gears again to slide 10 and talk about CRN 04777, our investigational oral nonpeptide SST5 agonist being developed as a treatment for congenital hyperinsulinism or congenital hypoglycemia.

In our ongoing phase one study we are evaluating the ability of $47 77 to reduce insulin secretion, which should be predictive of efficacy in congenital hei.

I should emphasize here at 4700 77 is designed to act at the S. S. T. Five receptor, which is independent of many of the mutations that cause congenital hei.

This is significant as it should allow 4700 77 to be broadly applicable to congenital HIV patients with various underlying mutation.

Alan S. Krasner: Like the 4894 Phase I trial I just described, the 4777 Phase I study is designed to assess safety, tolerability, and pharmacokinetics, as well as to provide early clinical proof of concept in the relevant indication. Once again, we are able to do this in Phase 1 because we are developing a drug for an indication with well-established biology and blood-based biomarkers. As the name implies, congenital hyperinsulinism is caused by excessive insulin secretion even in the face of low blood glucose levels, which can lead to dangerous hypoglycemic episodes.

Turning our attention now to the right side of this slide you can see that we are utilizing two separate techniques to explore the pharmacology of $47 77.

The first technique is an intravenous glucose tolerance test.

For this test is relatively simple administration of exogenous glucose stimulates the secretion of the endogenous insulin.

So to evaluate the ability of 4700 77 to suppress insolence accretion, we take healthy volunteers and infuse them intravenously with a bolus of glucose on day minus one and then measure insulin and blood glucose changes that result from the glucose injection.

Alan S. Krasner: In our ongoing Phase I study, we are evaluating the ability of 4777 to reduce insulin secretion, which should be predictive of efficacy in congenital HI. I should emphasize here that 4777 is designed to act at the SST5 receptor, which is independent of many of the mutations that cause congenital HI. This is significant, as it should allow 4777 to be broadly applicable to congenital HI patients with various underlying mutations. Turning our attention now to the right side of the slide, you can see that we are utilizing two separate techniques to explore the pharmacology of 4777. The first technique is the intravenous glucose tolerance test.

The next day, we treat study participants with World 47, 77 repeat the intravenous glucose administration and again measure insulin and glucose responses to determine if 4700 77 is able to reduce insulin secretion.

The second technique being employed in this phase one trial is a cellphone urea challenge test.

Self on here is our well known class of diabetes drug that stimulate insulin secretion.

The use of stuffing areas can pharmacologically mimic the most common mutations that are found in about half of congenital HIV patients.

That's self on your ears are a useful tool to evaluate 4700 70 sevens pharmacologic activity.

Alan S. Krasner: The premise for this test is relatively simple; administration of exogenous glucose stimulates the secretion of endogenous insulin. So to evaluate the ability of 4777 to suppress insulin secretion, we take healthy volunteers and infuse them intravenously with a bolus of glucose on day minus one, and then measure insulin and blood glucose changes that result from the glucose injection. The next day, we treat study participants with oral 4777, repeat the intravenous glucose administration, and again measure insulin and glucose responses to determine if 4777 is able to reduce insulin secretion.

As you can see on the diagram on the bottom right on the slide we plan to first administer itself on urea to healthy volunteers and then measure their levels of insulin and glucose for a period of nine hours. During this time participants will receive intravenous glucose as needed in order to prevent the cell phone area from causing low blood.

Close levels for hypoglycemia.

This precise infusion of glucose is referred to as a glucose clamped technique because the subject glucose level is being clamped in the normal range.

The amount of IV glucose required to keep the subjects glucose level normal is a quantitative measure of the south central area effect.

Alan S. Krasner: The second technique being employed in this phase one trial is a sulfonylurea challenge test. Sulfonylureas are a well-known class of diabetes drugs that stimulate insulin secretion. The use of sulfonylureas can pharmacologically mimic the most common mutations that are found in about half of congenital HI patients.

One or two days later participants will again receive itself on urea well on a glucose clamp on our after receiving the self on urea participants will.

Then b given world 4700, 77, insulin and other blood based Biomarkers will again be assessed for a nine hour period.

Alan S. Krasner: Thus, sulfonylureas are a useful tool to evaluate 4777's pharmacologic activity. As you can see in the diagram on the bottom right of the slide, we plan to first administer sulfonylurea to healthy volunteers and then measure their levels of insulin and glucose for a period of nine hours. During this time, participants will receive intravenous glucose as needed in order to prevent the cell fungeria from causing low blood glucose levels or hypoglycemia. This precise infusion of glucose is referred to as a glucose clamp technique because the subject's glucose level is being clamped in the normal range.

47, 77% is expected to reduce insulin secretion in response to IV glucose for a cellphone urea challenge, which for the patient could mean fewer episodes of debilitating hypoglycemia.

Demonstrating this with significantly Derisked. This clinical program, while also providing valuable dosing information to aid in the design of subsequent studies in patients.

With that I'll turn the call over to Mark Wilson, our Chief Financial Officer to discuss our financial results for the fourth quarter and full year of 2020.

Mark.

Thanks, Alan and good afternoon, everyone.

Alan S. Krasner: The amount of IV glucose required to keep the subject's glucose level normal is a quantitative measure of the self-injury effect. One or two days later, participants will again receive sulfonylurea while on a glucose clamp. An hour after receiving the sulfonylurea, participants will then be given oral 4777, and insulin and other blood-based biomarkers will again be assessed for a nine-hour period. 4777 is expected to reduce insulin secretion in response to IV glucose or a sulfonylurea challenge, which for the patient could mean fewer episodes of debilitating hypoglycemia. Demonstrating this would significantly de-risk this clinical program while also providing valuable dosing information to aid in the design of subsequent studies in patients. With that, I'll turn the call over to Marc Wilson, our Chief Financial Officer, Marc?

I'm pleased to report that in 2020 kinetics was able to maintain a strong financial position, while making significant advancements and its clinical and drug discovery programs.

Our unrestricted cash cash equivalents and investments improved to $179 million at the end of 2020.

Compared to a $118 $4 million at the end of 2019.

Based on our current expectations, our financial runway extends into 2023 through the anticipated top line data readouts from the path to attain Pathfinder studies.

As of February 'twenty, eight 2021 the company had roughly 33 million common shares outstanding.

Total operating expenses for the fourth quarter, and full year, 2020, or approximately $21 8 million and $75 million respectively.

This represented an increase over total operating expenses for the same periods in 2019, which for $15 5 million and $55 million respectively.

Research and development expenses for the fourth quarter, and full year, 2020, or $16 8 million and $57 million, respectively, compared to $12 1 million and $41 5 million for the same periods in 2019.

Marc J. C. Wilson: Thanks, Alan, and good afternoon, everyone. I'm pleased to report that in 2020, Crinetics was able to maintain a strong financial position while making significant advancements in its clinical and drug discovery programs. Unrestricted cash, cash equivalents, and investment improved to $170.9 million at the end of 2020, compared to $118.4 million at the end of 2019. Based on our current expectations, our financial runway extends into 2023 through the anticipated top-line data readouts from the Paltusatine Pathfinder studies. As of February 28, 2021, the company had roughly 33 million common shares outstanding.

Increases in R&D spend were primarily attributable to clinical development and manufacturing activities propel tusa team as well as progress on the company's preclinical programs.

General and administrative expenses also increased for the fourth quarter and full year 2020 going from $3 4 million and $13 5 million in 2019 to for.

$5 million and $18 million for the same periods in 2020.

These increases were primarily due to personnel costs to support the company's growth.

Finally, net loss for the fourth quarter of 2020 was $21 6 million compared to a net loss of $14 5 million for the same period in 2019.

For the full year 2020, the company's net loss was $73 8 million compared to a net loss of $50 4 million for the full year 2019.

Marc J. C. Wilson: Total operating expenses for the fourth quarter and full year 2020 were approximately $21.8 million and $75 million, respectively. This represented an increase over total operating expenses for the same periods in 2019, which were $15.5 million and $55 million, respectively. Research and development expenses for the fourth quarter and full year 2020 were $16.8 million and $57 million, respectively, compared to $12.1 million and $41.5 million for the same period in 2019. These increases in R&D spend were primarily attributable to clinical development and manufacturing activities for paltucetine, as well as progress in the company's preclinical program.

And with that I'll hand, it back to Scott.

Thanks Mark.

Before we open the line for questions I'd like to take a moment to recognize all our employees investigators sites there.

Patients around the world.

Thanks for their talent and dedication amid the pandemic, we have gone from a company that had a single clinical stage asset for.

One with an active pipeline of three clinical programs with more on the way from discovery.

As you can see on the table on this slide this progress has left us poised to achieve a steady cadence of milestones over the coming months.

At the end of the year, we expect to have initiated both phase III Pathfinder studies as well as the phase two trial evaluating <unk> in patients with net complicated by carcinoid syndrome.

We also expect to have established proof of concept for 494 and for 777 programs.

Marc J. C. Wilson: General and administrative expenses also increased for the fourth quarter and full year 2020, going from $3.4 million and $13.5 million in 2019, to $5 million and $18 million for the same period in 2020. These increases were primarily due to personnel costs to support the company's growth. Finally, the net loss for the fourth quarter of 2020 was $21.6 million, compared to a net loss of $14.5 million for the same period in 2019. For the full year 2020, the company's net loss was $73.8 million, compared to a net loss of $50.4 million for the full year 2019.

Our phase one trials will assess the ability of these candidates to modulate the relevant peptide hormone receptors.

Healthy volunteers.

This should be highly predictive of efficacy in patients.

This early stage Derisking strategy has been validated by our <unk> program, which was the driving force behind our IPO a few years ago and was executed at a time when Perl Tusa team has completed its first phase one healthy volunteer study.

Collectively we expect the execution of our clinical milestones to solidify our position as a leader in the field of endocrinology. We look forward to the year ahead and remain committed to working to improve the lives of our patients.

With that I'd like to thank everyone for joining our call today.

Well now open the call to questions.

I ask the operator to moderate.

Thank you at this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.

Unknown Executive: And with that, I'll hand it back to Scott. Before we open the line for questions, I'd like to take a moment to recognize all our employees, investigators, site staff, and patients around the world. Thanks to their talent and dedication amid the pandemic, we have gone from a company that had a single clinical stage to this one with an active pipeline of three clinical programs. And there's more on the way from Disco.

From a simple indicate your line is on the question queue. You May press star two if he would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys. Our first question is from Charles Duncan with Cantor Fitzgerald. Please proceed with your question.

Unknown Executive: As you can see in the table on this slide, this progress has left us poised to achieve a steady cadence of milestones over the coming months. By the end of the year, we expect to have initiated both phase three pathfinder studies, as well as a phase two trial evaluating paltucetine in patients with NETs complicated by carcinitis. We also expect to have established proof of concept for our 4894 and 4777 programs.

And thanks for taking my question and congrats Scott and team to a good year of progress.

Really liked the slides, they're very well organized so definitely appreciate all the detail.

Our first question, though is timelines to data data in 'twenty, three I mean, very well organized program.

For Pathfinder in phase three and I guess I'm wondering what do you anticipate to be the biggest rate limiting step will it be enrollment or identify occasion of.

Unknown Executive: As our phase one trials will assess the ability of these candidates to modulate the relative peptide hormone receptor and the Healthy Volunteer, this should be highly predictive of efficacy. This early stage derisking strategy has been validated by our PAL-2-Cetine program, which was the driving force behind our IPO a few years ago and was executed at a time when PAL-2-Cetine had completed its first Phase I healthy monitoring. Collectively, we expect the execution of our clinical milestones to solidify our position as a leader in the field of endocrinology. We look forward to the year ahead and remain committed to working to improve the lives of our patients. With that, I'd like to thank everyone for joining us on our call today.

Uh huh.

You know the best patients for this for this trial appropriate patients for the trial, but what is really governing that net 23 timeline.

Thanks, Chad I appreciate the question.

Maybe I'll take that one on the al jump in if you think I'm missing anything.

But you know patient enrollment is always a challenge in rare disease studies.

Wanted a lot from our phase II program, and we've implemented a range of things.

Things to enhance enrollment not the least of which is letting patients and their investigators know that this drug can switch patients for on standard of care too.

Operator: We'll now open the call to questions, and Alaska Operator, Amal. Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tool will indicate your line is in the question area.

The team without loss of IGF, one control so that's huge.

The other thing is that we will be using centers all.

All around the world to conduct this study.

Operator: You may press star two if you would like to remove your question from the list. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start button. Our first question is from Charles Duncan with Cantor Fitzgerald. Please proceed with your question. Again, thanks for taking my question, and congratulations, Scott and team, on a good year of progress. I really like the slides.

Probably for these studies approximately 100 different centers.

In multiple different countries.

So it's always a challenge we're going to be working hard on site activations and patient recruitment through multiple mechanisms on but we're pretty confident in the forecast for 2023.

Alan did you want to add anything.

No I agree with that they're very much Scott I also want to remind everyone that these studies are.

Charles Cliff Duncan: They're very well organized, so I definitely appreciate all the details. The first question, though, is timelines to data, data in 23. I mean, a very well organized program for Pathfinder in Phase 3. And I guess I'm wondering what you anticipate to be the biggest rate-limiting step? Will it be enrollment or identification of, you know, the best patients for this trial? Appropriate patients for the trial? What is really governing that 23 timeline

Have open label extension period supposed to them and that is always that always helps with recruitment, particularly in the rare disease state, particularly in studies, which are placebo controlled all.

All patients who are eligible and complete the trials would have an opportunity to potentially enrolling the O N E.

Okay, and then if I may a follow up.

It seems like stat, Sig relative to placebo, certainly and Pathfinder one.

Unknown Executive: Thanks, Chas. I appreciate the question. Maybe I'll take that one, and I'll jump in if you think I'm missing anything. But, you know, patient enrollment is always a challenge in rare disease studies. But we've learned a lot from our Phase 2 program, and we've implemented a range of things to enhance enrollment, not the least of which is letting patients and their investigators know that this drug can switch patients who are on standard of care to palsusetine without loss of IGF-1 control.

Is relatively low bar.

But I guess I'm wondering beyond statistical significance, what kind of response rate would you like to see in terms of clinically significant results out of.

Out of debt Pathfinder study.

Oh I'll take that.

Sure.

Well so the endpoint.

Is designed to be inherently clinically significant and this is the preferred endpoint are from the FDA and regulatory community that is percentage of patients with normal IGF one.

Unknown Executive: So that's huge. The other thing is that we'll be using centers all around the world to conduct this study. Of these studies, approximately 100 different centers in multiple different countries. So it's always a challenge. We're gonna be working hard on site activations and patient recruitment through multiple mechanisms. But we're pretty confident in that forecast for 2023.

So showing as AR increased.

Responder rate that is significant in patients who normalize for IGF. One is inherently a clinically significant and we know that as the preferred approach from the regulators.

Alan S. Krasner: Alan, did you want to add anything? No, I agree with that very much, Scott. I also want to point out, remind everyone that these studies have open-label extension periods, both of them, and that always helps with recruitment, particularly in the rare disease state, particularly in studies which are placebo controlled. You know, all patients who are eligible and complete the trials would have an opportunity to potentially enroll in the OLE.

Okay, maybe I'll just add to that.

We've shown on page two the El <unk> can achieve levels of IGF one debt.

Or.

Our equivalent or on par with those cash.

With current standard of care.

On Pathfinder one.

Charles Cliff Duncan: Okay, and then if I may follow up, it seems like StatSig relative to placebo, certainly in Pathfinder 1, is a relatively low bar. But I guess I'm wondering, beyond statistical significance, what kind of response rate would you like to see in terms of clinically significant results from that Pathfinder study? Sure.

Where we're starting with patients already on injectable.

<unk> injectable.

That are controlled we would expect very high levels of responses.

So 70% plus.

And naive patients for patients not on therapy that might be substantially lowers its been shown for the peptides.

Alan S. Krasner: Well, the endpoint is designed to be inherently clinically significant, and this is the preferred endpoint from the FDA and regulatory community, that is, the percentage of patients with normal IGF-1. So, showing an increased responder rate that is significant in patients who normalize their IGF-1 is inherently clinically significant, and we know that is the preferred approach from the regulators. Okay, maybe I'll, I'll just add to that.

So we'd expect those to be down around one third as we previously discussed for patients who are new to somatostatin analog therapy.

Yeah.

That's helpful. Scott last question moving on to the earlier pipeline 48, 94, and <unk> 47, and 77 using the stim tests in human volunteers.

Unknown Executive: You know, we've shown in phase two that calcusetine can achieve levels of IGF-1 that are equivalent or on par with those achieved with current standard of care. So in Pathfinder 1, where we're starting with patients already on an injectable that are controlled, we would expect very high levels of response, responders. So 70% plus.

I get that endocrinology or endocrine systems are fairly well.

I guess conserve I'm wondering could you anticipate using a stimulation test when you move into patients to identify patients who may be responders and perhaps you said is an enrichment marker.

Unknown Executive: If in naive patients or patients not on therapy, that might be substantially lower, as it's been shown for the peptides. So we'd expect those to be down around a third, as we previously discussed for patients who are new to, some out-of-standard analog. That's helpful, Scott. Last question, moving on to the earlier pipelines 4894 and 4777. Using the stim test in human volunteers, I think endocrinology or endocrine systems are fairly well conserved. I'm wondering, could you anticipate using a stimulation test when you move into patients to identify patients who may be responders and perhaps use that as an enrichment marker? I think that it's possible, Chas.

Yeah.

Alan do you want to.

I think that's possible chess I mean, that's something that we would evaluate after having seen a phase one healthy volunteer data. It certainly is intriguing to think of it as a.

Companion diagnostic the only thing I would say, though is sort of we know that the we know sort of the ultimate markers our debt needs to be controlled in these disease States and in addition to showing the kinds of stimulation results, where we hope show on phase one we will need to show for.

Sample in Cushings disease that the overall cortisol output is reduced usually this is measured using urine free cortisol.

Unknown Executive: I mean, that's something that we would evaluate after having seen Phase 1 healthy volunteer data. It certainly is intriguing to think of it as a companion sort of diagnostic. The only thing I would say, though, is that we know sort of the ultimate markers that need to be controlled in these disease states. In addition to showing the kinds of stimulation results we hope to show in Phase 1, we'll need to show, for example, in Cushing's disease, that overall cortisol output is reduced. Usually, this is measured using urine-free cortisol collections.

Collections.

So we'll be looking at a large host of markers, including cortisol output and stimulation type results.

Okay, maybe if I can take the.

Thanks, Joe So, but maybe maybe if I can just add a little bit to alan's comment.

I don't actually think it's gonna be necessary to interest and enrich for patients and either congenital adrenal hyperplasia or and Cushings disease.

Alan S. Krasner: So we'll be looking at a large host of markers, including cortisol output and stimulation type results. Okay. Thank you. Thanks, Chas.

We know in both cases, the patients are all responsive at the level of the adrenal to ACTH.

And therefore blocking ACTH should lower.

Unknown Executive: But maybe I can just add a little bit to Alan's comment. I don't actually think it's going to be necessary to enrich patients in either congenital adrenal hyperplasia or Cushing's disease. We know in both cases that the patients are all responsive at the level of the adrenal to ACTH. And therefore, blocking ACTH should lower adrenal steroid levels in any patient with that disease.

It'll steroid levels for.

Any patient with that disease. So I don't think we need to worry much about enrichment, we just need to get this drug into patients at the doses that we figure out here on this phase one study.

Yes.

When you go to the next question Carter.

Yeah.

Thank you. Our next question is from Tyler Van Buren with Piper Sandler. Please proceed with your question.

Unknown Executive: So I don't think we need to worry much about enrichment. We just need to get this drug into patients at the doses that we figure out here in this phase one study. Now, Cory, we go to the next question.

Hey, guys. Good afternoon, and thanks for all the updates about questions on a couple of topics I guess past Pathfinder, one is kind of about as expected, maybe some pushes and pulls relative to some other trials the dose titration on 60 minutes should ensure that you have a lot of patients controlled but I guess I wanted to ask about pathway.

Operator: Thank you. Our next question is from Tyler Van Buren with Piper Sandler. Please proceed with your question. Hey guys, good afternoon. Thanks for all the updates. I have questions on a couple of topics.

There are two I guess why haven't.

Tyler Van Buren: I guess Pathfinder 1 is kind of as expected, maybe some pushes and pulls relative to some other trials. The dose titration up to 60 mg should ensure that you have a lot of patients controlled, but I guess I wanted to ask about Pathfinder 2. I guess why didn't your closest competitor do a similar trial for approval or for the label? Is that maybe you think that they were unsure if they were going to be able to get the same level of controlled standard care, or maybe that it would be more difficult to enroll these patients, and is there anything about the study that would make it easier to enroll, maybe that shorter 12-week time period?

Why didn't your closest competitor due for similar trial for.

For approval or for the label and is that because maybe you think that they were unsure if they were going to able to be able to get the same level of control standard of care or maybe that it would be more difficult to enroll these patients and is there anything about the study that would make it easier to enroll in maybe the shorter 12 week time period and then the.

Second is.

Why didn't you do a pathfinder three looking out on.

On controlled treatment experienced patients like.

Tyler Van Buren: And then the second question is, why didn't you do Pathfinder 3 looking at uncontrolled treatment experience patients like Acrobat Edge? If I'm not mistaken, if I'm not mixing those two up? Let me take a shot at that.

Like acrobat edge, if I'm not mistaken if I'm not missing.

And those two of them.

So let me thanks, Tyler let me take a shot at debt.

So you know pathfinder to the whole point about debt is to make sure that we don't have a requirement in the label.

Unknown Executive: So, you know, Pathfinder 2, the whole point of that is to make sure that we don't have a requirement in the labor that says patients need to have tried or responded to Injectable Therapy before they could use Paltusatine. So that's why we study treatment naive or untreated patients. I mean, why put some poor patient through an unnecessary round of injectable therapy? Instead of just putting them immediately on paltucetine once they're first diagnosed and ready for medical care, so that was the motivation behind Task Finder 2.

That says patients needs to have tried or respond to the.

The injectable therapies.

They could use pellets used the team. So that's why we study the treatment naive for for untreated patients I mean, why put some for patient through an unnecessary round of injectable therapy.

Instead of just putting them immediately on <unk> once there.

First diagnosed and ready for medical therapy, So that was the motivation for hot behind Pathfinder too.

Now Pathfinder 345.

Unknown Executive: Now, Pathfinder 3, 4, 5, I think, you know, 2 is enough for now. In particular, we've already shown in Phase 2 that in those patients on medical therapy that had not achieved normal, we could keep their IGF levels the same as the standard of care. So, I consider that box already checked.

I think you know tooth enough for now.

In particular, we've already shown in phase two but in those patients on medical therapy that has not achieved normal that we should keep their IGF levels for the same as the standard of care. So on.

Consider that box already checked.

Unknown Executive: But I do think, you know, as part of our commercial effort, in a couple years, we may do additional Phase 4 type studies to help flesh out the label, provide guidance on usage, in combination with other therapies, for example. And I'm excited for the long time we have to spend with this molecule. Because remember, we've still got patent coverage up to 2014.

But I do think you know as part of our commercial effort.

The years, we've made two additional phase for types of studies to help flesh out for label will provide guidance on usage and <unk>.

In combination with other therapies for example.

And I'm excited.

We're excited for the long time, we have to spend with this molecule.

Because remember we've still got patent coverage up to the 20th forties low room.

Unknown Executive: So we're going to invest in getting the best possible label, and the best possible guidance to physicians and patients for this molecule. Understandable. Thanks for taking the questions. Thanks, Tyler.

They invest in getting the best possible label.

Possible guidance to physicians and patients in this molecule.

Understood. Thanks for taking the questions.

Okay.

Thank you. Our next question is from Joseph Schwartz with SBB Leerink. Please proceed with your question.

Operator: Thank you. Our next question is from Joseph Schwartz with SVB Learing. Please proceed with your question. Hi, I'm Juri Dowling with InfoJail.

Hi, I'm Jerry dialing in for Joe Thanks for taking our questions. I was just wondering if you could just give a little bit deeper on your past Pathfinder true.

Joseph Patrick Schwartz: Thanks for taking our questions. I was just wondering if you could just dig a little bit deeper on your Pathfinder 2 trial duration. I was just wondering where the two weeks came from and also, do you think that's enough to capture the efficacy of PAL215 in treatment naive patients? jury.

Trial duration I was just wondering where the true week, where that came from and also do you think that's enough to capture the efficacy of patchy 15 in treatment naive patients.

Gerry Thank you Alan why don't you answer that question.

Alan S. Krasner: Thank you. Alan, why don't you answer? Yes, I just wanted to clarify the trial duration for PATHFINDER-2. The treatment duration is three months. And yes, that's adequate time for peltucetine to reach a steady state and for the IGF-1 response to peltucetine to reach a steady state, as evidenced from both our Phase 1 and Phase 2 data to date. These are patients who are untreated and start out with high IGF-1 levels.

Yeah.

Yes, I just wanted to clarify the trial duration for Pathfinder choose the treatment duration is three months.

And yes, that's adequate time for <unk> to reach a steady state and for the IGF. One response to Perl Tusa team to reach a steady state and this is evidenced from both on phase one and phase two data to date.

These are patients who are untreated and start out with high IGF one levels, it's a placebo controlled trial.

Alan S. Krasner: It's a placebo-controlled trial, so it's appropriate to, you know, limit the duration to that which is necessary to show the treatment. Three months is very reasonable for that purpose.

So it's appropriate to limit the duration, our two debt, which is necessary to show that treatment effect three months is a very reasonable for that for that purpose.

Joseph Patrick Schwartz: Okay, great. Thanks for clarifying that. Yeah, and as a reminder, they'll all also be eligible, or should be eligible for, an open-label extension to provide additional data on long-term care, durability of response, and safety. And that's true for all our phase two and phase three studies. Okay, and then I was just wondering if you could just help set expectations with your new formulation that can be dosed twice as high. You know, how are you thinking about this?

Okay, great. Thanks for clarifying that.

Yeah, and as a reminder, there will also be eligible there.

There should be eligible for an open label extension to provide additional data on long term.

The ability of response and safety and that's true for all our both phase II and phase III studies.

Okay, and then I was just wondering your schedule for help set expectations with your newest formulation that can be dosed twice as high at all or how are you thinking about this.

Alan S. Krasner: Translating to efficacy in your Phase 3? Are you expecting it to be higher? Or, you know, like, what percentage of your patients do you think you're going to have to get to the higher dose to get meaningful efficacy? So in our phase two program, we showed that 40 milligrams should be adequate for the majority of patients. But we added 60 milligrams just for those patients, which we expect to be smaller proportions that may need a little higher exposure levels or weren't getting the full exposure they needed out of 40 for one reason or another.

Translating to efficacy in your phase III or you are expecting it can be higher or you know like what percentage of current patients do you think you're going to have to.

Debt to the higher dose to.

Get a meaningful efficacy.

Yes.

<unk> two program, we showed the 40 milligram should be adequate for the majority of patients.

But we added 60 milligrams just for those patients.

Would you expect to be a smaller proportion that maybe at a little higher exposure levels or weren't getting the full exposure they needed out of 40 for one reason or another.

So again the goal is to provide adequate coverage for all of the patients from the study.

Alan S. Krasner: So again, the goal is to provide adequate coverage for all the patients in the study. Okay, great. Thank you. Our next question is from Douglas Tsao with H.C. Wainwright. Please proceed with your question.

Yeah.

Okay, great. Thank you.

Our next question is from Douglas Tsao with H C. Wainwright. Please proceed with your question.

Hi, good afternoon. Thanks for taking the questions just I know after the phase two data there was some discussion about potentially using I think going up to an 80 milligram dose.

Douglas Dylan Tsao: Thanks for taking the questions. I know after the phase two data, there was some discussion about potentially using, I think, going up to an 80 milligram dose. You know, I'm just curious why, ultimately, you sort of settled on 60, and also, I think with Pathfinder 1, I saw that you were going to measure the primary endpoint at three time points, but in Pathfinder 2, it looked like there were only going to be two endpoints. So I'm just curious why you're sort of using those two different kinds of benchmarks, if you will. Thanks, Alan. Do you want to answer that?

I'm just curious why ultimately you sort of settled on 60.

And also I think with Pathfinder, one I think I saw that you're going to measure the primary endpoint on at three time points.

But Pat on your two it looked like it was only gonna be true end point. So I'm just curious why we're sort of using those two different sort of benchmarks. If you will.

Thanks, Doug.

You want to answer that.

Alan S. Krasner: Sure, on the latter question, so the Pathfinder 2 study is a shorter treatment period, shorter periods of the final dose stabilization period, so we're sort of more limited in terms of our time frame there, and generally 2 or 3 to constitute an average IGF-1 is adequate in this kind of setting. I'm sorry. What was your first question, Doug? Which is just in terms of the dosing that you did, because I think there was some conversation about testing higher doses, you know, after the first studies, and it doesn't sound like you've, and I think sort of maybe the 80 was even potentially going to an 80 milligram, and obviously, it doesn't seem like you're going there. So just curious about what was sort of the decision tree in terms of coming to that decision, you know, reaching that.

Sure on on the latter question. So the Pathfinder true study is a shorter treatment period, a shorter periods of the final.

Does a stabilization periods. So we're sort of more limited in terms of our timeframe there and generally two or three are too.

To constitute an average IGF one is adequate in this kind of setting.

And I'm sorry, what was your first question Doug.

We're just in terms of the dosing that you did because I think there was some conversation about testing higher doses you know after the first studies in and it doesn't sound like you've I think.

Sort of maybe the 80 was even even potentially go into an 80 milligram and I and obviously it doesn't seem like you're going there. So just curious about what was sort of the decision tree in terms of coming to that decision you know reaching that.

Yeah. So this is all based on dose response and exposure response modeling work that's been a done net and shared with the F. D. A and are we really believe that as Scott mentioned 40 milligram should cover the vast majority of patients and only a small number of outlier patients are would be increased.

Douglas Dylan Tsao: Yeah, so this is all based on dose response and exposure response modeling work that's been done and shared with the FDA. And we really believe that, as Scott mentioned, 40 milligrams should cover the vast majority of patients, and only a small number of outlier patients would need increased exposure. And 60 milligrams should cover that degree of exposure needed in that setting, according to the modeling.

Or is your and 60 milligram should cover that degree of exposure needed in that setting according to the modeling.

Okay and then just one final question just typically when you have an untreated patient going on to an injectable therapy typically how long does it take for them to reach biochemical control.

Alan S. Krasner: Okay, and just one final question. Typically, when you have an untreated patient going on to an injectable therapy, typically how long does it take for them to reach biochemical control? Well, typically, you would typically give long-acting injections once per month. And so typically, to reach steady state, you would wait to assess the full effect after three injections are about three months in clinical practice. In the case of Paltucine, which is a much more rapidly absorbed agent and taken on a daily basis, the time to steady state effect of MPK would be much shorter than that.

Well, so typically you would.

Yeah, typically the long acting injections are given once per month, and so typically you to reach steady state you would wait to assess the pull effect after three injections for about three months in clinical practice.

On a case of a participant in which is a much more rapidly absorbed agent and taken on a daily basis.

<unk> to steady state.

The effect and PK would be much shorter than that.

Okay, and presumably along those lines just given your ability to to dose titrate get them much quicker should give you a much longer window on it than what you typically see with an injectable.

Douglas Dylan Tsao: And presumably along those lines, just gives your ability to dose titrate much quicker should give you a much longer window than what you typically see with an injectable. I would almost say, Doug, this is not exactly what one would traditionally mean by dose titration because we're starting at a dose that we expect to be efficacious for the vast majority, and then we just offer a higher dose just in case for those patients who might need a little bit.

On a much longer window to assess.

Or or not or you have more debt relative to that three months period endpoint, you know to reach that sort of step there your optimal steady state. If you will does that makes sense.

Although I would say almost this is not.

Not exactly what Mike wanted to traditionally mean by dose titration, because we're starting at a dose that we expect to be efficacious for the vast majority of applications.

And then we just saw for a higher dose just in case for those patients who might need a little bit more.

Douglas Dylan Tsao: It's not really dose titration; we're just trying to hit it with the right dose the first time, and then we have a backup plan in case it's not correct. Scott, why was the decision to start with 40 and not, potentially, sort of just given how quickly you can pivot, start with 20 and then move to 40? Well, there's just no reason to, you know, I'm thinking ahead to when this is on the market.

So you know.

It's not really dose titration, we're just trying to hit it with the right dose. The first time and then we have a backup plan in case, it's not quite in a day.

It's got why was the decision to start with 40 and not potentially sort of just given how quickly you can COVID-19 start with 20, and then moved to 40.

Well, there's just no reason to you know I'm thinking ahead to when this is on the market.

Unknown Executive: And there's really no reason for patients to risk a period of lack of control, so we start directly with 40. Now there is a nuance in Pathfinder 2 where we have a brief period where they have a starting dose of 20 milligrams, and then they go to Ford.

And there's really no reason for patients to.

The risk of period of lack of control.

So we start directly with poorly now there is some nuances pathfinder too where we have a brief period, where they have a starting dose of 20 milligrams and then they go to for.

Unknown Executive: And that's simply because patients who are new to somatostatin analogs tend to have some GI side effects the first week or two of therapy, and so we just wanted to give them a little more gentle introduction to the drug. Okay. Thank you. Thanks. Our final question is from Daniel Wolle with J.P. Morgan. Please proceed with your... Good afternoon, guys. This is Daniel speaking on behalf of Jessica Fye.

And that's simply because in patients who are new to somatostatin analogs.

Tend to have some Gi side effects, the first week or two of therapy and so we just wanted to give them a little more gentle introduction to the drug.

Okay.

Thank you.

Our final question is from Daniel Wong with Jpmorgan. Please proceed with your question.

Hi, Good afternoon, guys. This is Daniel for Jessica Fye, Thanks for taking on a question.

Jonathan Patrick Wolleben: Thanks for taking our question. We're starting maybe with Pat's Finder Juan. Is there a washout period after the screening period right before the nine-month treatment period is initiated? I don't know.

First starting maybe with Pathfinder, one is there a washout period after the screening putting it right for the nine month day treatment periods initiate it.

Hi, Dan do you want answer that on.

Alan S. Krasner: You want to answer that, Alan? No, no, these are patients in Pathfinder I who are on octreotide or lanreotide, and we screen them, and we find that they have normal IGF-1, and then they randomize to peltucetine versus placebo at the time they're due for their next injection. So no, there's no washout involved in Pathfinder I, you know, initially. But this is a nine-month study, and during that period, their pre-existing injections will wash out as the peltucetine is taking over control of IGF-1.

No no. These are patients and Pathfinder, one who are on octreotide or Atlanta, we had tight and we screen them and we find that they are have a normal IGF, one and then a day.

Randomize to Perl to sitting versus placebo at the time they are due for their next injection. So no theres no wash out involved.

In Pathfinder one.

You know initially but this is on nine months study and during that period their preexisting injections will wash out as the Perl to sitting is taking over control of IGF one.

Got it Okay, and then regarding the rescue criteria definition is it dependent on the two consecutive IGF, one grant them equal to 1.3 times upper limit normal and exasperation of symptoms or is that just family or on day two consecutive IGF. One is of course.

Alan S. Krasner: Okay, and then regarding the rescue criteria definition, is it dependent on the two consecutive IGF-1 greater than equal to 1.3 times the upper limit normal and exacerbation of symptoms, or is it just failure on the two consecutive IGF-1? It's based on both IGF-1 and symptoms.

It's based on both IGF, one and symptoms and this is a precedented a criterion used previously for the most recent acromegaly drug approval.

Alan S. Krasner: And this is a precedented criterion used previously for the most recent acromegaly drug approval, so we do know this is a successful way to manage patients safely through these kinds of placebo-controlled trials. Okay. And then for Pathfinder 2, given that these patients are not well controlled, does it make sense to go against placebo? Why not an active agent in the control arm to create a stronger efficacy profile for participants? Well, we do expect them. You see, these are untreated patients, so once they're treated with Feltucidine, we do expect them to achieve control.

So we do know this is a successful way to manage patients safely through these kinds of placebo controlled trials.

Okay, and then for pets find your two given that these patients are not well controlled doesn't make sense to go against placebo why not an active agent and the control arm to create a stronger efficacy profiles for participating.

Well, we we do expect them you see these are untreated patients. So once they are treated with Perl to city and we do expect them to achieve control.

Alan S. Krasner: I would say that, you know, in terms of why it's a placebo control, well, it's clear that placebo-controlled studies are simpler designs that help the regulators assess safety more accurately related to the drug. We do know that the regulators, particularly the FDA, are more comfortable with placebo-controlled design trials. This kind of trial in this kind of patient population is also a precedented phase three trial for another approved acromegaly product, so we think scientifically it's the most rigorous.

Yeah, I would say debt.

In terms of why is it a placebo control well, it's clear that placebo controlled studies give a simpler designs that are help the regulators as a safety a more accurately related to drug we do know that the regulators, particularly at the FDA are more comfortable with placebo.

Control design trials.

This kind of trial in this kind of patient population is also a precedented.

A precedented at phase III trial for another approved acromegaly product. So we think scientifically it's the most rigorous will give us the clear answers we need it in a reasonable period of time and we know it is a ex most acceptable to the regulators.

Alan S. Krasner: It will give us the clear answers we need in a reasonable period of time, and we know it is most acceptable to the regulators. But I'd also add, Daniel, that we've got a great deal of back-up, baseline control data already. Acrobat Edge Study, and we'll be having, in Pathfinder 1, baseline control data to compare with paltucetine as well. So there will be plenty of active control, Comparison, just not a head-to-head in these. Got it. Okay. And the last one. What's the rationale for Pathfinders?

But I'd also add Daniel that we've.

We've got a great deal of back.

Baseline control data already with the acrobat edge study.

And we'll be having and Pathfinder, one baseline control data compare with Perl tusa team as well so there'll be plenty of active control.

Comparison, just not a head to head in these current studies.

Yeah.

Got it Okay, and then last one what's the rationale for Pathfinders.

Jonathan Patrick Wolleben: Well, sorry, that has been answered, but the other question is, given the shorter duration of the treatment period for PATS Finder 2, how come data is still reaching out in 2023 along with PATS Finder 1, which has a longer treatment period? Well, studies are always controlled by a mix of recruitment rates and treatment periods. We did pretty extensive feasibility studies on both studies at sites around the world. So that's why we started Pathfinder 1 first; the treatment period is a little bit longer. And in Pathfinder 2, it's a little shorter.

Oh, sorry on the debt.

That has been answered but the other question is given the shorter duration of treatment period for Pathfinder too.

How come that are still beating out in 2023.

Along the pipeline for one because that has a longer treatment period.

Well studies are always controlled by a mix of recruitment rates on treatment period.

We did a pretty extensive feasibility on both studies at sites around the world.

So that's why we started pathfinder, one first the treatment periods a little bit longer.

And in past land or two it's a little shorter so that's why we'd expect them to finish at about the same time.

Alan S. Krasner: So that's why we expect them to finish at about the same time. Great, thank you very much. Thank you. We have reached the end of the question and answer session, and I will now turn the call over to Dr. Scott Struthers for closing comments. Thank you, everyone. I just wanted to thank you one more time for joining us on the call, and we look forward to continuing the advancement of our clinical and discovery programs.

Okay, great. Thank you very much.

Thanks, Thank you.

We have reached the end of the question and answer session and I will now turn the call over to Dr. Scott Struthers for closing comments.

Thank you everyone I just wanted to thank you one more time for joining us on the call and we look forward to continuing the advancement of our clinical and discovery programs.

Alan S. Krasner: We'll keep everyone updated along the way as best we can and have a safe spring. Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation, and have a great day.

We'll keep everyone updated along the way as best we can.

And have a safe spring. Thank you.

This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation and have a great day.