Q1 2021 Arena Pharmaceuticals Inc Earnings Call

Good day, everyone and welcome to Arena Pharmaceuticals, Corporate conference call. This call is being recorded I will now turn the call over to Mr. Patrick Malloy, Vice President Investor Relations at Arena Pharmaceuticals. Please go ahead Sir.

Great. Thank you Delfin and good afternoon, everyone. Thank you for joining us today, and we hope you had a chance to review the press release, we issued this afternoon announcing our first quarter 2021 financial results joining.

Joining me on today's call are Amit Munchy, our president and Chief Executive Officer, and Laurie Stelzer, our Chief Financial Officer.

Before we begin I'd like to remind you that we'll be making forward looking statements that involve risks and uncertainties about our goals expectations plans beliefs.

Of events or future results, including those risks and uncertainties related to our pipeline financial projections 2021 financial guidance and the COVID-19 pandemic and its potential impact on our business forward looking.

<unk> involve certain assumptions risks and uncertainties that may be beyond our control and could cause actual results to differ materially from these statements. A description of these risks can be found in our earnings press release, and our latest SEC disclosure documents. All forward looking statements are based on information currently available to <unk>.

Arena, and we disclaim any obligation to.

To update these forward looking statements now I'd like to turn the call over to Amit Munshi Amit.

Thanks, Pat and thanks, everyone for joining the call today and again as Pat mentioned I Hope you had a chance to review the press release.

Aligning our strong progress during the last quarter as we did last quarter, we are going to move directly to Q&A and hand, and we'll jump right to that and be able to spend more time, there so with that on one hand, it back to the operator to open the Q&A portion.

Yeah.

Thank you Sir.

Okay. Just a reminder for all participants.

You need to ask a question just please press star one.

Again, Please press star one and if you need to withdraw your question. Please press Star zero.

Now, let's pause for a few moments to compile the Q&A roster.

Yes.

Yeah.

Okay.

And our first question.

It's coming from.

Lithia Young from Cantor Fitzgerald go ahead your line is open.

Yeah.

Hi, Thanks for taking my question. This is neena on for them EPS.

So we're wondering as you continue to mine.

And you see we just wanted to get your perspective on how you're navigating the COVID-19 environment, while running this trial and it's on have there been any items fine tuned and in light of that thanks.

Great. Thanks for your question.

We've been monitoring it from day one.

Somebody with me have me talk before about how we took on trials awful lot of magic and put them on to Emmanuel We've had a team monitoring every patient every day every site across.

40, plus countries and over 400 sites.

And we've been monitoring for both patient safety.

As always our primary concern and we've been monitoring for study conduct study integrity data integrity.

So we continue to monitor that we were able to complete the enrollment in.

You see 52, we're on track on UC 12.

And as we have for the last Oh assumed last 12 14 months now.

We continue to measure it.

Monitored it very very patient.

<unk> level.

And site level and that just ensures that.

Any impact that COVID-19 could potentially have is mitigated.

All time so.

We haven't we haven't encountered.

The type of COVID-19 impact simply not because hope it hasnt impacted trial, it's simply because we've been able to manage through the complexities over the last for teams.

Okay perfect. Thank you.

Yes.

And our next question coming from Kennan Mackay from RBC go ahead.

Hi, Thanks for taking the question.

Two questions actually on it's more around sort of the evolving.

I think the point.

From both the <unk>.

Atopic derm.

You see I was just wondering what what kind of perspective you had.

On sort of be the potential impact on <unk>.

Modern.

So denim on label.

Could have on for the future approvals in the S. One.

Yes.

Is there any risk of.

A black box warning there do you think and.

They are different properties.

Where I'm from the efficacy doesn't quite look.

I think we're as good as what we've seen from previously from the trials not just wondering if.

Any word from the earn back for color.

Position depends on and then separately in terms very similar question, but much more so around the debt.

Two JAK inhibitors.

Based on whether there are any read throughs there to conduct lumpy costs. Thank you.

Sure Hi, Kevin Thanks for the question.

On the impact on goes on them on label, we haven't seen their full label in.

Also quite as they don't have approval, yet so difficult to comment on on what it could be.

On the risk of Black box is an interesting question. The S. One piece don't have a black box across the board.

Even the first generation compounds, so I think.

It was on them on.

It does not have a black box relative to the <unk> label. So I find it difficult to believe that we would expect day.

A black box in and also glad he's nothing untoward happened and do you see that.

Hadn't previously seen with.

In the MS setting so across the board the S&P modulators have a cleaner label.

On the JAK inhibitors.

That's certainly true that we've seen so far and we expect that to continue being true.

We've also seen no differences in first dose monitoring labels.

On the other months in part on that do not have first dose monitoring requirement.

Despite having a pretty dramatic first dose heart rate effects as well as well as on <unk>.

Conduction abnormality so.

We're encouraged by the way the agencies viewed.

The S&P modulators relative to the Jac classes, and then net bleeds really into the your Derm question, which is you know.

What are we seen with the JAK inhibitors and broadly whether it's Jack one Jack for me take to all the various pathways within the JAK class.

What we're seeing is continued side effect profile that has discouraged physicians from large uptake in the ulcerative colitis and IBD space. Despite the initial schooling progress on the rheumatoid arthritis space.

We know the dermatology community is very sensitized to safety profiles.

So we were.

We'll see what those look like once their once those indications are up and running in those markets.

We'll see what we.

We see what those labels look like but across the board as Youre well aware the risk of the malignancies, the black box warnings on VTS malignancies serious infectious events on.

Those are pretty dramatic across the entire JAK class and that include Jacqueline JAK two three did tick Tuesday, all fall in that same category. So.

Again, we're waiting to see how the agencies work through those issues in terms of labeling and we'll be able to provide more color. Once once we have more clarity.

Yes.

Sounds like raw figures on the same thing thanks, Amit Greg could you hear from Neil Thanks for doing this.

Thanks, Ken really appreciate it.

And our next question is coming from Jason Joe Barry from Bank of America. Please go ahead Sir.

Hi.

Chi on for Jason Thanks for taking our questions.

Maybe just a couple on the.

So part a of debt strong suite out come out later this year.

I guess the first question is on the primary endpoint can you confirm you're looking at both the endoscopic response as far as debt for that corporate mission see di score and whether we can expect for setups.

They are in the top line release or maybe it's a little too early to tell.

If that's the case, which of the two endpoints do you feel that's more important from a regulatory approval perspective and separately from a commercial perspective I guess the second question on the same study is that based.

Based on the kind of cognex other clinical trial sites for the trial. So far what would you expect that patient mix to be between biologic naive and biologic with factory a baseline would you expect that patient mix a bit similar to a 50 50 upset with phase II study of wholesale commodity crops.

Hey, Chi how are you good.

I think I hear from you and thank you for your questions.

On the primary endpoint, we are looking for both CDA.

<unk> endoscopic improvement will be reading both of those out.

As far as which ones more important from a regulatory or commercial point of view I think that's probably the wrong question as it relates to a phase II study the right question and the phase two is.

Which gives us confidence to move to that next stage of development and in this case, it's really both.

And we'll be looking at that relative to other agents in the class b to lose them add will.

We will be looking at this relative to the dawn on my data.

And most important for US is the fact that we're taking two doses forward into crohn's and so we're going to be looking for dose response across both of those indications. So.

Again, the purpose of a phase two study, especially on <unk>.

<unk> III study.

Defined as our sub study is really to help inform and guide the next stage of development.

For the study as far as the patient breakout it's tough to tell it's too early.

The sites are relatively uniform.

So we'll see what percentage of patients are naive.

What percentage of patients pretreated, but it's it's a bit too early for us to be able to comment on that.

Awesome. Thank you so much stickier for me thanks Keith.

Sure.

And our next question is coming from MS. Jessica Fye from Jpmorgan go ahead.

Hey, guys. Good afternoon, thanks for taking my questions.

Can you give us a better sense.

On the back half of the year, we should expect sub study eight data.

Peter I'm trying to get a sense of how much time, there will be between that update from the phase III elevate readouts and then on <unk>.

On the studies can you remind us whether we should expect growth phase III to be released together or sort of inevitably go read on it slightly.

Thank you.

Thanks, Jeff.

On the we've said before the end of the year simply because we're just we don't know how the enrollment kind of evolves.

But as soon as we complete enrollment in that trial.

We will announce that as we have historically.

That will stop the clock toward the.

The subsidy a data readout.

So all we've guided to right now at the end of the year.

Probably the prudent thing to do.

And then the we expected readout, both 52 and 12 at the same time in aggregate so.

And separately and with all the details that we've spoken about before but you will be announcing all of that together.

Great. Thank you.

Yes.

And our next question is coming from Mr. Joseph Schwartz from SBB Leerink go ahead.

Thanks very much.

Really liked this call format focusing entirely on Q&A once again.

Being in so many important ways guys.

So maybe a couple of questions on your ongoing alopecia, Arizona study.

Could you start by talking a little bit about the study and how youre thinking about the different patient types and how you'll be analyzing the data in order to determine who is the best to include in phase III.

Yes, Thanks, Joe and thanks for the compliment on the format. We figured you guys are all completely able to actually read a press release. So we didn't need to have on our entire script basically reiterate the press release.

The.

The study is a proof of concept study right now it's 36 patients at a single dose.

We will be having both alopecia.

Every other to tell us and universe ALS patients on all three subsets of patients in that but it's a small study at 36 patients.

Even with the.

On a randomization scheme that puts more patients in the in the treated arm youre not going to have a lot of patients who need so.

I think it's important to remember that in almost every one of these cases, it's the first time.

This class of drugs is going into these patients. So we want to make sure that there is a signal we wanted to make sure that.

There's a patient benefit and these patients do react very differently. These trials alopecia areata patients with solid scores, let's say, let's say in the 75% range.

Versus in the 90% to 95 per cent or or higher is it.

So tell us and universality.

All react very differently we've also.

Experts in the field talk about how these might actually be slightly different diseases, where different phenotypes underneath so again when you are taking up.

A drug that has never been taken into disease area.

Into an exploratory phase Iia study, it's directional so I just wanted to set that expectation with the 36 patient trial.

What we will see out of that but to your point.

If we start seeing the effect across all groups versus effectively after one group.

That will begin to inform where we take our phase III study.

Okay. Thanks, that's helpful and we were wondering if some of these things too.

So if I could just ask for more on this program I was curious to what extent is the salt score a subjective measure that might be.

And then Mike just to introduce some potential for natural variability due to different physician interpretations for are you doing anything to control for.

That potential confound or anything else.

That you've identified going into the study or during the study.

That you could might be able to control for.

So I think for.

Physicians that are used to doing these studies are used to doing salt scores and understanding.

<unk>.

How to actually calculate percentage of body area that has is subject to alopecia.

In whichever form so.

Less worried about that and.

The bigger worries, if you push too far down on on scale, meaning more mild patients for example.

In the alopecia area setting alopecia Areata setting you do get a lot of sponsors.

Spontaneous remissions you get hit.

Yeah.

More variability in that population, it's very it's much more difficult to manage.

Placebo signal in that population. So that's why we've stayed to the more severe alopecia areata patients and then the universes universality until pallas patients, which are of course, the most severe so.

By doing that you get a very good sense of whether the drug is active or not and I think I think that's the right thing to do for phase.

Two a proof of concept study.

Very helpful. Thank you.

Yeah. Thanks, Joe.

And our next question is coming from Nina between Garg from Citi Go ahead.

Hey, guys. Thanks for taking my question.

Just curious if you could talk a little bit about kind of the next steps for the controlled release formulation of <unk> and when we could see kind of some.

Okay. Thanks.

For high Neena. Thank you.

See our program as you recall was designed.

To further improve upon our best in class cardiac.

Act.

As you saw from the atopic Derm study on our part.

Heart rate effect placebo adjusted net trial is just under 70 mean change without a titration schedule. So we're in a very good position the.

The original premise or the continued premise of this is that we can diminish.

Diminish that for SUNS heart rate effect, even further without changing the overall PK PD.

And.

The.

Chemical effect of the drug and we originally did the work with assumes liquid formulations for the next step in the.

Process was to develop a whole slew of different.

Solid dose formulations.

And for patent reasons, we don't discuss on.

All of our various strategies in terms of how we're doing that.

On those trials are ongoing and.

As soon as we have a game plan coming out of the strength we're looking at.

Multiple dose configurations release formulations.

On theirs.

The.

It's the exploratory group here is quite substantial in terms of the number of variables that we're looking at and so we're doing that to make sure that.

There is some meaningful benefit and be.

Then something that debt.

We definitely want to spend money and go forward on.

Everything so to date has been incredibly encouraging and we look forward to share more data as as these multiple experiments conclude.

Great. Thank you yes.

Yes. Thanks.

And our next question is coming from Mr. Jason Butler from JMP Securities go ahead.

I just wanted to for Jason Thanks for taking our questions just how day.

Can you on on the satellite.

Sorry for Janus.

Just for the voyage trial, if you could give us any updates on the.

Patient enrollment status and then more broadly.

On.

And for the mechanistic rationale.

For <unk> and <unk>.

Predictive preclinical models and then what's the market opportunity in your view thanks.

Sure so.

Couple of things, let me start with the enrollment we don't provided enrollment updates as a general rule.

It's a slippery slope as you guys know.

So that study is.

Is moving forward and.

And enrolling.

In the <unk> setting the reason we picked the <unk> early on is really the same rationale for why we picked a topic derm as potential indications.

And again in both of these cases to the previous question that was asked is the first time in S&P modulator has been taken into these settings.

And it was really born out of a couple of key observations one was the bi directionality between atopic derm and ulcerative colitis patients.

Other risks develop UC and UC patients for the higher.

At risk to develop atopic derm. So there were some clear bi directionality and as we went and ran a whole series of experiments.

We realized that the cell types that we were looking at in the cell types that we will.

On the biology, we're procuring.

Whether we're looking at for a five year <unk> mass sales were very common to both atopic derm and <unk> and in both cases these are diseases of degraded barrier function.

You see the same type of barrier function degradation that you see some type of antigen challenge in the case of food in the case of.

Atopic derm, probably a bacterial Lin song you see dendritic cell uptake.

Did you look cell migration and we've shown dendritic cell migration reduction in bulk.

In both types of settings.

You see the activation of T lymphocytes CD for CBA, then you should be activation th, one and <unk> T cells.

And as a consequence, all the subsequent cytokines and whether they're th th one on.

The the the buyout the psychology of both the diseases actually strikingly similar and the animal models.

On showed reduction across all these very specific cytokines.

As well as a set of activity on the eosinophils and mast cells. So.

We've also tried <unk> mod.

Derivative of the crowds of Mod in Eh asthma model, we've disclosed that previously I believe that's been published.

And that compound showed activity again against all the TT cytokines eosinophils and mast cells. So in all of these diseases that have this overlapping seven pathology, we've seen the same effect over and over and over so.

It.

Was provocative enough for us to kind of moving this direction today there is about.

Approximately.

150000 patients from United States, probably three to 400000 in.

The addressable markets globally with <unk>, we think the incidents and that will continue to grow as the disease is better understood.

We know that a disproportionate amount of GERD patients on.

Recalcitrant and are no longer responsive to high dose <unk> and we.

We think over time, a larger subset of those patients are likely to be.

Ah patient.

So again as the disease is better understood as diagnostics and diagnosis becomes better.

I think youll see more recalcitrant GERD patients actually have an autoimmune basis and there are many of those cases, we'll see.

We'll see something that fits the definition of <unk>.

We're incredibly excited about it.

Several biologics being studied in the space.

And of course from the once a day oral will think will have a significant leg up there.

Okay. That's great. Thank you.

Yes. Thanks.

And our next question is coming from Mr. Patrick <unk> from H C. Wainwright go ahead.

Thanks, Good afternoon, I'm, just actually a couple of follow up questions on on <unk>.

Just wondering in the in the voyage study is there a particular level of knockdown other center films.

You'd be looking for because you know on the context of we've seen with other mechanisms in biologics, where we see the knockdown of set ourselves, but we actually don't see much for the benefit in some cases on symptoms and then secondly, just on.

On the ex Q score endpoint.

Is the study powered to show a certain level of improvement on symptoms.

Or or what would you be looking for in terms of sometimes to give you confidence to advance to the phase III procure a phase III trial.

Great. Thanks, Patrick we Havent disclosed the powering assumptions ran that study so I'm going to steer clear of that one.

But we are going to be looking at symptomatic scores at the end of the day I think it's far less important whether eosinophils present and far more important whether you havent symptomatic relief from these patients.

And I think that's been the general consensus of experts in the field recall that yes.

<unk>.

Are thought to be one of the last cell types that are present in the into the space and then they trigger the THF beta Cascade, which then results in the fibrosis that occurred in the disease, but well ahead.

Of that you've got.

Ah Cascade it looks again very similar to the atopic derm Cascade, where you've got some insults you've got antigen presenting cells dendritic cells, specifically you've got.

The impact of.

T cells, and then <unk> two cytokines that all of that happens upstream of the Sunoco, Inc, and it's interesting.

The disease called Eosinophilic esophagitis, because you on on histology.

You look for eosinophils and its the diagnostic marker and the definitive marker.

Literally accounts the number of eosinophils.

But what's much more important is the symptomatic relief in all of these other cell types are involved in the trials might as an opportunity to work across all these other cell types then.

It's our.

Our hypothesis going into this study.

That will be much more focused on symptom relief rather than just counting one specific type of cell type and just because it's in the name of the disease doesn't mean, it's the thing that's causing all of the upstream and downstream.

Implications for that for the condition I think.

Think you really have to take a much more holistically. When you look at histology UC CD for CDA T lymphocyte GC.

Macrophages you see other other types of sales beyond just eosinophils in the specific disease. So we think there is much more going on in this condition and we think that'll play.

That will play to <unk> strength in terms of its mechanism of action.

Got it that's really helpful. And then just a follow up on for trucks amount in UC and Crohn's looking ahead, a few years here I'm wondering if you can just discuss the commercial launch plans specifically on you'll see as this could be the first potential on the tuition on our label and.

Just remind us again the intention to launch this on on your own or would you or would you look to partner.

Yes, so the intention and the game plan.

Has been and will continue to be launched this on our own.

The U S in Europe, and we're working through Japan plans now in terms of.

What are what do we need a strategic partner in Japan or <unk>.

Joint venture or whether we go it alone expand as these are open questions for Japan, but for the U S and Europe.

We've stated previously that we intend to go it alone and.

It's been part of our game plan for quite a few years now we've had a commercial team on the medical affairs team on.

On the ground for for upwards of three years now.

I think it's important for companies, who intend to do what we do which is to build a company for long period of time.

To be able to build.

Commercial infrastructure and launch.

And what that means is that you have to start early and we've had the luxury because of our cash balance sheet.

To invest early we've had 50 EMS sales on the ground for almost a little over two years now across U S Europe and Asia.

We've had literally thousands of interactions with clinical sites clinical investigators experts in the field.

Helping them understand the role of the <unk> S&P modulation broadly and travelling months specifically.

We've used that MSL organization to help.

Enrol, our clinical trials get people excited about.

Martin.

While studying this in this context is important.

For the future of IBD and we've had tremendous success in just being able to inc.

Engage the market and engage the market.

At a very local level.

And we think we made that investment early alongside building the commercial parts of the commercial organization getting deep insights into the market.

On which led to the building of the Gladiator program for example.

Perry approval study.

Those are examples of investments in long term commercial success that most small companies don't have the luxury of doing and we've had the luxury of doing it and it's really critical it's absolutely critical and we see so many small companies that.

Really won't hire or begin to hire commercial infrastructure until close phase III and it's really too late.

Yeah.

The success or failure of a launch happens years before the product actually gets to the market.

We've had dozens of peer interactions we're working with.

Multiple peer groups.

Around the country and academic organizations using artificial intelligence systems to build.

Value based systems, and and understand how we would launch from a value perspective in the marketplace.

Again, those on things you can just turn switches on when it turns which is off.

They take years to build those relationships. So I'm really pleased as to our market prep and we.

We look forward to sharing lots of lots of details around what we're doing as we get closer to launch.

Terrific. Thank you so much.

Thanks, Patrick I appreciate it.

And our next question is coming from European for nature of Guggenheim Partners go ahead. Please.

Hey, guys. Thank you for taking my question just wanted to get a sense off from where the trust from our three milligram dose on how the three milligram dose fit into the development strategy is that the dose in consideration for the atopic dermatitis study and what are some of the gating factors for the phase III a day.

Graham.

If you can give some color there.

Debt stock. Thank you.

Sure. So we are hopeful to start that study by the end of the year.

We're in.

Multiple regulatory discussions around the world and.

That's really the gating factor is.

Just concluding those regulatory interactions gaining alignment on study design study size duration.

As we've spoken to before.

We'd like to explore three milligrams in the overall program, how we do that as a point of discussion with the regulators.

Around the world. So as soon as we have clarity from all of those.

Various moving parts will be in a position to share those details with you guys I'm really excited about it.

We're.

Pending timing of all the regulatory interactions some of which we can control and some we can't.

We still do expect to start the study before the end of the year.

Got it thank you.

And our next question is coming from Roger song of Jefferies. Please go ahead.

Great Yes.

Yes. Thank you for taking the question. So I have two so the first one is army can you remind us about your CBD assets in terms of their heart failure and.

NPL.

Sure.

So as.

Some of you know.

Arena had a long standing history.

In the cardiovascular research area it started with Brilinta peg.

And Linda pack was designed to be a once a day URL that may make the intravenous prostacyclin.

Three and a half for the half life of <unk>.

J&J is so Luxembourg compound.

And six five to 10 for the potency on the IP receptor.

On that drug had had.

Landmark data in the phase two study.

And and of course, we found out a fantastic partner to move that compound forward in United Therapeutics.

That same group has developed multiple other compounds that have applications and other cardiovascular indications.

The two that we're progressing our apd for one eight.

And commanded Grill EBIT.

For one eight as a beta three antagonist and the application is acute decompensate.

Compensation heart failure.

Here, we believe we have a compound that at least in animal setting.

Suggest improving cardiac function ejection fraction cardiac output with no change in hemodynamics, which would be really the holy Grail in acute heart failure should that hold up in humans.

And so we're very excited about that we do have fast track designation for that compound.

The second compound is to manner Grill Tomorrow goes for <unk> inverse agonist.

By blocking the <unk>.

Interaction, we believe we can actually blunt basal constriction in platelet aggregation.

I spoke to the side of a PCI in semi and non semi patients. So.

This is this drug also has fast track designation.

Both the compounds are moving into phase two we expect data late in 2022 for both the compounds. So very excited about this we think.

It's foundational for the company long term to continue to progress novel assets in white space areas, where there's tremendous unmet medical need and we.

We think eventually it'll form another leg of the stool for the company so.

Early days, we're through the phase ones.

On <unk>.

And in building phase III programs out and we'll continue to give everyone an update on them, but we're extremely excited about what this means for the company over the next couple of years.

Awesome, Yeah excited to hear about them.

And on asset outside of like try them on so thats great.

Other question is just about the finances.

So understanding you're having the phase III readout next year on me.

And of course into you you're already prepared for commercialization.

Help us kind of or maybe guide us what what are the potential kind of ramped it turns out our commercial and R&D.

From next year and she does on the following year.

Sure.

Lori is on the call.

Our CFO for learning for me, let me hand back to you.

Sure Hi, Roger.

We did guide last year and landed on our guidance at about $350 million on cash burn we haven't given guidance for 2021, but what I can say is we are seeing our programs advance and so you can imagine debt, we'll have continued and and our increased spending as we advance our UC program.

We began our a diesel free as Amit said, you know toward the end of the year.

We're seeing progression in our C. D. R E. A R E.

And our CV program and so that whole portfolio is continuing to progress. So we haven't given guidance yet but.

We have $3 50 last year and you know we are seeing progression in all of our studies.

Alright Thats helpful. Thank you that's all for me.

Okay, Thanks, Roger and thanks for asking the questions.

Yes.

And our next question is coming from Joseph Stringer for.

From Needham and company go ahead.

Hi, everyone. Thanks for taking our questions. So sorry, if I missed this but a follow up on other.

Artificially area on our results.

In terms of.

The responder rates for the salt score.

Would it be a fair comparison in terms of.

When the day, they come out to compared to some of the Jack data.

It's been reported.

Yes, Thanks, Joe.

I think the safety profile from the Jackson, yes, when Peter so vastly different.

Then I think I would encourage caution in terms of what we think the JAK ability to penetrate that market over the long term will be.

Clearly and universality Pallas patients.

Where there is no other potential option patients might be willing to take the the risk of the malignant season of ETE risk and the increase in mace events.

On that might not be the case broadly for alopecia areata. So we think theres kind of a different risk benefit profile with S&P modulators, if we're able to show.

In effect, that's meaningful for patients clinically and that physicians believe.

It's something they would choose to use in clinical practice.

That combined with the safety profile of S&P modulators relative to Jack's I think create a completely different risk benefit profile. So.

Again very early to tell because we are.

We're breaking new ground here as we did with atopic derm and as we are with the OE, we're breaking new ground in in atopic derm. So.

Early days I think we'll know more as we move to.

Moving to readout that study and.

In terms of what that risk benefit profile looks like but I'm always leery of being able to just talk about the benefit without talking about the risks and.

Because thats really how physicians and ultimately patients will make decisions.

I think that that direct comparison is always a little difficult because the risks.

The risk benefit profile could look very different.

Great. Thanks for taking my question.

And again, that's on a reminder, taller.

All participants if you wish to ask a question. Please press star one now and our next question coming from <unk>.

I'll go on from Jones trading. Please go ahead.

Hi, Thanks for taking my question I had a couple first on time on.

Okay.

Two recently started so just curious on your thoughts on the key elements of the trial design that we should focus on relevance.

The relevance of the primary endpoint of change in IRR on what could the development path look like in this indication.

And secondly, as I think about the.

Commercial opportunity for Gladiator trial, and the module you see come.

What could be the barriers when youre thinking about the launch is it predominantly going to be axis will there be some sort of.

Awareness that needs to be generated I'm curious on thank you.

Great great questions.

So on command a grill.

The the focus.

As in this initial phase II study as you mentioned look at the index of Microsemi, Victoria resistance for RMR, Inc.

Quantitative measure will be able to understand actual rates of re profusion in these patients.

By itself is not a regulatory endpoint.

And because we're breaking new ground here I don't want to speculate in terms of what the phase III Registrational trial will look like if we see activity here. We will go have a more robust conversation with the agency.

They've been incredibly supportive.

In terms of us moving both on cardiovascular assets forward.

And allowing a fast track designation simply because we're exploring these.

Just one of these drugs and indications with <unk>.

Really are very few options for patients so.

<unk> will be the first time, we've seen some of the quantitative here.

Recall that older age it no longer available in the United States catastrophe <unk> antagonist.

Has been tried post angioplasty, specifically looking at.

Profusion distal to the site.

<unk>.

Of the injury and.

We've seen.

An improvement in visa constrictions that we've seen.

And improvement using this class or similar class of drugs or importantly, maybe you are seeing a different way.

Hitting this specific mechanism. So it gives us good reason to go run the experiment.

And then from there we'll go have a series of agency conversations.

Europe, Japan to ascertain what a global phase III program would look like.

In terms of Gladiator.

Flipping back and Gladiator.

Dresses about 150000 patients are currently unaddressed.

In the UC space. These are patients who are very active disease.

But don't meet the criteria for.

We're calling for more moderate.

The steep and on the moderate to severe range for these patients. These patients on a five day assays for the most part maybe pulse with steroids.

Experiencing significant disease.

They tend to not meet inclusion criteria for existing studies.

On.

But they they have.

They definitely have very active disease and very much impacts for life.

So we think theres, a real opportunity here with the <unk>, given our risk benefit profile.

These patients.

From a launch and access perspective, we think this actually helps our broader access.

One other things that we have already been doing is talking to.

Future potential payers about.

The role of Gladiator and how it would help in terms of an overall value story for Trans mountain. So so that work as I mentioned early on talking about commercial preparedness, we've been spending a lot of time.

In the market talking about Gladiator, specifically talking.

Two two.

<unk> and <unk>.

We don't think it'll be a barrier in fact, we think it'll be a potential benefit in terms of <unk>.

Treating these patients these patients cost per system a lot of money.

And they are currently excluded from.

From the current standards standards of care that are available so.

It expands the pool and for.

For many payers, specifically folks like integrated delivery networks will actually reduce the overall cost of care for these patients.

Okay.

Operator next question.

And our next question is coming from Mr. David Wong S. M. D. C go ahead.

Hi, Thanks for taking the questions guys.

Just had a couple so just in terms of helping to set expectations for the <unk>.

The open label sub study a.

<unk> later this year with the three milligram dose I was wondering it.

Theres any specific safety events or things that you would see that might lead you dealt.

That would preclude further development of that dose is there anything that would be.

Red flag for us actually wanting to take that dose for.

Sure.

Again, it comes back to risk benefit so.

The safety profile of that dose would have to be married with the.

The efficacy that we see in three milligrams versus two milligrams, if we see higher rates of adverse events in three milligrams and no efficacy then definitely we'll just move forward with the two milligram.

There's a strong argument to.

From a cost on time perspective take single goes forward on the other hand, there is a strong competitive advantage to having multiple doses clinicians loved the idea to be able to throttle the dose up in truckload dose down. So it's all going to play out on the risk benefit side.

Well, we know so far is we see on a mean lymphocyte change count we see about a 12% to 15% decrease on the additional decrease in lymphocytes.

Again these are means.

From three milligram tumor growth and healthy so as we as we look to patients we'll be looking at lymphocyte counts aggregate lymphocyte counts will be looking at.

On a percentage of patients at a grade III lymphopenia.

We will be looking at cardiac any cardiac issues or serious infectious issues.

I will point out that.

In our healthy volunteer studies, we have to get to five milligrams before we see any other types of cardiac conduction issues.

<unk> seen with some of the other <unk> modulators out there. So we do have a lot of room.

From two milligrams up.

We think three milligrams is a safe place to go and expose patients.

And.

There will be questions on again, we'll come back to weather, where do we see the right risk benefit in those patients for now.

Got it that's great that's really helpful.

Great.

Debt builds off of that a little bit. So we know as a class debt with S. P.

Theres lymphocyte depletion that's an on target effect, however, does not seem to translate to opportunistic infections and so I think thats been the case consistently through your trials and even with grade three events.

Based on ADT.

You Werent seeing any opportunistic infections and things of that nature is there anything in the literature to suggest what why that might be.

Think about <unk>, where its been.

For inherently state for JAKKS for example.

Where it might affect less immune subsets or spare some you know some of the immune system.

Yes, I think that's spot on.

<unk> B class.

Not broad immunosuppressive with the JAK share essentially.

On bringing the whole system to a halt.

Which which results from the malignancies and results from the serious infectious events.

That we've seen across the entire JAK class.

And thats when <unk> modulation Youre, turning down one very specific area, which is T, which are T lymphocytes and and all the subsequent downstream cytokines, but not shutting everything down.

On.

I think the best analogy I have heard on this is we're using a screwdriver.

We're a screwdriver works and not pulling out the hammer, where you get a lot of collateral damage. So.

It's more specific immuno surveillance is maintained in these patients.

We haven't seen the serious infectious events across the board and frankly, I think across the entire class has.

It has not been an issue.

For for S&P modulator. So again, it's just from a more specific class.

It's interesting to think about it PRASM on this unique features in a class that really hasn't had an optimized compound.

Historically and where it <unk> on what could go in terms of its broad clinical utility is really quite astounding.

But it comes back to this point the <unk> can't be used everywhere.

But in the subset of diseases, where we think <unk> can be used.

We think it's just a better fit for patients a single once a day oral with the opportunity to.

To regulate disease.

With that all of the.

The broad immunosuppression of the Jack so.

And there is quite a bit of literature in offline, we're happy to share some references would be but it's quite a bit of literature.

Suggesting that.

Immune surveillance is maintained with the PRASM on specifically.

Okay great.

For providing context really really again.

Thank you.

That's it for me.

Alright.

Hey.

And that is our last question for this Q&A session and at this point I would like to turn over the call to Mr. Amit Munshi, the president and CEO for closing remarks.

Great Hey, thanks, everyone for jumping on the call today I hope that was a.

That was useful moving to the Q&A for them again.

And we look forward to continuing to provide updates as we continue to make progress.

Across the entire pipeline. So look forward to chatting next quarter and hope everyone stays safe and look.

Forward to seeing everyone lives Inc.

Thank you.

And this concludes today's conference call. Thank you for participating you may all now disconnect. Thank you so much.

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