Q4 2021 Deciphera Pharmaceuticals Inc Earnings Call

Good afternoon, everyone and welcome to decipher in Pharmaceuticals fourth quarter full year 2021 financial results Conference call. Today's call is being recorded at this time I would like to turn the call over to Meghan Meyers Senior Vice President at Argot partners Megan.

Thank you operator.

Welcome and thank you for joining us today to discuss the Cyprus fourth quarter and full year 2021 financial results.

I'm, making meyers with Argot partners.

With me this afternoon to discuss the financial results.

And provide a general corporate update.

<unk>, President and Chief Executive Officer, Dan Martin, Chief Commercial Officer, and Tucker Kelly Chief Financial Officer.

Before we begin I would like to remind you that any statements. We make on this call that are not historical facts are forward looking statements, reflecting the current beliefs and expectations of management made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act I'd mentioned 95.

Examples of forward looking statements made during this conference call include our expectations for our preclinical and clinical programs.

Our commercialization of Kim Mark in 2022 guidance.

Forward looking statements made on this call involve substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward looking statements.

And we cannot assure you that our expectations will be achieved.

Risks and uncertainties include those set forth in our most recent annual report on Form 10-K , as well as our other SEC filings.

We assume no obligation to update or revise any forward looking statements.

Following this call a replay will be available on the Companys website, www dot <unk> dot com.

With that I will now turn the call over to Steve <unk>, President and Chief Executive Officer of Decipher Keith.

Thank you Meghan and good afternoon, everyone. Thank you for joining us today as we provide an update from the fourth quarter review, our financial results and look to the year ahead.

We begin 2022 with a successful commercial franchise portfolio of first in class and best in class product candidates and a productive research engine that continues to fuel our future growth.

Earlier this year, we outlined our key strategic priorities for the year, which include maximizing the value of Ken lock in just in the U S and successfully launching this important medicine in fourth line Gist in key European markets.

<unk> enrolling the phase III registration, enabling study of them Sultanate, and tenants <unk> giant cell tumor or <unk> and presenting an update from the ongoing phase one two study of themselves can have in this disease.

For DCC 31, 16, our first in class <unk> inhibitor presenting initial monotherapy data from the phase one study and initiating the tremendous combination part of this study and finally, declaring a development candidate from our ongoing Pan RAF inhibitor Research program.

We're excited about our milestones for 2022 as we continue to advance our mission and build long term shareholder value.

Let me begin today with an update on our pipeline.

We have begun enrollment in the phase III registration, enabling motion study for the insult to nib a potential best in class CSF, one receptor inhibitor for the treatment of <unk>.

Patients with <unk> experienced a significant disease burden and often present with multiple symptoms, including significant pain stiffness and limitations and joint function.

<unk> has demonstrated clear clinical proof of concept in an ongoing phase <unk> study in <unk> patients.

At the European Society of medical oncology meeting last year, we presented data from the dose escalation cohorts from the phase one portion of the study.

And initial results from the phase II expansion cohort showing that treatment with themselves and have resulted in a 47% objective response rate, including a complete response in one patient.

We believe these data reflects how potent and selective themselves and it is for the CSF one receptor and the potential for this product candidate to offer meaningful benefit to patients with TCT.

Patients in the more mature dose escalation portion of the study had impressive durability of treatment.

And as of the data cutoff. The average time on therapy was 10, seven months and 72% of patients remained active on treatment.

Importantly, the initial safety and Tolerability profile of <unk> was promising with the majority of treatment emergent adverse events being grade one or two.

We look forward to building on and expanding these results with updated safety and efficacy data from the ongoing phase one two study later this year.

Based on these compelling data we design for the phase III registration, enabling motion study of them Sultanate, NT GCT and announced in January that enrollment was underway.

The study is expected to enroll 120 patients at over 40 sites globally.

Patients will be randomized two to one <unk> compared to placebo with a primary endpoint of response rate at 25 weeks.

We are leaders in exploring the role of Autophagy has a broad resistance mechanism in cancer and GCC 31, 16, our first in class bulk inhibitor has the potential to benefit a significant number of cancer patients by targeting all the initiating factor in the Autophagy pathway.

There was a growing body of research demonstrating the key role Autophagy plays in tumor growth and we have built an industry leading position in targeting this pathway.

I'll talk to GE as the catabolic process in which sells recycle their components as a source of energy and cancer cells. Activate this pathway is an escape mechanism due to anti cancer therapy.

Receptor tyrosine kinase or our T K, Ras and map kinase pathway driven cancers are known to have high basal levels of baxalta.

Which these cancers used to maintain nutrient supply and to regulate cancer cell metabolism and survival.

<unk> has been observed to be up regulated in mutant cancers and is also known to mediate resistance to inhibitors of our TK.

As and map kinase signaling pathways.

<unk> kinase is the initiating factor in the pathway and by inhibiting <unk> with a potent and selective inhibitor such as 31 2016, we have the potential to target. This important mechanism of resistance. We have now generated preclinical data both independently and with academic collaborators showing the ability of DCC 3116.

To address Autophagy induced by a variety of our TK RASM map kinase pathway inhibitors, such as Egfr inhibitors, <unk> inhibitors and mechanism bitters.

With the broad potential rollover tough AG as a resistance pathway. There was a significant opportunity to benefit patients across a broad spectrum of solid tumors, given the frequency of raws, Ralph and our TK mutations and approximately 70% of human cancers. We believe the opportunity for GCC 31, 16 as a first in class.

<unk> inhibitor is significant.

We're making good progress in the phase one study of DCC $31 16, and our near term focus is to reach the recommended monotherapy phase two dose and then move into the first set of dose escalation combination cohorts with a mechanism in the second half of this year, we expect to present initial data from the monotherapy dose escalation.

<unk> portion of the study later in 2022.

Based on the exciting new preclinical data we have generated we are also planning to evaluate the combination of DCC 31, 16, with a <unk> inhibitor in non small cell lung cancer subject to regulatory feedback.

Moving to our preclinical pipeline, we recently announced our plans to declare a development candidate from our Pan RAF Research program later this year.

We're focused on our goal of developing a best in class dual inhibitor of BRAF and <unk> kinases, which would address class one two and three BRAF mutations as well as BRAF fusions.

By leveraging our switch control kinase inhibitor platform. We believe we can develop an inhibitor with superior pharmaceutical properties and a long residence time, adding another clinical development program to our portfolio of potentially best in class and first in class product candidates.

Before I turn the call over to Dan I'd like to share a brief update on recent developments with <unk>.

Last month, we presented more detailed results from the intrigue phase III clinical study of <unk> in second line Gist at the American Society of clinical oncology Plenary series session.

Although the study did not meet the primary endpoint of superiority compared to Sunitinib in second line Gist patients. The results showed that the efficacy with Ken lock was comparable to Sunitinib Ken.

<unk> was generally well tolerated and fewer patients in the kin lock arm experienced grade three or four treatment emergent adverse events compared to sunitinib patient.

Patient reported outcome measures also showed a more favorable tolerability profile for patients treated with <unk> compared to patients who received sunitinib.

We intend to publish the full results of the intrigue study in a peer reviewed journal in the coming months.

Finally, a few weeks ago, the national comprehensive cancer network or <unk> published updated just clinical practice guidelines and added a recommendation for the use of <unk> 150 milligrams twice daily dosing or <unk>.

Upon disease progression on Ken locked 150 milligrams once daily dosing for <unk>.

An exploratory analysis of the Invictus phase III study of Ken Lock in fourth line and fourth line plus just published in the oncologists in November of last year.

So that patients who received Ken locked dose escalation to 150 milligrams <unk> from 150 milligrams QD after disease progression experienced substantial additional clinical benefit as measured by further progression free survival.

Now I'll turn the call over to Dan Martin, Our Chief commercial officer to provide an update on our commercial efforts Dan.

Thank you Steve in.

In Q4, we continued to execute on our commercial goals for kids, including reinforcing its position as the clear standard of care in <unk>, continuing to expand our prescriber footprint and providing this important treatment to patients with advanced gist in the U S and globally.

In Q4, we achieved $23 7 million and total net product revenue globally, including $21 5 million in the U S.

Core drivers of cannot demand remained consistent from the U S, including new patient acquisition payer access and persistency.

During the quarter, our launch to date Prescriber base grew to nearly 600 physicians increased 13% versus Q3 with most new prescribers again coming from the community setting.

Product attribute ratings among kinloch users remained exceedingly high in Q4 from both academic and community Treaters.

During the quarter as anticipated the percentage of patients receiving free drug under our patient assistance program or path.

At the high end of our 20% to 30% estimated range and the gross to net adjustment was in line with our projected annual average of 15%.

Our Pap and gross to net guidance for 2022 remains the same as in prior years.

Lastly, as is common across the industry in the U S. We saw a modest increase in channel inventory. During Q4 that may have a limited impact on ex factory sales and product revenue in Q1.

Turning to Europe , now that we have regulatory approval in fourth line gist.

<unk> is focused on achieving reimbursement in markets, where we can launch most quickly in.

In Germany, we are now actively promoting kinloch with patients receiving their first shipments last month in <unk>.

Switzerland, we are pursuing named patient sales and in France, we are transitioning to a post approval paid access program in the first half of 2022 before we receive formal pricing and reimbursement decisions.

As we've communicated previously we believe the number of patients diagnosed with just each year across the five largest European markets is equivalent to the number of patients in the United States. We look forward to building on our U S launch success as we now introduced Kinloch in Europe .

Turning to consulting in as Steve noted, we believes there is significant unmet need and the opportunity to offer meaningful clinical benefit to patients with <unk>.

And based on our market research engagement with Kols and analysis of U S claims data. We believe there is a significant market opportunity for a new therapy with a compelling efficacy and safety profile, we estimate that each year in the U S. 14000 to 18000 patients are diagnosed with <unk> 2000.

2400 will recur after their surgery and <unk> hundred to <unk> hundred will initiate systemic therapy based on these figures and other insights gleaned from the claims data we estimate a total potential addressable market in the U S of approximately $850 million.

And this estimate does not include the additional opportunity associated with the significant prevalent population living with DCT.

Nor does it include the opportunity in Europe , where there are no approved therapies and the incidence and prevalence are expected to be proportional to the U S.

Today, the only FDA approved therapy for <unk>, which has a boxed warning a rems program and extensive liver monitoring requirements because of known hepatic toxicity rooms.

Given the challenging risk benefit profile, it's perhaps not surprising the claim to the shell that few patients who were treated with systemic therapy received petsmart name.

<unk> said the majority of these patients receive off label in that.

Despite imatinib not being FDA approved for TCT, and having limited clinical data supporting its efficacy in these patients.

Therefore, we believe the potential best in class profile of insulting and could offer patients and physicians a highly compelling treatment option for this challenging disease.

And because our analysis shows that approximately 90% of <unk> prescribers are just treaters, who are already targeted by our commercial team. We believe that we are uniquely positioned to successfully penetrate this market opportunity. We anticipate that had been selling <unk> is approved we will be able to commercialize both kinloch and themselves.

With a single sarcoma focused steel team requiring only incremental commercial investment.

I will now turn the call over to Tucker Kelly, our Chief Financial Officer to review the financial results Tucker.

Thanks, Dan I'd like to review the highlights from our fourth quarter financial results total revenue for the fourth quarter was $24 $2 million, which includes $23 7 million in net product revenue Kinloss and 500000 collaborations which includes kinloch supply and royalty revenue under our agreements with <unk> for greater China.

Total revenue for the year ended December 31, 2021 was $96 1 million, which includes net sales in kinloch of $87 4 million to $8 8 million in collaboration revenues.

Net product revenues for the fourth quarter of 2021 includes U S sales of Kinloch of $21 5 million and ex U S sales of <unk> of $2 2 million.

Cost of sales for the three months ended December 31, 2021 was $500002 9 million for the year, which included $1 3 million in cost us net product revenue and $1 6 million and cost of collaboration revenue.

Cost of sales will not include the full cost of manufacturing until the initial prelaunch inventory is depleted and additional inventories manufactured and sold.

We do not expect to cost of sales as a percentage of net sales of can lines increased significantly. After we have sold all zero cost inventories and commence the sales of inventories that will reflect the full cost of manufacturing.

We expect to continue to sell the initial prelaunch inventory a killer in the U S. During 2022.

Total operating expenses were $112 6 million in the fourth quarter compared to operating expenses of $82 5 million in the same period in 2020.

For the full year 2021, total operating expenses were $396 2 million compared to $313 3 million in 2020.

Research and development expenses in the fourth quarter was $74 9 million compared to $52 3 million for the same period in 2020 and $257 million in 2021 compared to $199 million in 2020.

Selling general and administrative expenses for the fourth quarter were $37 2 million compared to $30 1 million in 2020, and $136 3 million in 2021 compared to $114 one in 2020.

Operating expenses in the fourth quarter of 2020 included one time charge of $26 2 million due to a restructuring that we announced in November following the intrigue resolved to prioritize our clinical development activity and streamline our operations. We expect our operating expenses to decrease in 2022 as a result of this restructuring.

We ended the year in a strong financial position and remain well capitalized with cash cash equivalents in marketable securities of approximately $327 6 million, which together with our anticipated product royalty and supply revenues, we expect will be sufficient to fund our operations into 2024.

With that I'll now turn the call back over to Steve.

Thank you Tucker as we've outlined today, we expect significant milestones this year across our deep pipeline of first in class and best in class product candidates. These milestones include the nomination of a Pan RAF inhibitor development candidates initial data from our phase one study of DCC 31, 16, and the initiation of the study's combination cohorts.

Enrollment in our phase III motion study of the Sultanate and updated data from its ongoing phase one two study and execution of Kinloch launches in key European markets. Further entrenching. This medicine as the global standard of care for fourth line Gist.

We have the resources and the team in place to execute on our strategic priorities and we look forward to sharing updates on our progress over the course of the year as we work to make a difference in the lives of people with cancer, operator, I'd now like to open the call for Q&A.

Thank you as a reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound key please standby we compile the Q&A roster and our first question comes from Jessica Fye from Jpmorgan. Your line is now open.

Great. Good evening, thanks for taking my questions.

Starting with <unk>.

And I think that you would never promote for use in earlier lines of therapy, there wasn't on our label.

Do you see any potential revenue opportunities from physicians wanting to use the product in earlier lines of therapy or as payer access going to make that unlikely even if physicians did want to use it that way in some cases.

Yeah, Hi, Jeff It's Steve Thanks for the question and I'll try and take that so as I mentioned in the prepared remarks, we saw the data intrigued data get presented at the <unk> Plenary series session last month, and I think the outside World has interpreted the data very similarly to how we viewed it.

The drug has it seems comparable efficacy to <unk> in the second line, but yet with an improved or better safety profile just based on the number of grade three four treatment emergent adverse events.

And so what we would expect in terms of next steps is to publish the data and mature reviewed literature and so thats something that were actively working on and then as companies do with new data that emerges for unapproved drugs will then submit those data to the CCN for their review and consideration.

For the for the guidelines.

And so I think any potential use off label and Youre right, we can't and won't promote off label for the drug in the second line, but I think to the extent that the drug is listed in the guidelines that certainly would enable potentially reimbursement for that use outside of the label and then physicians would have to on their own accord.

I'm aware of the data and then make the treatment decision to use the drug outside of label for that to have an impact on revenue. So I think the short answer is it's just too soon for us to know.

How that.

How the data intrigued data may impact treatment patterns here in the U S and what the impact could be on revenue.

Great.

Maybe kind of related to that.

Guidelines again, how does the update to the MTN guidelines for Tid dosing affect how you think about duration of treatment or the.

The incremental revenue opportunity for <unk>.

And that type of abuse.

Yeah. Thanks, John So just as a reminder, the PID listing now in the NCC and treatment guidelines was based on data both from the Phase III Invictus study, which was the basis for approval as you know and also from the Phase one study where patients had the opportunity to dose escalate to 150 <unk> upon progression on with 150 QD.

So very similar to my remarks related to intrigue now that that use is included in the treatment guidelines. It certainly makes it.

Perhaps easier for that used to be reimbursed outside of label.

Physicians of course would need to be aware of it we can pull more promote off label. So physicians that need to be made aware of it and make that treatment decisions. So again it could have an impact on utilization in the U S. But it's really too soon for us to know what that impact if any could look like as we've noted on prior calls we do continue to see.

A small number of patients being treated with with BYD, so dose escalation upon progression.

And as of our last update on the last quarterly call. What we said was that we see some of that use getting reimbursed and some of that used not getting reimbursed. So we'll have to see what emerges here over the course of 'twenty two both in terms of utilization of that regimen and also the reimbursement is that by payers.

Great. Thank you.

And thank you.

And our next question comes from <unk> <unk> from Jefferies. Your line is now open.

Hi, This is Ian thank you.

So question is on.

Ken luck, so it's coming off at about three years in the U S.

Uh huh.

So I'm kind of wondering whether you would provide sales guidance going forward.

Yeah. Thanks. Thanks for the question so with respect to guidance Youre right. We have not provided sales guidance up until now revenue guidance up until now and that's principally been because of the dynamics that we see in the marketplace and for the brand not just in the U S. But globally. So with our launch is now underway and <unk>.

Europe as I mentioned in the prepared remarks, we thought it prudent not to provide revenue guidance for the year I think as soon as we see stabilization and have a better sense of how some of the dynamics that I just discussed.

Justice questions how that plays out.

Then maybe in a position to provide guidance, but we haven't as you know so far.

Okay and then.

Do you launch in Europe Im sure Anita.

Our country is different but how long do you think.

What is your pricing would be.

If you don't have a discounter.

Pricing.

Yes. Thanks for the question. So we're excited now that the brand is approved in Europe , and as I mentioned in the prepared remarks.

And in last month at an Investor Conference our launches underway now in Germany, and so the drug is priced in Germany at 21500 Euro per month, so about $24000 per month for the rest of the countries across Europe , the ultimate prices going to be dependent upon pricing and reimbursement negotiations.

It's really premature for me to speculate as to what prices will be in other territories or what our future average price maybe across key European markets. We most certainly know what's going to be a lower price than what we experienced in the United States, but we're pleased with the pricing approach that we.

Taken in Germany, so far and pleased as well with how the launch is going even though it is early days so far in Q1.

Great. Thank you.

And thank you and our next question comes from Chris Raymond from Piper Sandler. Your line is now open.

Hi, This is allie rats Alon for Chris today, Thanks for taking my question.

So first just a quick clarification on Kinloch trends I think in the prepared remarks, you had mentioned that inventory for Tanaka in Q4, So could you just quantify that or kind.

Kind of help us understand how we should be thinking about sequential trends.

Heading into Q1 and then.

Separately on the phase one to update and in the second half.

Just hoping you could kind of frame.

That readout and how it informs the long term safety profile of the drug.

Persistency rates.

And those kinds of things and just what kind of what should we be paying the most attention to.

When we get that update thanks.

Yes. Thanks for the question Alex So I'll take the second question first and then I'll ask Dan if he would take the question about market dynamics and the inventory build that we saw in Q4, so forth insults in the <unk>.

Graham as you know is moving along briskly. So we're excited to have the motion study now up and enrolling patients and as you referenced will have an update to the phase. One two study later this year the last update which was at ESMO. We reported blended response rate from the dose escalation part of the phase one and then the expansion cohort cohort of <unk>.

47%. So we're really pleased with the level of activity that we were seeing despite the data being relatively immature that data update. In addition, the safety data that we presented showed that the adverse event profile is very manageable with the vast majority of the aes being grade one and great too. So in terms of what's the look forward.

Here with the data update later this year, we will have certainly a better data maturity both from the phase one dose escalation cohort of the study and also from the expansion cohort, which is fully enrolled so we will have a more robust set of data and what we'll be looking to as both the efficacy of the drug and how that profile continues.

Two evolve and also the longer term safety that we see with the drug so far we've been really pleased with the results that we presented and we look forward to providing the data update later this year.

Hi, Ali this is Dan I'll take the first question you asked about the inventory sort of overall market trend.

Overall, we continue to be really pleased.

And as I mentioned in my prepared remarks, we continue to see.

Real strength in.

Yes.

As I noted.

Can you just tell us it's clear standard of care in the fourth line and then.

Their perceptions of cannot.

As a treat their patients.

We remain exceedingly high so.

All really pleased with the positive and consistent business trends.

I'm just wondering.

Perfect.

As it relates to the.

Good morning.

Okay.

The key.

Sure.

Speaker Berkley one moment please.

Okay Speaker I apologize about that we had some feedback coming from that line, but you can go ahead, you probably would want to start back a little bit because there was noise and we weren't able to hear you.

Okay sure. So you can hear me okay Justin.

I can hear you just fine excellent I didn't think it was my line, but want to make sure. So as I was saying really really pleased with the positive positive and consistent overall.

Trends of the business as it relates to the inventory color. We provided we just wanted to point out.

That we saw.

Underscore again modest.

Inventory build in Q4.

Wanted to provide a little bit of color there, but very consistent with what is often seen.

Throughout the industry in the U S with that Q4 to Q1 trends.

Nothing nothing beyond that little color, we wanted to provide.

Yeah.

And thank you and our next question comes from Michael Schmidt.

Luke.

<unk>.

Your line is now open.

Hey, Good afternoon. This is Paul on for Michael Thanks for taking my question just a couple from us on DPC 116.

Hoping to get your comments on what you're trying to hoping to see for initial data. This year that would be considered positive or sort of encouraging for the development and then put on those Brian a little color on how youre thinking about the combination with <unk>.

Sort of more of becoming a potential resistance mechanisms.

Efficacy in responders or maybe other observations that you did highlight some new preclinical study.

Thanks.

Yeah, Thanks for the questions Paul.

Happy to take those so first with respect to the data update for 31 2016 later this year as I mentioned in my prepared remarks, we will have data from the monotherapy dose escalation part of the study so principally what we're going to be looking for.

That part of this study is safety data and getting to a recommended phase two dose. We're also of course going to be looking at important pharmacodynamic markers from the phase one so really trying to ensure from those PD markers that we're inhibiting <unk> and we're having sort of pharmacodynamic effect.

We hope and need to have with 31 2016 in humans. So that's exactly what we'll be looking for with the data update later this year.

With respect to <unk> inhibitor combinations, we've presented that data showing that the <unk> inhibitors similar to receptor tyrosine kinase inhibitors as similar to <unk>, all elicit an increase in autophagy.

When treating cancers and so we've demonstrated that quite convincingly I think in the preclinical models that we presented and reported on some of that quite recently in fact at the Triple meeting last year, we had a full set of data looking at both all summer and they have been a fattening those receptor tyrosine kinase inhibitors and the potential combination of <unk> 16.

Those two agents.

But with <unk>.

What we see is the same dynamic which is that those inhibitors elicit an increase in autophagy and we're able to address that with the addition of an <unk> inhibitor and so we reported some in vivo data showing the same where we see actually Frank tumor regressions in some models and some in vivo models of the <unk> inhibitor.

So I think as to the question of whether this is whether we expect to see the addition of an <unk> inhibitor impact patients who might respond to <unk> inhibition versus those who may not I think it's still too soon for us to know based on the preclinical data what that May look like in the clinic, but we're really pleased with the <unk>.

Not that we've seen so far and as we said last month, our incentives to move forward with our planning <unk> clinical combination.

Got it thank you very much.

And thank you and our next question comes from Robyn <unk> from <unk> Securities. Your line is now open.

Hi, Good evening this is Alex on for Robyn.

Will there be IV treatment recommendation that you got on the entity and guidelines translate to other countries that are in the EU are in China and is there any initiatives there to make that happen.

Yeah. Thanks for the questions I'll be happy to take that so with respect to the NCC guidelines, we know that physicians around the world who referenced those guidelines. Despite the fact that they may have regional guidelines for example, ESMO publishes treatment cancer treatment guidelines as well, but we know physicians will reference.

The NCC and guidelines around the world and view that as an authority and a source of information.

That impacts utilization in other territories I think it's still too early for us to know whether the listing and the NCC and treatment guidelines will have an impact there.

Thanks.

For treatment duration do you have any insights into what the real world data treatment duration is for can lock in fourth line Gist and does it.

I don't approach that five months seen him Invictus clinical trial.

Sure Dan would you like to take the question about what we're seeing in terms of duration and persistency.

Absolutely. Thanks for the question so yes.

Yes. So this is something that we of course track closely and what we've seen we've been really pleased with it not always does real world persistency tracked.

In keeping with clinical trials, but what we've communicated previously is that the persistency, we see in duration of therapy that we see it's been very consistent.

With the PFS that we saw.

Invictus trial.

So that's that's how we.

Tried to provide color on on what we've seen in the real world setting.

Alright, thanks for taking my questions.

And thank you.

And our next question comes from Peter Lawson from Barclays. Your line is now open.

Hey, Thanks for taking my questions.

Just a couple of quick ones on.

The <unk> inhibitor.

How is that proceeding for the dose escalation has enrollment go in and how many patients do you think youll have bi.

I guess, the second half when we see the data.

Yes.

Dr. Peter It's Steve Thanks for the question. So we're pleased with all of the phase one dose escalation study is progressing we haven't provided specific details on patient numbers and it's too early for us to guide specifically on how many patients we may be able to report on here in the second half, but its progressing according to plan and we're pleased with the enrollment that we're seeing in that dose escalation.

Study.

Okay. Thank you and then.

A couple of quick ones for Tucker actually just the cash guidance into 2004, I think there is some long term marketable securities.

Is that anything in there that could become illiquid and then under to suit filed.

$300 million shelf, just how should we be thinking about that if that's kind of good.

Bookkeeping.

Anything else, we should be thinking about.

Exactly Peter's I'll take the second part first that's exactly right in terms of the shell.

Thats just good housekeeping because of the stock market cap drop.

We lost a couple of Dixie status that we needed to put up another shelf wished we had before we came to etsy status a couple of years ago. So nothing to read in behind that just good corporate housekeeping.

As you say the cash balances we report that $327 5 million includes both cash and marketable securities as well, so, but we're goodbye a tech company manage the cash prudently and we also when we do have marketable securities and other investments we have them with very short expiry on that.

Extend ourselves out there with anything that would have long maturities.

On the risk of loss in that way. So we are trying to be pretty prudent keep it all it's close to cash as we can.

Got you okay. Thank you so much.

And thank you.

And our next question comes from Ren Benjamin from JMP Securities. Your line is now open.

Hey, guys. Thanks for taking the questions, maybe just starting off with 3116.

We've seen some of the preclinical data in combination with <unk>.

But you are starting off with <unk>, and then going onto <unk>.

Silver asset.

And so I'm kind of curious how are you prioritizing the development going forward should we be expecting a combination study with <unk> or will you wait to see how the first two combinations for account before exploring new combinations.

Yes, Hi, Brian It's Steve Thanks for the question, it's a good one and you're right.

Presented a lot of preclinical data now looking at a variety of different combinations and thats simply reflective of US following the science and following the data. So I think the way I would guide you there, but if we think about it at least is that we will continue to follow the data that we generate to follow the science in terms of what combinations look most interesting to us.

And would be tractable in the clinic.

And so we would expect over time that will continue to want to explore additional combinations with the draw just because we think it has potentially a very broad utility.

With the combining of the <unk> inhibitor with receptor tyrosine kinase inhibitors map kinase pathway inhibitors and others. So more to come we haven't as you know we haven't made any additional disclosures aside from looking at a <unk> inhibitor combination, but we will continue to generate additional preclinical data and we'll be publishing that over the course of this year.

Okay, and then just sticking with.

They all can editor for a minute when we think about basal levels of autophagy.

And then in these cancers higher levels are you measuring outlook or some other biomarker and how are you doing that in the plasma or is it the tumor biopsy level.

And I guess, just two related questions to that.

This expression these levels of Hitachi as it kind of heterogeneous.

Or is it quite ubiquitous and I guess, what I'm getting at is can this ultimately be used as a patient selection strategy.

Yes, Thats a good question and I don't think we know the exact answer yet to that list.

So with respect to what we'll be looking at as PD markers in the data that we report later this year, we'll be looking principally at two markers. One is atg <unk>, which is a marker of inhibition. So that will be an important market for us. In addition to looking at <unk> 62, which is a measure.

<unk> of artificial flux and so those are the two main biomarkers excuse me PD markers will be looking at when we report out the data later this year.

And was that did you mentioned is that in the plasma or is that from tumor biopsies.

Yeah, that's right it's peripheral blood.

Got you.

And then just final question you mentioned the nominating the nomination of a new Pan RAF inhibitor sometime this year I vaguely remember Vps 34 <unk>.

Can you just give us an update as to what's happening with that asset or if its been shelved I didn't see any mention of it in the press release.

Yeah, Our Vps 34 inhibitor program is a very active research programs. So as you will remember this was a program that we licensed last year and has been folded internally under our Autophagy efforts. Our <unk> franchise. So our research organization has been very active and progressing that program forward.

We haven't made any disclosures yet or guided in terms of when to expect an IND or development candidate from that program.

But we're pleased with how the work is progressing and that forms a key component of our approach to targeting the autophagy pathway generally and then for the Pan RAF program Youre right rent. So this is a program that we disclosed last month, our research program that we disclosed last month, and we've guided to having a development candidate emerge from.

That research program later this year. So we're looking forward to getting to that important milestone as we get closer to potentially bringing a program into the clinic.

Perfect. Thanks for taking the questions.

Yeah.

And thank you and.

And Im showing no further questions I would now like to turn the call back over to Steve quarter for closing remarks.

Great. Thanks, Josh and thanks to all of you for joining us on today's call and thank you for your continued support and we look forward to keeping you updated on our progress during the course of the year here in 2022 Hope you have a great evening.

This concludes today's conference call. Thank you for participating you may now disconnect.

Okay.

Okay.

Yes.

Yes.

Yes.

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Great.

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