Q4 2021 TRACON Pharmaceuticals Inc Earnings Call

Good day, ladies and gentlemen, and welcome to Tracon Pharmaceuticals fourth quarter and year ended 2021 earnings conference call. At this time all colors are in a listen only mode.

After the Speakers' prepared remarks, we will conduct a question and answer session and instructions will be given at that time.

During today's call, we will be making certain forward looking statements include statements regarding expected timing of clinical trials and results regulatory activities future expenses and cash runway and our development plans and strategy. These.

These statements are subject to various risks that are described in our filings made with the securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 2020, and in subsequent and subsequent quarterly reports on Form 10-Q .

You are cautioned to not place undue reliance on these forward looking statements.

Claim any obligations to update such statements now I'd like to turn the call over to Dr. Charles Stewart.

I N C O O Tracon pharmaceuticals, Dr. Stuart.

Okay.

Thank you for joining <unk> fourth quarter, and full year 2021 financial results and business update call.

I will begin with an update on our pipeline and then review our recent activities following that Scott Brown, Our Chief Financial Officer will review our financial results for the three months and year ended December 31 2021.

Finally, we will conclude by taking your questions.

In regards to the progress and the pivotal <unk> trial I wanted to comment on the Tracon clinical and regulatory strategy as it relates to the February FDA Advisory Committee recommendation not to approve the application from you I literally an intervention PD, one antibody to treat non small cell lung cancer until adil.

<unk> clinical trials demonstrate applicability to the U S population.

Specifically the FDA decision emphasizes development of checkpoint inhibitor should be prioritized for patients with unmet medical needs.

That is for cancer indications without approved checkpoint inhibitors or other suitable treatment options and must demonstrate safety and efficacy in patients representative of the U S population.

This is precisely what <unk> is doing with the products. We in licensed from Chinese companies, including our most advanced product the subcutaneous checkpoint inhibitor and before a mab being studied in the pivotal <unk> trial.

And before that was approved in China, making it the first subcutaneously administered checkpoint inhibitor approved anywhere in the world, we're not relying on Chinese data for our U S registration strategy.

Rather we expect approval in the U S based on data from <unk>, where we expect to prove safety and efficacy vendor format in sarcoma patients representative of the U S population.

By virtue of the fact that <unk> patients enroll exclusively at more than 29 sites in the U S and one site in the United Kingdom.

This plan is consistent with our development model to harness global innovation for the benefit of U S patients without suitable treatment options.

Returning to the topic of our continued progress with the <unk> pivotal trial in December 2021, the data monitoring committee or DMC review data from 36 patients who were equally enrolled into each of two cohorts.

As a reminder, the.

The <unk> trial includes one cohort who receive single agent <unk> and a second cohort who received <unk> in combination with your void.

The primary endpoint in each cohort is objective response rate by resist as confirmed by blinded independent Central review with duration of response being a key secondary endpoint.

In each cohort the demonstration of nine out of 80 objective responses by Central review or an 11, two 5% objective response rate defined as the level of response that satisfies the primary objective of the study.

Which is to statistically exceed the 4% objective response rate or <unk>, the only approved treatment for refractory UBS at MFS.

At the December reviewed the objective response rate by Central review in each cohort satisfied the Prespecified futility rule.

The DMC noted that <unk> was well tolerated with only a single grade III related adverse event reported in 36 patients.

<unk> observed that <unk> demonstrated a significantly higher objective response rate and lower weight patients.

To provide additional perspective and reform of dose that produced a 45% objective response rate in the pivotal trial in MSI high cancer patients that resulted approval in China was 50% higher than the original <unk> dose of 300 milligrams.

And the envelope map dose that resulted an objective responses in two or five patients with our dealers salt part sarcoma and a phase one trial was double the original and restart dose.

Therefore, given the high Tolerability and increased activity and lower weight patients. The DMC recommended doubling the <unk> dose and continue with the <unk> pivotal trial.

We should also note that the new and restart dose is still four fold lower than doses shown to be safe in phase one testing.

We agreed with the DMC that the increased dose of Endo full map should optimize benefit to all patients irrespective of weight and expect a superior response rate and safety profile compared to votary.

Drug with a 4% response rate and a black box warning for fatal hepatic toxicity.

Based on data from trials with other checkpoint inhibitors, and refractory UBS and MFS were targeting a 15% response rate for single agent and before map and up to a 30% response rate friendly format given what your boy.

Which would more than satisfy the primary objective of the trial are demonstrating a minimum of 11, 25% response rate in either cohort.

The FDA has reviewed and approved the amended MSR protocol with the dose increased to 600 milligrams recommended by the DMC.

As we announced recently at this dose is now being given to patients.

We are continuing in the same trial design with the only change being doubling the <unk> mab dose and assessing up to ADP new patients in a cohort of single agent and before <unk> 600 milligrams and up to 80, new patients in a cohort of <unk> 600 milligrams with your void.

The primary endpoint will be evaluated in the new cohorts, receiving the higher end before mab dose how.

However patients rolled prior to the amendment will continue on trial and are eligible to escalate their dose, which will be supportive data using the anticipated BLA filing.

We expect to complete and report to safety assessments and an interim efficacy assessment of 36 patients at the 600 milligram dose in the second half of this year.

The amended Charles forecasted to increase the cost of the trial by $5 million to a total cost of approximately $25 million.

We continue to plan on approaching the FDA to discuss a BLA filing strategy as soon as we determined nine responses in either cohort.

With respect to <unk> revenue potential it is important to understand the sales potential in sarcoma with ember format at parity pricing is not just the forecasted $200 million in revenues from the initial indications in second line <unk> PFS and MFS are.

Our clinical development strategy is designed to create the opportunity for <unk> to be broadly used in sarcoma in the frontline adjuvant and <unk> settings by seeking supplemental indications and.

<unk> total sarcoma, driven sales revenue should be further enhanced by marketing and before that as part of the treatment combination in sarcoma with why 8001.

Recall that <unk> 001, as a potential best in class <unk> four antibody, we licensed from <unk> Biopharma in October last year.

As a reminder, we received a broad license for wide 001 to develop and commercialize in North America in sarcoma and in multiple other indications, including microsatellite stable colorectal cancer renal cell carcinoma, and K rest positive lung cancer.

Note with respect to our license we can substitute any one of those indications for bladder cancer endometrial cancer or melanoma at our election.

And these non sarcoma indications wide 001 could be combined with existing standard of care agents, including marketed PD one antibodies.

Our initial development plan for <unk>, one is to initiate a clinical trial in sarcoma in combination with <unk> later this year.

That trial is expected to also study a triplet that includes doxorubicin chemotherapy, which is the frontline standard of care treatment for sarcoma.

While development in sarcoma is straightforward due to the lack of any approved Immunotherapies. We also see a path forward for <unk> in other indications where there is.

There is clear evidence of activity with dual checkpoint inhibition.

For example, the.

The combination of Opdivo and <unk> approved for first line treatment of intermediate and high risk patients with renal cell carcinoma.

However, our discussions with key opinion leaders indicate that most patients receive frontline treatment with a PD, one antibody and veg F inhibitor, rather than with your voice.

Therefore, we believe the unmet medical need in advanced renal cell carcinoma patients is in the PD one refractory setting.

Data presented at <unk> indicate that PD, one refractory patients can be re sensitize to immunotherapy and we expect to test wide user one in this line of treatment.

This strategy of second line dual checkpoint inhibition may be relevant for many tumor types, where PD. One directed treatment is given in combination with chemotherapy or VEGF inhibitor, but without your void in the frontline setting.

Moving beyond our two checkpoint inhibitors. We are pleased that the national Cancer Institute continues to advance our DNA damage repair inhibitor Trc 102.

In February the NCI initiate the first randomized phase two trial of Trc, one or two which is assessing trc wanted to stage III non squamous non small cell lung cancer in combination with chemo radiation.

The two arm trial will enroll 78 patients to assess the benefit of adding Trc wanted to to current standard of care treatment of Pemetrexed cisplatin and radiation therapy, followed by consolidated volume of treatment.

The primary endpoint of the trial is PFS and the trial is designed to detect an improvement in PFS at one year from 56% to 75%.

Enrollment is expected to begin in June of this year and results are expected in 2024.

Our fourth clinical stage asset is the <unk> 70 to the antibody T. J fourth Eni that tracon evaluating in a phase one study as a single agent and in combination with the checkpoint inhibitor to centric.

We are working to complete the trial, which was seen in the last visit for the last enrolled patient.

As a reminder, <unk> indicated their desire to terminate the T. J <unk> nine license following completion of the phase one trial for a payment to <unk> of $9 million.

Which is expected later this year.

This brings me to a legal update on the two disputes with our corporate partner Imap.

In February arguments relative to both of our of our agreements with Imap were heard before in international Chamber of Commerce Arbitration Tribunal under New York Law.

As we've noted in the past in March 2020, I Mab issued a press release announcing a strategic partnership with kg bio whereby kg bio received with the press release described as a writer first negotiation for exclusive rights to commercialize T. J fourth of your nine in multiple Asian African and middle Eastern countries for up to three <unk>.

$40 million in potential payments to IMF.

We believe that based on the kg bio license Tracon is entitled to receive a payment at that time under the T. J <unk> agreement.

Although <unk> has disputed that this payment is due.

Another dispute with I Mab regards our bispecific antibody agreement with them.

The dispute in this agreement includes issues related to IMAX to license and collaboration agreements with ABL bio in July 2018 that preceded our agreement with I Mab in November 2018.

On April eight 2020, we issued a notice of dispute regarding possible breaches of the T J <unk> and Bispecific antibody agreements as of today the.

The T J <unk> and Bispecific antibody agreement disputes are now under post hearing consideration by the arbitration Tribunal and we expect their decision later this year.

These arbitration claims are substantial and complex and the outcome is uncertain pending.

Pending results of arbitration Tracon continues to meet our obligations under the terms of both agreements.

We will promptly provide an update when the tribunal panel announced their findings.

From a business development perspective, we intend to continue to leverage our CRO independent product development platform and U S commercialization expertise to at first or best in class drug candidates and pursue additional external clinical stage assets that would complement our expanding pipeline.

Second generation immuno oncology targets continue to be of particular interest to us.

With the <unk> license, which closed at the end of 2021, we've executed five deals leveraging our product development platform that is designed to enable rapid and high quality development of our corporate partners novel drug candidates.

We believe our product development platform has earned additional credibility as a compelling solution for companies, who wish to access the U S pharmaceutical market with Tracon, taking on the clinical development cost and risk and our partners. It will retain a meaningful share of their products commercial profitability.

In addition to our profit share deal structure, we're exploring revenue sharing deal structures, whereby we conduct trials at cost plus and in turn tracon share and royalty and sub licensing revenues.

We have also begun to explore a model whereby we share our proprietary clinical operations capabilities to enable other companies to internalize such operations and avoid contracting with <unk> to execute clinical trials.

This could convert substantial cost and time savings for these companies.

At this time, Scott will provide an update on our financials.

Thank you Charles and good afternoon, everyone.

<unk> research and development expenses were $3 1 million for the fourth quarter and $11 1 million for the year ended December 31, 2021, compared to $2 2 million and $8 2 million for the comparable periods of 2020.

The increase was related to enrollment in the pivotal <unk> trial in 2021.

General and administrative expenses were $4 6 million in the fourth quarter and $17 5 million for the year ended December 31, 2021, compared to $2 million 8 million for the comparable periods of 2020.

The increase was primarily related to legal expenses in connection with the arbitration with imap.

Our net loss was $7 7 million for the fourth quarter and $28 7 million for the year ended December 31, 2021, compared to $4 3 million and $16 8 million for the comparable periods of 2020.

Turning to the balance sheet at December 31, 2021, our cash cash equivalents and investments totaled $24 1 million compared to $36 1 million at December 31, 2020.

We expect our current capital resources to be sufficient to fund our planned operations into 2023.

With that I will turn the call back over to Charles.

Thank you Scott.

As you have heard our business strategy is proceeding as planned allow me to recap with five key events to keep an eye out for this year.

First we expect to report an interim efficacy assessment at the 600 milligram dose of <unk> <unk> in the second half of this year.

We are on track to initiate a phase one two trial of our potential best in class utility for antibody why is your zero one in combination with <unk> to set the stage for first line development of the combination of our two checkpoint inhibitors in sarcoma.

Third we expect to further leverage our unique product development platform to build our product portfolio or to benefit other companies tired of being beholden to crows.

Fourth we expect to complete the T. J <unk> phase one trial this year, preventing I'm have the opportunity to terminate the agreement for $9 million and fifth we will report the arbitration panels binding decisions with respect to the outcome of the significant legal disputes with imap.

As Scott indicated our current cash runway extends into 2023.

Thank you for your time and attention and we are now available to answer your questions.

To ask a question you will need to press star one on your telephone and towards a question. Please press the pound key.

Standby, while we compile the Q&A roster.

Yes.

Our first question comes from the line of my Raycroft from Jefferies. You may begin.

Hi, Thanks for taking my questions Zander congrats on the progress.

Charles for the arbitration outcome can you put any more clarity or an estimate on when that could happen I guess will that be before the trial completes or after the trial completes.

So with respect to the trial.

Referring to the phase <unk> trial.

I'm sorry, the arbitration outcome.

Yes on the arbitration outcome.

I tried to provide as much information as I could it's a confidential proceeding.

We appreciate the opportunity to present, our point of view to the arbitration panel and the hearing in person or virtual in person has been completed in terms of the decision by the arbitration panel as I mentioned, we expect that later this year, but in terms of an exact timetable I cannot provide that at this time.

Okay. Okay.

Four.

I think in your three key update you said that you had 50 patients enrolled in the <unk> study at the lower 300, <unk> dose can you say what the final number is at the lower dose and.

For those patients.

Could you potentially provide more data or more updates around the lower dose patients.

Outside of the second half of the year update.

That's going to be for deciding whether you file for approval or not.

That's a great question way. So the trial continues to enroll vigorously we have enrolled more than 70 patients in the trial.

In terms of your question around and just to be clear the new patients that enroll starting in day, one and 600 milligrams is 80 and the new cohort of single agent <unk> 680, and the new cohort of <unk> plus <unk>. So those are 80, new patients that start dosing from day, one at 600, 600, and Thats the population in which the primary.

And pointed decided with respect to the trial.

Now with respect to the patients that already have enrolled as I mentioned, they can dose escalate to 600, and I think that will be very interesting data, especially the patients say is a 300 dose escalate to 600 and that may potentially be sufficient for a response in patients that had stable disease earlier. So that is an important data set in terms of win or.

At what time, we will disclose those data versus considered kind of package to disclose to the FDA I can't can't give you details there yet, but I do think your question points out that is an interesting separate dataset. I also think it's really an interesting data set because the FDA has made clear when you submit an application for approval they want.

Clear evidence that you've picked the right dose and now that we've gone up to 600, I think we'll have a lot of dose exposure data. Both at 300, 600, which then would be very useful as part of the BLA application to justify 600 milligrams is the proper and if you will potentially approvable dose. So it's.

It's great. It's great data to have the data in the existing 70 patients on trial, but in terms of how we and when we disclose that I can't tell you that but I do think it's all part of the same package that we expect to supply to the FDA as part of a BLA because it helps justify what we expect to be the approvable dose of 600 milligrams.

Got it that's helpful and just one clarification I know you said this earlier, but for.

When will those patients at the lower dose be eligible to bump up to be a higher dose what allows that to happen.

No great question. So it's basically when the amendment is approved at each site on a site by site basis than the patients that are on study at that site can immediately dose escalate and that's happened for example, several sites already.

Got it okay. Thanks for taking my questions. Thank you Mark.

And our next question will come from the line of Ed White from H C. Wainwright. Your line is open.

Yes.

Yes.

Good afternoon, Thanks for taking my question.

So Charles just wanted to come back to something you just said.

70 patients are enrolled.

How many of those are at the lower dose and how many are at the higher dose.

And for the 36 patients that you expect to see data from.

The interim data in the second half of the 600 milligram.

Is that can be 18 18.

<unk> monotherapy to 18 in the combo or how should we be thinking of that.

No I appreciate the questions and to be clear. So we've enrolled 70 patients prior to implementation of the amendments and there are additional patients now have enrolled under the amendment.

Does that 600 milligram starting from day, one as I speak.

To answer your question and to be really clear I. Appreciate the question. So with respect to the 36 patients where we expect interim efficacy data by end of this year. It will be much like last year. It will be 18 patients in each cohort.

In which each patient is going to at least three months, which allows at least two on steady scans to get a good idea of the.

Initial response rate in each cohort.

So we will report in the same we reported last year. This year will be 36 patients 18, each cohort each patient going at least three months with two scans.

And report that data expected by end of the year.

But to be clear those will all be patients that started dosing at 600 milligrams from day one.

Okay, Thanks, Charles and.

Just on the cash runway argue including the $9 million payment from I Mab.

We are not in terms of our projections.

Okay, Thanks, and just to be clear the arbitration doesn't concern that 9 million hits on other issues.

Right for the $9 million subject.

Subject to the arbitration or it is.

So what we've been able to publicly disclose based on terms of the license when we signed the license back in over 2018 as debt.

<unk> has the ability to terminate the phase one trial once it is complete for a payment of $9 million and so that's okay.

Condition, if you will the license.

Separate from.

The license terms the arbitration consideration is proceeding as we discussed with the hearing now being conducted in the decision now in the hands of the arbitration Tribunal.

Okay. Thanks, Charles Thank you I appreciate the questions.

And our next question comes from the line of Joel Beatty from Baird. Your line is open.

Hi, Thanks for taking the questions first one is on Trc 102 could you discuss the potential for the trial being turned by NCI to either lead into additional trials are potentially support approval.

Joe I appreciate the question and the welcome too.

The team in the sense, we really appreciate you picking up take on a new analyst.

And thanks for asking the question on tiers, one or two so I think it is a major advance for the program that the NCI, who we've been partnering with for almost 10 years on this program who is funded now five separate trials. The 102 has taken the step to actually fund an enrollee a randomized study.

And it is a very unique study in the sense. It standard chemo radiation with or without Trc 102, and then each arm get standard Devry map consolidated therapy.

The sample size of slightly less than 100 patients. So I think in terms of the endpoint. If we achieve end point I think it would be very likely we would need a confirmatory randomized phase III trial.

Although if the samples if the effect size or hazard ratio was quite dramatic I think there's a potential.

To think about moving that forward based on the data will come out of that trial, but I do think that that's less likely Joe I do think we'd have to confirm that with a phase III trial.

I would say the safety database for <unk>. So you wanted to would exceed what is generally required by the FDA for approval because it has been dose now in a total of six completed trials and this will be the seventh and so there is well over 200 patients that would've received study drug.

So, but that's I think is my general feeling but we really are excited to see randomized study rollout for this drug it's what the drugs really needed a clear proof of concept trial and we're looking forward to the results, which I had mentioned we expect in 2024.

Got it appreciate that and then another question could you discuss the ability of <unk> to scale up clinical trial development.

At the time line.

Around now when <unk>.

Study enrollment is well underway.

No I appreciate the question Joel So we definitely have capacity for more studies I mean, we're right now doing one.

The pivotal <unk> study, we're completing a phase one study mentioned, we expect to complete that this year and then we have scheduled to start that why it's 001 study within before map. So.

By end of this year, we will have really two studies ongoing.

Look at Tracon say in 2018 19, when we were advancing a separate asset forward, we were running about seven trials concurrently and if anything our processes have only improved since that time. So we definitely have capacity for additional assets.

We are quite selective in what we look for but we also feel that with the backbone of now of PDL, one and <unk> four.

Attracting another potential immuno oncology asset that could potentially pair with either or both of those assets could be really attractive so were hunting aggressively for potential new assets.

And depending on the nature of the asset we could potentially engaged in a profit share deal structure. If we are able to.

Licensed commercial rights I mentioned, we've also discussed deal structures, where we might do cost plus where we get a revenue share for eventual commercialization and then the third thing. We've discussed is I think a lot of companies really look at what we're doing and say I wish we could do that too and so we have discussed the possibility of teaching them are.

Platform.

Showing them how to become zero independent and the incredible cost savings that are enabled by zero independents. So I think those are all three opportunities for us to look for new assets or look to if you will leverage our platform, but we are aggressively looking for new assets now to answer your question.

Great. Thank you.

Thank you Joel.

Our next question comes from line of Nick Abbott from Wells Fargo. Your line is open.

Hey, good afternoon.

Thanks for taking my questions.

Just hoping to logistics the volume will be you said it.

By site.

Exercise prior to approval.

And in December .

Yes. Thanks for the question look I don't have an exact count, but we have 30 sites. In this study now with 29 U S sites and then we also have now a site in the United Kingdom, which has been a site. We've used in the past that typically has a very high accruing sites. We've opened about half the sites under the New Amendment and expect the other half to open by either end of this month or APRA.

I would say the sites have been pretty quick in terms of opening the study and I think it's because it's such an easy amendment. If you will that its the same study just double the dose.

But that's a general feel for how quickly sites have gotten open.

Basically sent the amendment into the FDA very early January it was approved by February as we announced we're dosing patients under the amendment as I speak including at the new dose starting from cycle. One day, one and expect almost every site to be opened by end of April if not every site.

Okay. Thanks, and then.

See you.

Can you explain that EQ CD 19 responses early.

And it gives you an opportunity to approach the agency.

So a couple of points.

I mean.

It does not really traditional question of equipoise.

Do you.

Gave the opportunity for both cohorts to get to.

This nine patients because if you go ahead with one cohort.

Why not just switch enrollment cohorts and then.

Treat the cohorts sequentially.

In parallel to accelerate that.

Triangle.

And then what would the result, what would your result.

What would you want to get going to the agency with nine responses early.

No. That's a great question I mean, we are committed to fully enrolling each cohort.

Based on the ongoing analyses and reviews by the data monitoring Committee.

And I think we're committed to that because we feel that there might be certain patients. Let's take for example, our target product profile let's.

As stated that we hit a 15% response rate with single agent and then we hit a 30% response rate with <unk>, plus Europe or just for sake of argument.

We also know that the doublet of immunotherapy will have a more toxic profile compared to just single agent in befall a map so.

It's really a balancing and so we expect to fully enroll both cohorts unless the DMC intervenes with the idea that we'll see better efficacy in the dual inhibitory cohort, but also increased toxicity.

And likely a lower response rate with better tolerability than the single agent cohort, but our goal is to see both cohorts reached the endpoint. So an individual clinician our real goal Nick has to approve the drug in two ways. It has to prove it as a single agent in with your avoid based on both cohorts, having nine responses at least and also theyre being a differential response rate between.

The dual cohort versus the single agent cohort, so that will be the premise by which we anticipate fully enrolling both cohorts and what we like about that it gives them the clinician the opportunity to potentially prescribed <unk> as a single agent in a patient who might really want to really benefit from a much.

More restricted safety profile versus say.

Typical patient.

Tolerate Julien.

No therapy and benefit from the higher response rates. So we like that potential dual approval because of the Optionality gives a clinician.

So with respect to your question here when we our anticipation is we'll hit nine responses in both cohorts, but I think hitting it in a single cohort just allows us to start approaching the agency about.

We've hit the endpoint and at least one cohort will.

We will continue enrolling both cohorts to the full 80 patients, but let's start discussing how we would initiate a filing strategy. So it just lets us potentially interact with the agency on a closer means to facilitate the filing strategy, but to be clear our goal will be to fully enroll both cohorts and our goal remains a potential dual approval to allow <unk>.

You'll agent and potentially combination and <unk> to be approved in refractory <unk> and MFS.

Okay.

And then.

Cumulatively cumulatively how much is the company spent on the arbitration.

Cds with I Mab.

And we haven't given those exact numbers, Nick but if you look year over year in G&A expense the majority of the increase.

From 'twenty, one over 'twenty it can be attributed to the arbitration and the Delaware lawsuit.

Okay.

And then just last one for me and that is what you said earlier that the $9 million.

Do you expect to receive from behind that.

I'm just interested in the mechanics areas that enrollment had this vision of new channels.

A bag of cash walking up to the drugs.

So <unk> got the bag of cash looking into the drops.

Yes, the big Binder full of data.

Yes.

Could it be putting that is currently.

The payment does it take you into 'twenty Google.

Sure.

Well.

Maybe we should add some security forces to our team.

[laughter].

I think we are confident.

<unk> decided to terminate the agreement build fulfill their license obligations and make the payment.

In terms of the.

Can't go into the kind of the details of how that works, but its very carefully spilled out in the license agreement.

In terms of the capital runway I would say if you look.

In the past before we were involved in this legal dispute I mean, our runway in terms of what I mean.

I'll give you. An example, 2020, our total expenditures were $18 million so.

When you think about how cost effective we are with respect to running our business $9 million in 2020 would've given us six months of runway. So we continue to execute on that very efficient operations model and that should give you some perspective on how much $9 million, Rick how far would go given R. R.

Our efficiencies.

Great. Thanks, Harold Thanks, Nick I appreciate it.

As a reminder, that's one for questions Taiwan.

Our next question comes from the line of Matthew Cross from Alliance Global Your line is open.

Hi, good afternoon, and thanks for taking a couple of questions from me.

Wanted to ask I was curious if.

Just anything you could say regarding whether or not we would see some some further data.

Potentially.

Pat.

Geared towards precision indications for why is your zero one.

Later this year or between.

Discussion of the design details for the phase one to that.

Set to begin by the second half of this year.

I was curious to get any kind of design implement details that you could provide at this time or any data to make point us in that direction I guess any any particular considerations, we should be thinking about for the effort given the enhanced properties relative to your board.

I appreciate it Matt yes.

Yes, so for <unk>, we're going to implement as a phase <unk> trial and the design of that trial. So actually everyone actually has a lot of clinical data behind it it's been steady both as a single agent in a phase one study and also as a combination combination agent with the PD one antibody Tory Palo map in a separate phase one study so.

As a well characterized if you will safety efficacy and PK profile through those two separate phase one studies. So we plan to combine <unk> with <unk> initially and expect us to use the <unk> currently in <unk> with the wider zero-zero, one recommended phase two dose from the phase one studies to confirm that is tolerable and then take.

Dual checkpoint.

Regimen and add that onto doxorubicin chemotherapy with the knowledge that in most cases, you can give checkpoints with chemotherapy without.

Too much issues of overlapping toxicity, so that triplet would be the goal coming out of the phase one portion of the trial and then we would use that triplet in separate cohorts of phase II patients.

And we haven't gone into detail brown, those cohorts, but it might be three or four different histology of sarcoma.

Knowing we wouldn't add UBS until we finished <unk>, but there are several other histology is where the combination of chemo and dual checkpoint inhibition could be quite interesting and the real goal of that phase one two trials to define the subtypes of sarcoma that clearly respond to that triplet better than docs single agent historical data.

And then take those subtypes and take those into the eventual phase III trial, which would be our post approval commitment study coming out of the expected <unk> approval through <unk> so to be clear. The ultimate goal is that we will go frontline with docs with or without Envos plus <unk> 001.

Compared to <unk> single agent and the key will be which subtypes of sarcoma should be enrolling that trial.

And clearly Ups's MFS would be one of them based on the anticipated and.

Approval, but the other subtypes would have be defined in part to this phase one two trial of white shoes are <unk> docs looking at response rates compared to historical docs data. So that's why it's such an important trial for us it really informs as to who enrolls in the expected.

Frontline randomized phase two trial that we expect could significantly expand the labeled <unk> and then also be the basis for approval of <unk> zero, one broadly in sarcoma frontline.

Got it no. Thanks, Charles I appreciate those those kind of <unk>.

And what Youre looking to do and participate.

Okay.

And then just one quick confirmation wanted to.

Now that you've mentioned that the NCI has started up the phase two trial with one or two.

Just to confirm it looks like a decline.

And survival endpoints, but given the readout you alluded to being in 2024 from that study.

There's only so much you get what we see in the theater sponsor trial in terms of.

Direct oversight, but was curious if there's been any discussion regarding the profitability for kind of interim response level.

Hi.

Or is it.

This is kind of a long haul for safety and that's fine as well, but wanted to get some clarity there.

Yeah. Good question I mean, I think the key endpoint on that study, which I would expect to be an approvable end point is progression free survival and the primary endpoint is one year PFS with the goal to increase that from 56% in the control arm to 76% in the test arm that includes Trc 102 in terms of interim assessments prior to that I wouldn't.

Count on anything per se, but as you pointed out that's out of our hands in the hands of the CTF investigators running the trial, but I wouldn't count on anything happening prior to the actual determination of the the one year PFS.

Perfect I appreciate the confirmation trial that.

It does it for me Thank you Matt.

Thank you I'm not showing any further questions in the queue.

I'll turn it back over to Dr. <unk> for any closing remarks.

Just like to thank everyone for their participation and questions and listening wish everyone. A great day and look forward to talking to you next quarter. Thank you.

This concludes today's conference call. Thank you for participating you may now disconnect everyone have a great day.

[music].

Sure.