Q4 2022 aTyr Pharma Inc Earnings Call

That seems ladies and gentlemen, and welcome to a tire pharma fourth quarter and full year 2021 conference call. At this time all participants are sent home and then later, we will conduct a question and answer session and instructions will be given at that time, if anyone should require assistance during the conference. Please press star.

Then zero on your Touchtone telephone as a reminder, this conference is being recorded for replay purposes. It is now my pleasure to hand, the conference call of acute Ashley didn't Syn <unk> director of Investor Relations and corporate Communications. Mr. Dunson, you may begin.

Thank you.

Afternoon, everyone.

Thank you for joining us today to discuss fourth quarter.

21 operating results and corporate update we are joined today by Dr. Sanjay Shukla, our president and CEO and Ms. Jill Broadfoot.

On the call Sanjay will provide an update on our corporate strategy, including our clinical program for <unk>.

And our research and discovery programs.

Including a preclinical program for a T Y R 20.

Joe will review the financial results and our current financial position before handing it back to Sanjay to open up the call for any questions.

Before we begin I would like to remind everyone that except for statements of historical facts. The statements made by management and responses to questions. On this conference call are forward looking statements under the Safe Harbor provision of the private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially.

All those in such forward looking statements.

Please see the forward looking statement disclaimer in the Companys press release issued this afternoon as well as the risk factors in the company's SEC filings.

Lisa.

Our Form 10-K quarterly reports on Form 10-Q , and in our other SEC filings undue reliance should not be placed on forward looking statements, which speak only as of the date. They are made as facts and circumstances underlying these forward looking statements may change.

Except as required by law, a tire pharma disclaims any obligation to update these forward looking statements to reflect future information events or circumstances, I will now turn the call over to Sanjay.

Thank you Ashley.

Good afternoon, everyone and thank you for joining us for our fourth quarter and full year 2021 results conference call.

2021 was a milestone year for a tire.

Which culminated in a critical proof of concept for our lead therapeutic candidate absolute fit a mug.

Which was formerly known as a T Y our 1923.

And validation for our trna synthetase biology platform.

The positive results reported from our phase one b to H study, so should a mob.

In pulmonary sarcoidosis suggest that this novel immuno modulator has the potential to be a transformative disease modifying therapy for patients.

With this in other fibrotic lung diseases with high unmet need.

Yeah.

We've carried this momentum into the start of 2022.

The receipt of the U S food and drug administration or FDA orphan drug designation for <unk> for sarcoidosis underscores the significant unmet need for new patient treatments for these patients.

Positive end of Phase II meeting with the FDA has provided a path forward to initiate it planned Registrational study all their sofa tomorrow that will incorporate their feedback.

Preparations for this study are underway and we are on track to initiate this study in the third quarter of this year.

We also remain on track with the R&D, enabling work for a T Y R 28, 10 or 28 10.

Our lead anti neurocrine to or an RP two antibody.

And we expect to initiate a phase one study in cancer patients in the second half of this year.

Importantly, the strength of the proof of concept data for so put them all I provided the opportunity to generate the necessary capital to carry out the plan Registrational trial, which we expect to be the highest value driving catalyst for a target.

We ended 2021 with approximately $108 million in cash and our strong balance sheet positions us well to advance our clinical programs and progress our pipeline in the year ahead.

As we begin I will summarize a few highlights since we last spoke in November .

We will be proceeding with the advancement of <unk>, probably circa doses. Following a positive end of phase II meeting with the FDA.

We received orphan drug designation from the FDA, perhaps a few demand for the treatment of sarcoidosis.

We announced an agreement with Fujifilm <unk> Biotechnologies, a leading contract development and manufacturing organization for biologics viral vaccines of viral vectors for the manufacturer of EFS Sofia demand.

And we had a poster accepted for presentation at the upcoming American Association for cancer research or ACR annual meeting that details additional preclinical data generated for 28 town.

Cancer.

We're very proud of all that we accomplished in 2021 and we're off to a strong start thus far in 2020 to.

That provides a solid foundation to execute on what we expect to be another highly productive year for a tire.

Let's begin talking about our clinical program for us so fit them out.

<unk> as a potential first in class immuno modulator for fibrotic lung disease.

So fit them out as a novel FC fusion protein based on the naturally occurring splice variant of the lung enriched trna synthetase hardest fragment.

That downregulates aberrant immune responses and inflammatory disease states.

<unk> has been shown pre clinically to down regulate inflammatory cytokines and chemokines signaling.

And reduce inflammation and fibrosis.

And our <unk> is up regulated on key immune cells known to play a role in inflammation and is enriched in inflamed lung tissue.

Absolutely fit about bind selectively to NRT and therefore has the potential to normalize the immune system serving to resolve inflammation prevent prevent progressive fibrosis.

And thereby stabilizing lung function and alleviating morbidity and mortality for patients.

We're developing <unk> as a potential treatment for patients with fibrotic lung disease, initially focusing on patients with interstitial lung disease or ILD, a group of rare immune mediated disorders that can cause progressive fibrosis.

Our initial ILD indication, perhaps a fit a modest probably circa doses.

Sorry could doses is an inflammatory disease characterized by the formation of granulomas or clumps of immune cells and why.

On a more organs of the body.

So I could doses that affects the lungs, it's called pulmonary sarcoidosis in the lungs are affected and more than 90% of sarcoidosis cases.

The formation of these granulomas is driven by persistent aberrant inflammation.

And if left untreated it can lead to irreversible scarring of fibrosis diminished lung function.

Which may lead to respiratory failure or the need for lung transplant.

We estimate there are close to 200000 patients in.

In the U S with pulmonary sarcoidosis, although estimates do vary.

About half of all patients will require some form of systemic therapy.

And unfortunately, 30% of all patients will have chronic progressive disease despite available treatments.

The current standard of care. It typically includes treating the inflammation with corticosteroids and other immunosuppressive therapies, which can help manage inflammation and alleviate symptoms such as cough and shortness of breath.

However.

They have no demonstrated efficacy of disease progression and can result in serious long term toxicity.

Additionally, many patients do not respond to currently available treatments.

There is substantial need for a safer more effective treatment.

That could reduce or replace the requirement for chronic corticosteroids or other immunosuppressive therapy.

And prevent disease progression.

Considering that poly sarcoidosis as a rare disease with limited treatment options, we filed a request with the FDA to obtain orphan drug designation for us they'll fit them up.

Orphan drug designation is granted to support the development of medicines for patients with unmet needs for disorders affecting fewer than 200000 people in the U S.

This designation provides certain benefits, including the potential for seven years of market exclusivity following regulatory approval.

Exemption from FDA application fees and tax credits for qualified clinical trials.

We are pleased to announce earlier this year that the FDA granted orphan drug designation for <unk>, so for demand for sarcoidosis.

This designation emphasizes the need for new treatment options for these patients and will help support our advancing clinical program and future commercial strategy.

The orphan drug designation followed the positive results from our proof of concept study for <unk> and probably circa doses that we reported in.

In September 2021.

Let's briefly recap some of the key findings from that important study.

Regarding safety and Tolerability.

Monthly dosing of <unk>, <unk> was safe and well tolerated at all doses there were no drug related serious adverse events and no signals of Immunogenicity.

Regarding <unk> reduction in some of the other exploratory assessments of efficacy the study demonstrated a consistent dose response.

And improvements compared to placebo across all key efficacy endpoints.

These included steroid reduction of 58% overall from baseline compared to placebo insert usage post taper in the five milligram per kilogram per kilogram treatment group and a 49% overall from baseline.

<unk> compared to placebo and the three milligram per kilogram treatment group.

Complete steroid taper to zero milligram was achieved and maintained for 33% of patients in the five milligram per kilogram treatment group compared to no patients than any other group.

Clinically meaningful improvement in forced vital capacity or SBC.

Which is a measure of lung function at.

At week 24 up three 3% in the five milligram cohort and two 8% and the three milligram cohort.

Both compared to placebo.

Clinically meaningful improvement over placebo observed for symptoms and sarcoidosis specific quality of life indices in the five milligram.

And three a milligram treatment groups.

Finally dose dependent trends of improvement in key inflammatory biomarkers compared to placebo with control.

In all <unk> treated groups.

To the best of our knowledge. This is the first randomized placebo controlled trial of any therapy for pulmonary sarcoidosis that demonstrates effects.

On physiologic and quality of life measures concurrent with steroid reduction.

These findings confirm the potential up so put them up to be a tremendously impactful therapy.

We plan to present some of these findings in more detail in several posters that have been accepted for presentation at the upcoming American thoracic Society or Ats International Conference, which is scheduled to take place May 13 through 18 in San Francisco This year.

We've also submitted a manuscript with full results to a major medical journal to be considered for publication in the near future.

Following the proof of concept results, we met with the FDA in a type b end of phase two meeting to.

To discuss these data and subsequent clinical development and path to registration for absolute fit a mod for pulmonary sarcoidosis.

We're very pleased with the productive feedback we received and as a result, we intend to initiate a planned registrational study of <unk> in the third quarter of this year.

Following the Fda's review of the data package, including data from the non clinical program early clinical trials and the recently completed phase <unk> study, we are proceeding with the advancement of their sofa demand.

The FDA does.

Discussed endpoints that we detailed at our proposed Registrational study.

And prioritization of outcome measurements that would best support the evaluation of <unk> efficacy.

Including a combination of both objective and subjective clinically meaningful outcomes as.

As the assessment of these outs outcomes is what is most meaningful to providers and patients.

The FDA advised the continued evaluation of multiple doses of <unk> and <unk>.

A longer duration study to establish a controlled safety database that supports the determination of the optimal dose for chronic use.

While we saw the strongest efficacy effects in the five milligram per kilogram treatment group and the phase <unk> study signals of efficacy demonstrated in the three milligram per kilogram treatment group also warrant further exploration in order to assess the safest most effective dose rather than only a maximum affair.

<unk> dose.

In addition, the FDA determined that the completed ongoing and planned non clinical studies were considered supportive of clinical development.

And a waiver of carcinogenicity studies.

Our requirement was granted a waiver of that was granted.

Based on the weight of evidence from the non clinical studies no additional animal safety studies are required for this novel biologic.

We were fortunate to be joined in this meeting by some very strong supporters of this.

This includes Dr. Robert Balkman Professor of Medicine, and Pulmonologists at the University of Cincinnati Medical Center.

Dr. Boston is a world leading authority on sarcoidosis.

And he came away from the meeting impressed at the FDA appreciated the need for a therapeutic that demonstrates a steroid sparing effect in these patients.

We're also joined by Mary Mcgowan CEO of the foundation for Circuit doses research or <unk>, who is our partner for the phase <unk> study.

The MSR is a strong advocate regarding the need for safer effective treatments, including those that focus on patient centered outcomes and service.

Critical and much needed voice on the behalf of the circuit doses community.

This positive end of phase II meeting is an important milestone for HR.

And we now have a path forward to initiate a planned registrational study of <unk> that will incorporate the feedback we received from the FDA.

As the most advanced clinical development program for pulmonary sarcoidosis, we have an opportunity to establish efficacy endpoints that demonstrate clinically meaningful treatment effects, which will serve as the basis for future FDA review of other therapies and this significantly underserved disease.

Preparations for the study are underway.

And we are on track to initiate this study in the third quarter of this year.

We are working to finalize the protocol incorporating feedback from the FDA for <unk> submission.

We're planning for this study to be a large worldwide trial spending multiple centers throughout the U S and other countries.

In response to our proof of concept data we've received excellent interest from physicians, who may want to serve as the investigators and.

And we intend to implement a robust clinical operations plan that will permit us to opened numerous clinical trial sites to support timely completion of this next study.

Sure in Pharmaceuticals, our partner for <unk> for ILD in Japan will be an important part of this study having successfully completed a required phase one safety study of <unk> in healthy Japanese volunteers, which permits cure to join this late stage study in pulmonary sarcoidosis patients.

John will manage all operations and enrollment in Japan in May intend to use this data to support their own filing of <unk> in Japan.

As we've mentioned before we plan to be active at the upcoming Ats conference in mid day, and anticipate being able to provide additional updates on this program.

At that time.

Now, let's take a few minutes to discuss our preclinical programs.

Through a broad receptor screen for <unk>, which is derived from the trna synthetase hards, we discovered its binding partner MRP too as a target.

<unk> is a salt surface receptor that plays a key role in lymphatic development and in regulating inflammatory responses.

<unk> two binds to multiple ligand and co receptors to influence various cellular function. So we believe it's a compelling therapeutic target not only in inflammation and fibrosis, but also cancer to.

To approach this target in a manner distinct from EFS will fit a model we developed the panel blocking antibodies to selectively target distinct domains of this untapped target, including those interacting with <unk> VEGF and certain chemo kind such as CCL 'twenty one.

One of the blocking antibodies, we developed 28 to 10 as they fully humanized monoclonal antibody that selectively and functionally blocks the interaction between <unk> and veg F.

This novel antibody.

Is there a lead candidate to advance the clinical development for cancer, including aggressive solid tumors with increased <unk> expression.

Which is linked to worsened patient outcomes and promotion of resistance to certain current therapies in cancer.

We've generated a body of compelling preclinical data in multiple aggressive solid tumor models, including triple negative breast and non small cell lung cancers, demonstrating significant effects on tumor growth with the treatment of 28.

When administered in combination with widely used anti cancer therapeutics, including.

Chemotherapeutic agents, such as cisplatin or targeted VEGF antibody.

Susan map.

We again key mechanistic insights regarding the ways of which 28 <unk> mediate its anti tumor effects.

And as we continue to generate valuable data for 2008 attempt to determine tumor types and exact treatment settings in which is novel <unk> antibody may demonstrate the most beneficial treatment effects.

We plan to present some of these new findings in a poster at the upcoming ACR annual meeting on Monday April 11th in New Orleans.

The presentation will further characterize the shared elements that renders certain solid tumor types are responsive to 28 treatment.

We're in the process of completing the required work for 28% to support its planned clinical development in oncology.

We're currently finishing up some remaining IND, enabling activities and honing in on selection of an indication.

Manufacturing activities with our partner Lonzo remain on track and we expect to initiate a phase one study of $28 million in cancer patients in the second half of this year.

Finally, we continue to mine our trna synthetase biology platform, which is the foundation for a tire science and approach to drug development to discover new targets and signaling pathways affected by these extra cellular fragments in order to yield new pipeline candidates.

There are 20 trna synthetase gene families in our intellectual property portfolio covers protein derivatives from all of these with over 300 protein compositions patented.

I'll now turn it over to our Chief Financial Officer, Jill Broadfoot to review our financial results.

You Sanjay.

I'm happy to report that we ended 2021 with $107 9 million in cash cash equivalents and investments. This includes net proceeds of approximately 86 million raised through a public offering in September 2021, a milestone payment.

Received from our partner Kieran and use of our equity vehicles.

On the expense side research and development expenses were $23 3 million for the year ended 2021, which consisted primarily of product development costs for <unk> and 'twenty 810 programs.

Program costs are also said Mod included preparation for the upcoming planned Registrational trial in pulmonary sarcoidosis, which included manufacturing of clinical trial material and initiation of technology transfer activities with Fuji film Donaldson technology.

<unk> costs for 2810 included costs related to the IMD, enabling activities and the initiation of manufacturing activities with long haul.

General and administrative expenses were $10 8 million for the year and 2021. This one included an increase in the number of employees as we prepare for the planned registrational trial in pulmonary sarcoidosis and a phase one clinical trial of 28 panel.

Common shares outstanding were $27 8 million and fully diluted shares were $29 2 million as of December 31, 2021.

For 2022, we expect an increase in expenses as we prepare to initiate two clinical trial.

In addition to the clinical trial costs, we will continue to incur manufacturing expenses for the tech transfer to Fuji film and additional clinical trial material and manufacturing costs for both <unk> and 'twenty eight.

We expect some of those expenses to be offset by a potential double digit milestone payments from current which is based on certain clinical development goals that we expect to achieve this year.

With our current and projected year end cash position, along with a clean balance sheet.

Feel like we're in a strong position to carry out our key catalysts or this year now.

Now I'd like to turn the call back over to Sanjay before we open it up to Q&A.

Thanks Jill.

Overall, we're delighted with all that we achieved in the past year.

Generating clinical proof of concept for our lead therapeutic candidate have so for the month.

Which also validated our trna synthetase platform.

<unk> as a target.

We progressed IND, enabling activities for 2810 and continued to use our trna synthetase engine to generate new targets.

<unk> pathways.

Warrant further exploration of potential pipeline candidates.

We invested in manufacturing for both <unk> and 'twenty 810 to assure the necessary clinical trial material to support future studies.

And we raised valuable capital that shored up our balance sheet and puts us in good position to continue to advance our programs.

With the receipt of the orphan drug designation for <unk> for demand for circuit doses and the positive end of phase II meeting with the FDA, we're intending to initiate our planned Registrational study in the third quarter of this year.

Our partner <unk> in.

In Japan will join this study and we expect upcoming clinical development activities for us.

<unk> this year to yield a milestone payment.

Adding to the $10 million received thus far under this licensing agreement.

We're also on track to initiate our phase one study for 2018 and cancer in the second half of this year.

Which will put us with two newly initiated clinical trials for this year, which.

Which we expect to serve as key value drivers for a tire in the years ahead.

We appreciate your interest and continued support at this time, Jill and I will be happy to take your questions.

Thank you, Sir ladies and gentlemen, if you have a question at this time. Please press star one on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue press the pound key again Thats star one to ask a question. Your first question concerned the line of Ken <unk> with RBC capital.

Mike. Please go ahead.

Hi, Thanks for taking my question and congrats on the progress.

The first question is on 28 10.

As youre moving that into the clinic are there any indications or.

Or sort of broad classes.

<unk> largest invitations that stand out as potentially the most amenable to treatment, whether solid or liquid tumors.

Are there any biomarkers that you could potentially be indicative of a higher likelihood of response based on your preclinical data.

Second question is.

He is on.

That's a bit of Mod and just just wondering what the.

The final.

Yes.

<unk> towards getting the phase III design finalized.

And as we get a little bit closer to Q3.

And congrats again.

Great. Thanks, Ken for the question. So your first question about 28 10.

We are very much anchored to solid tumors and there was enough.

Quite a bit of literature.

On which is why we targeted European here that <unk> two was.

Basically associated with some some really poor prognosis in some pretty aggressive forms of cancer.

Triple negative breast cancer lung cancer also.

Renal cell neuroendocrine phenotypes. So we've really focused on solid tumors first and foremost and we are now looking at those particular tumors, where we've seen 28 10, most effective in our fleet.

Preclinical animal models.

So what I've said here is we're focusing on those neuropil, an enriched tumors. It appears as though when resistant starts to develop for many of these cancers to current agents.

We may be able to look at how neuropil them as further expressed perhaps as a resistance mechanism.

And this is the sort of work that we're currently going to be highlighting at ACR coming up here next month. So I would say stay tuned here as we get closer to an indication, but just based on historically, what you've seen here we.

We see some really nice effects of 28 to 10 in solid tumors expect this next indication to be a solid tumor that is enriched with neuropil and signature. We continue to look at other biomarkers right now to hone in on which tumor types are the most responsive.

And we're doing so in a very sort of systematic data driven manner. So that once we launch the phase one trial, we expect 28 to 10 to demonstrate hopefully good objective response.

In whatever sub class of solid tumors.

We go after so stay tuned there I think thats.

Work, that's nearly <unk>.

Progress quite a bit here in the last couple of years are nearly complete.

To your second question around if so fit them on really at this point kennan.

We've taken the feedback from the FDA there was a significant amount of feedback.

The most productive meetings I've ever had in my career as a drug developer very collegiate very collaborative.

I think we're going to now be able to we have a clear understanding on how to.

Prioritize the endpoints the design of this trial, the statistical modeling and the assumptions and this will now be submitted as part of the 90 package.

Once we actually receive approval that's.

That's the time for us to sort of them.

Really get into all of the details I want to I want to allow the FTA.

The ability to.

Prove what they told us to go after.

No reason I think sometimes biotech companies can jump the gun here and we.

We don't want to annoy our partners at the FDA, we feel pretty good about following the path that they have sort of mapped out for us around with their guidance and I expect and I are successful IMD here in the short in the short future.

Perfect. Thank you.

Thank you. Your next question concerns the line of Ted <unk> Piper Sandler. Please go ahead.

Great. Thanks, very much for the update.

Ceiling, where you were just saying that there is.

Still a little bit of.

Follow up to have with the FDA.

For the Phase III trial design I'm wondering if you can give us.

Uh huh.

Or what the doses or how many doses might be included in the Registrational study with this go back to doses that were.

Evaluated in the phase on these types of two way or could this even look at potentially higher doses.

Hi, Ted Good question there so we are.

Filled with the efficacy that we observed.

Certainly with five milligrams, but also with our three milligram cohort and this was something that we discussed with the FDA.

I think.

There was very much a viewpoint from the agency that we saw robust clinical efficacy in three milligrams as well.

So I think the guidance was perhaps.

I'm paraphrasing here, but don't give up too soon on three milligram. So this will allow us to look at three and five I think one thing to remember with a biologic.

There is always that concern that if you keep pushing the dose higher will you find some kind of off target effects, we have been fortunate.

Pre clinically nonhuman primates healthy volunteers. This study to have good very good consistent tolerability and no issues, but as you can imagine when you get into a larger trial. There is always that potential we think by adding perhaps a three milligram arm into the next trial. In addition to five milligrams will be able to.

Derisk the program, even further because it effectively gives us another shot on goal.

In the event that we do see anything developing five milligrams three may be a very effective dose and this happens quite a bit biologics. So we like both of those two doses to your question about going higher we have done some post hoc modeling with a very very well known clinical pharmacology group.

We are.

We are very very confident that we have.

Cheap EMACS at this point, yes.

As we pointed out the five milligram effects, we see here are so above and beyond the threshold of what is clinically important we really think we have a winter certainly at that dose.

Look at our three milligram data to.

Also our beyond the clinical thresholds of improvement meaningful improvement there as well so both of those.

We took that feedback to heart.

It's a smart way of approaching the next trial.

Yes really helpful. I appreciate that color.

Maybe just a quick follow up.

Oh, how big of a safety database is the FDA looking for or how many patients do you think you might need to enroll.

Per arm with with the controls thanks.

Yes, so thats another great question I mean, Mike My General view is the patient safety database.

FTA for most indications.

Mike.

200 patients that have had long term.

Exposure, it's what I've always been trained in drug development to aim for that number within rare disease. It can be sometimes hard to get to that number remember, we thus far have experienced human data.

North of 30 40 patients if you even go back to our healthy volunteer trial. So in this next trial for example.

If we were to have these two doses.

Sure.

You might actually have say closer to 150 patients exposed in a <unk>.

While that might be out to a year you add that to the 30 or 40 patients that were previously exposed to <unk>, we're getting closer to that safety database. This is another reason why it's good to also look at another dose and the next study it adds to the body of evidence that your drug is safe well tolerated and then.

You can basically say well what does the efficacy look like between three and five because both of them performed outstandingly.

The last trial.

That's really helpful. Thanks Sanjay.

Thank you. Your next question comes from the line of Sandeep Cholla.

Please go ahead.

Yeah. Thanks for taking my question just a couple ones here for you I think the first is just about whether or not but at the minimum that you will need to go lower than three milligram, just because you mentioned.

Adding to determine whether <unk>.

So again with the minimum efficacious so.

So could you maybe have like two milligram for example.

No I think I think at this point, having tested three and five both observed as safe and both are showing really nice activity in our previous trial, we're going to go with what works and I think thats, primarily what the discussion was with the FDA.

I think those are the two doses to anchor on as.

As we think about the next trial.

Thanks, Sanjay and we've asked this one before but I was just wondering if there is any change to the strategy around the patient population being enrolled into the study.

Disease severity, because I think when the key things that you wanted to do with the last study with make sure the patients werent too far gone, meaning to fibrotic. So is that the same impact here to go after that same patient population and we have a few things very similar enrollment.

Enrolment criteria or at the next study.

Yes, yes, that's a great question and again, we want to stick to what's work working right not tinker too much with the outstanding results. We had last time, but you are right from a rationale perspective trying to get the patients that had a bit more inflammation a bit less fibrosis.

We're able to actually disease modify these patients a little bit easier. So we will be putting criteria similar to what we had in our last trial you might see.

More patients come in one of the things we're discussing is potentially lowering the threshold of entry when you go to Japan other parts of the world.

A heavier dose of prednisone might be seven five.

So this could also be something that we're thinking about in certain sort of areas.

Areas of the world, where practice might be a little bit different. The other thing to remember is we had this signal of patients getting to zero. So thats really really got gotten a lot of patients interested to get involved in our trial. If youre sitting there at say eight milligrams a day that you've been taking that for the last decade, why shouldn't you maybe have the opportunity to try to.

Get off steroids.

That's the kind of patient population that I need to listen to to potentially get involved in our trial.

On the whole we will be looking for a phenotype that is highly inflamed not yet very very much scarred and having that sort of end stage sarcoidosis and I think worldwide trial. We also have to think about how treatment is slightly different in different parts of the world.

Depending on practice patterns there so.

Stay tuned for that I'm really.

Excited to get the details out as soon as we get the Green light post an approval.

Approval.

Thank you and I'll just.

Double my last two questions, Yes, I think that the next one is for Joe. So you have a really strong cash balance, but I was just kind of wondering in terms of the milestones from Kieran M D.

We expect to receive another milestone payments when you start the phase III that and apologies if you've already mentioned that and then the second part about that is whether or not QM logistic covering expenses associated with <unk>.

<unk>.

We help them with additional expenses will also be leveraging some of the data in the U S and perhaps elsewhere as well and then the last one.

<unk>, Ken just wanted to clarify.

What's needed.

Pinning down the timing of the IMD.

Generally the second half of 2021 I was just wondering what are some factors driving that is it difficult to determine that the indication is that the.

The manufacturing component of what's driving that and the timing of the R&D. Thanks, again and congrats on the progress.

Hi.

I'll take that Karen questions with regards to the milestones have we received $10 million so far.

Our.

Allowed relate to talk about the specific.

Milestone triggers per se, but it will be related to the initiation of the phase III trial.

And in their territory.

So that we are looking forward to hopefully that'll be joining the trial soon after we initiate and in the third quarter.

And then when they do initiate their trial cost like you said theyre paying for all of their trial cost.

And.

Good day.

They are paying for anything in the U S. So that is completely separate and we're able to structure that that clinical trial. So that we have kind of a good distinction between those two but what they are also painful or is the clinical trial material that there'll be using in Japan, and that's a cost plus base.

It's just a small markup, but that will be another way, where we'll be able to generate a little bit of income and that third or fourth quarter of this year.

I'll take your 28 10 questions I mean really we.

I want to get the <unk> trial.

<unk> and on the on the track really nicely and launch that really first we're prioritizing that.

With regard to 2008 to 10.

I think what youre going to see us as a start to that trial shortly thereafter.

Right now we're coalescing on indication selection I think some of the academic work we have coming out there is going to give you a better indication around the types of solid tumors were targeting there. So I would just say that right now.

We're excited to have two clinical trials really launched this year and I think it provides a.

A real view for investors to start thinking about these are the these are the programs that are going to drive future value here for us at any time.

Thanks, Sanjay and looking forward to the data at ACR.

Me too.

Thanks for the question.

Thank you. Your next question comes from the line of P&L, Jen with Laidlaw and company. Please go ahead.

Good afternoon, and thanks for taking the question.

And my congrats to you guys as well just got too here. The first one you're supposed to engage that you did mention about the functional.

And point during your prepared remarks.

Are you, suggesting or potentially that will be the primary endpoint.

Consider for the Phase III study or are we reading too into too much of that and still to be determined.

Yeah.

Yes.

No.

We know the.

Following feedback from the FDA, what I can tell you is.

Steroid reduction was.

Big discussion that we had and I think you read some of the comments from Dr. Boston that there was a real appreciation that.

This in many ways may be the most meaningful endpoint for patients and providers.

We also know FPC has been used for the IPF drugs to get approved but there is an understanding that IPF may not.

FCC may not be the best endpoint primary.

Primary from a primary perspective in sarcoidosis patients because it's a bit more variable compared to the fibrotic and more fibrotic lung disease. So I think I think there is a.

There was an appreciation that all of our endpoints moved into really nice direction.

Steroid reduction FCC improvement symptom improvement. So I think we had a a sort of.

A bevy of opportunity here for the FDA to guide us we've taken that guidance.

Now written a protocol.

And as I said stay tuned here, but what I can maybe highlight here is how impressed everyone has been around the ability to reduce and potentially even get off steroids that could really change treatment the treatment paradigm for.

Really millions of patients worldwide, who suffer from fibrotic lung disease, where really the first as I said therapy to show physiologic and qol effects.

While also reducing steroids.

And I think that is something that has the experts worldwide wildly.

Wildly excited about this as a therapy in the future.

Okay, Great. That's very helpful and maybe one more follow up here, which is doing earlier year early part of this year. You guys had suggested that you guys also want to explore in other I O D.

Just curious what's your thoughts at this more of a million in terms of potential timeline on that.

And.

It seems there is a two type of I O do you stop.

Maybe most relevant to you guys at this moment and any preference or any colors on that on that front.

Appreciate the question Yeah, Yes, we've demonstrated really nice animal efficacy data in scleroderma ILD.

And also pneumonitis models.

So as you are aware, we believe the therapy can be useful in those indications as well and patients do actually suffer from scleroderma related interstitial lung disease and chronic hypersensitivity pneumonitis.

As a small company we're prioritizing.

<unk> right now for pulmonary sarcoidosis those are indications, we can consider potentially in the future, but as of now for this year, we're really focusing on the face of this next phase trial for us to put them on and launching 28 10 in cancer. That's what our plan is for this year.

Okay, Great. That's very helpful again, congrats on the progress.

Yes.

Thank you. Your next question comes from the line of Joe Pat Kenneth Lee.

Leanne. Please go ahead.

Hi, guys good afternoon.

Couple of questions. So Sanjay you've gotten this question already in the I guess, the three iterations so far.

About the design of the pivotal study so I guess I would ask it this way.

I certainly agree with you that a lot of biotechs in the past have jumped the gun regarding discussions or talks with the FDA, but based on your experience I would certainly.

Think that you wouldn't have put out that press release, unless you already had the minutes in hand, So I guess I would talk to the minutes that have been published if you will and I guess.

Are there any open discussions about the endpoints about what might be the primary.

It was it was a major part of our discussion we received.

Great guidance, and we know how to basically set up the hierarchy now so it's pretty definitive.

Again.

I'm going to let I'm going to let the FDA.

Give us a green light.

Thing that we discussed.

But you got to be careful about putting this all out kind of.

In our press release as I said, we know the endpoints, which are prioritize we understand the duration of the study.

<unk> modeled this study now youre going to see a study that statistically.

We're not going to.

Cut any corners here, we're going to power it adequately so that when we hit that P value once the study reads out.

We will have obviously been a productive discussion around.

<unk> ability to move.

Move to the patients so.

What I can tell you is 10 points have been prioritized.

The length of the trial I had mentioned the three milligram and the five milligram a lean to move those two forward.

Be placebo controlled placebo controlled worldwide.

And I think just from a high E criteria, we want to stick to what worked in the previous trial.

And tried to replicate those findings.

I understand thanks, and then just one question sticking with the pulmonary sarcoidosis and then a quick one in 2018 is.

As cure and doing anything in the or what if anything is cure in doing in the background, while they're now other than say like manufacturing ramp up their own clinical trial preparedness.

Ahead of the pivotal study.

Yes, it's a cure and is going to obviously have their discussion with that Japanese P. M D. A.

That will follow you know very quickly here.

Prior to them launching in Japan so.

Drug drug product, we control that we have drug supply.

Unlike many biotechs we invested.

Quite a bit in manufacturing.

During the pandemic.

We're glad we did that because right now <unk> are pushing most biotechs out 612 18 months so.

So I'm glad I'm not reporting of that kind of delay between starting the next trial.

They in fact purchase material from us at a small premium so really for them, it's about getting that regulatory green light similar to us and then in a staggered manner they would.

Start the trial.

Opening up centers in Japan, and in enrolling patients there.

Got it got it and then just on 2018 and I just I wanted to make sure I heard correctly or if I misheard you when.

When you said about completing the IND D for 2018, I think I heard you say about selecting an indication for the phase one is that correct or is this more of a all comers in solids that might have the target expression.

Yes, I think that's the key question Joe there that when we submit that protocol for that D. What is that what is the design of that trial looks like and right now we're honing in on.

No.

Which if it is a basket trial, which exact solid tumors enriched with Neurocrine did we want to include in that trial or do we want to get a little bit more aggressive than focusing on one or two tumor types. So that's the discussions we're having currently right now with our scientific advisors in the company and some of our board members.

Obviously, you have a lot of oncology experience.

But that's a program that as we start to put out more data here at ACR youre going to start to see.

Which indications where sort of bucking and then the data is going to tell us which.

Where we should go.

As you know, we're a data driven company we follow the data to the outstanding results, we have with EFS will put them on we're running the same playbook here with 28.

Got it okay. Thank you.

Thank you. Your next question comes from the line at our TEG <unk> Singh with Oppenheimer and company. Please.

Please go ahead.

Great. Thank you thanks for the questions.

Thank you Jill everyone really really nice update I just got a few questions. Just go through them quickly Sandy I know youre going to wins went out.

Question on the primary endpoint primary endpoint question, but let me put it another way.

The pivotal study if you could it be possible for example to have an endpoint.

Analogous to a prime rate, where you had steroid reduction.

I'll, let say over 24 weeks.

And then.

For the full readout, so meaning that you could show steroid reduction over 24 weeks for.

Over the placebo arm or the control arm get approval interim on that and then readout whose study.

For a full approval if something like that even possible in pulmonary sarcoidosis.

And then I just got a couple of a couple of questions follow.

Well I like I like your question <unk>. It's a very you should you should come to our clinical development strategy meetings I like that our statisticians would love some of these ideas.

One thing about doing interim Readouts, you give up some of your alpha when you do things like that.

I'm not sure necessarily if I.

Would agree with that element of it. However, if you think about our trial, having three people getting off steroids or <unk> could certainly look at the risk benefit.

Certainly if our next trial, we have a number of patients getting off steroids that might be a better way for us to perhaps look at things in the interim but again I don't want to get into that yet until we actually put out the design, but I like the way youre thinking about things here with regards to kind of.

Objective and subjective endpoint, so steroid reduction FEC those two endpoints are going to play.

Key roles here in the hierarchy as we start to actually design. Our next trial because I think those two start to represent a pathway in my mind for a drug label, that's really meaningful here.

Patients.

Really want to reduce their steroids providers want to get people off steroids.

<unk> is another way for them to also look at that objectively to look at lung function.

Fortunately in our trial that we saw the kinds of reductions, 58%, 49% with our two doses and FCC improvement improvement.

Improvement more than two 5% and we had $2 eight and $3 three that kind of improvement has not been observed.

In this area of lung disease.

Really effort, maybe for 15 years here and as I mentioned, none of this has ever been observed in a trial, where we also are reducing steroids. So I think I think we have something really profound here with us so for the mod.

You'll bear with me with the primary endpoint is.

I said once once we launched that protocol.

Youll start to get it to get a view on that hierarchy.

Yes, no that's great that's great Sunday and like you said I mean, that's just a great great data. So that you had last year and continue to do so just a quick question on commercial I know kind of getting maybe getting ahead of ourselves, but <unk> been doing a lot of work you and the team.

Advocating investors and I think reaching out to the patient and physician community on steroid reduction on.

Soccer doses.

In a variety of venues can we expect that those sorts of activities to ramp up over the next 12 to 24 months as you get ready to start the pivotal one in phase III and then I have one last question.

Well, absolutely we've always thought this market is a $2 billion to $3 billion.

Our global market opportunity for apps so for demand are we.

Our numbers are rather conservative when you compare them to what others think especially.

The numbers when you think about ILD that big pharma has.

This is a space where steroids patients need to get off steroids, we need to do better than steroids steroids are not.

Helping with that progression of fibrosis.

Absolute amount right now is the most advanced therapy closest to the market has the ability to tap into this kind of.

Market opportunity $2 billion to $3 billion and that includes not only sarcoidosis, but other fibrotic lung diseases, where right now we need something better outside of IPF, even within IPF. Those patients remember are just sort of keeping their their lung function just at bay, but they are progressively getting worse.

There has been quite a bit of interest with our dataset.

To also potentially look at up so for the Mod in those patients that are flaring you know have inflammatory response. So we feel we feel really good that <unk> is going to play an important role in fibrotic lung disease.

For years to come if we can actually.

Get this drug approved and as I said the market opportunity is something that is large we will be talking a lot about a lot more about it as we get closer to the market here over the next year or two.

Great. Thank you. Thank you and then last question I don't want to frontline front run your Ats data and I'm sure you don't want to either.

The data readout last year.

Now you've had the time to talk to the FDA.

You've had time to talk to.

Patient representing groups finish.

Clinicians patients.

I'm sure you spent a lot of time looking at the data and how people felt about it.

What are the things that you really want us to try to pay attention to.

Specific data points to Etfs, but what is it about etfs that from all of you are talking to patients clinicians regulators that that really kind of excited too.

Head into that conference and again, thank you for all the questions.

Yes, I think as a preview to Ats.

Point here is our therapy I think now will really be when you are in the early earlier clinical trial.

Not sure novel agent what is it going to do.

But now that we are the furthest advanced therapy, and we have seen efficacy just across the board steroid reduction forced vital capacity improvement symptom improvement biomarker inflammatory biomarkers also well controlled very very well controlled by three and five milligrams.

It's that consistency of response.

Now, we just got to show that durability and a longer trial in the next trial.

And I think.

What youre going to see from experts out there in the field is how can <unk> really be.

A frontline therapy for not only sarcoidosis, but for really all fibrotic lung disease because steroids.

I said before on more academic calls with some of the experts steroids.

Steroids are poison in 40 or 50 years, we'll be looking back at the medical textbooks and talking about it as though why did we give this poison.

Patients with all the cardiovascular metabolic effects.

The health economics of steroids are horrible for patients the day to day quality of life. So we think we have a real winner there and then.

Wrapping it all up make sure the drug is safe and thus far we are tracking really well with that with the last couple of years of work. So I think it's going to be a real coming up moment, perhaps Sofia demand. If we can launch at American thoracic Society, we expect to receive quite a bit of buzz from the medical community.

We know how important it is to have a.

A game changing therapy for these patients.

Great. Thank you Sanjay.

We appreciate it.

And we have no further question at this time I will now turn the call back to Mr. Sanjay Shukla for closing remarks.

Great well great question today, I know theres a lot of interest.

We're right around the corner here from <unk>.

Hopefully really getting this as I said getting this trial on track here in the third quarter initiated just a few more things to accomplish here with our friends at the FDA.

But great questions today I appreciate the interest and we really look forward to.

Keeping you up to date here in the coming months, Thanks again, everyone.

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

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