Q1 2022 TRACON Pharmaceuticals Inc Earnings Call
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Good day, ladies and gentlemen, and welcome to Tracon Pharmaceuticals first quarter 2022 earnings conference call.
At this time, all callers 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, including statements regarding expected timing of clinical trials and results.
Tori activities future expenses and cash runway.
And our development plans and strategies this.
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, 2021.
Subsequent quarterly reports on Form 10-Q.
You are cautioned not to place on jewelry like reliance on them.
And these forward looking statements and we disclaim any obligation to update such such statements.
Now I would like to turn the call over to Doctor Charles two or <unk>.
Precedent N C O Tracon pharmaceuticals doctor to her.
Good afternoon, and thank you for joining <unk> first quarter 2022 financial results and business update call.
We'll 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 ended March 31 2022.
Finally, we will conclude by taking your questions.
I'll start with an update on our continued progress with the <unk> pivotal trial.
Call that in December 2021, the independent data monitoring committee recommended doubling the NV dose of 600 milligrams after noting that <unk> dosed at 300 milligrams was well tolerated and demonstrated a significantly higher objective response rate and lower weight patients.
This recommendation was incorporated into an amended protocol that was submitted to the FDA in January of <unk>.
Proved by the FDA in February and then approved by internal review boards or ethics committees at each of the 30 and research sites, including 29 sites in the U S and one site in the United Kingdom.
We believe the short time frame between amendment submission in January and Amendment approval by April at each of the 30 clinical sites is another demonstration of the value of Tracon zero independent product development platform that permits highly efficient interactions between tracon and the sites that conduct our trials.
We also noted in April that more than 10 patients had initiated treatment at the 600 milligram bid dose.
And restore enrollment continues to be brisk and as a result, we expect to report on three key interim data monitoring committee assessments this year.
First we expect to report to safety assessment in mid 2022, and three weeks and 12 weeks following enrollment of the 20th patient.
In the second half of this year, we expect to report on the interim efficacy assessment three months falling enrollment of the 36 patients to allow for an assessment of the preliminary response rate.
At that time, the data monitoring committee will apply a formal futility rule that requires at least one response and 18 patients enrolled into each of the two cohorts at the 600 milligram bid dose.
As a reminder, the <unk> trial includes one cohort who receive single agent <unk> and a second cohort who received and the in combination with your boy.
The primary endpoint in each cohort is objective response rate by resist as confirmed by blinded independent Central review, where duration of response being a key secondary endpoint.
And each cohort the demonstration of nine out of 80 objective responses by Central review or an 11.25% objective response rate to finds a level response. It satisfies the primary objective of the study.
Which is to statistically exceed the 4% objective response rate of boat trip.
The only approved treatment for patients with refractory EPS at MFS.
Notably voting as a drug with a black box warning for fatal liver toxicity.
We believe <unk> has the potential to transform the care of refractory sarcoma patients through the demonstration of superior efficacy.
And safety compared to vote for it based on data from trials of other checkpoint inhibitors and refractory UBS and MFS were targeting a 15% response rate for single agent <unk> and up to a 30% response rate for <unk> given with your boy.
Furthermore, we plan to approach the FDA to discuss a BLA filing strategy as soon as we determined nine responses in either cohort.
Our second clinical stage immuno oncology asset <unk> 001, a potential best in class utility for antibody licensed from <unk> Biopharma in October last year.
As a reminder, we received the broad license for wide 001 to develop and commercialize in North America in sarcoma and multiple other indications <unk>.
Including microsatellite stable colorectal cancer renal cell carcinoma, and kers positive lung cancer.
The note with respect to our license we can substitute any one of those indications for bladder cancer endometrial cancer melanoma at our election.
And these non sarcoma indications weitzner as one could be combined with existing standard of care agents included marketed PD one antibodies.
Our initial development plan for wide zero, one is to initiate a clinical trial in sarcoma in combination with <unk> in the second half of this year importantly, we can leverage data from two completed phase one trials White 001 performed by our partner you cure to inform our dosing strategy.
These two trials to determine the recommended phase two dose of <unk> zero, one as a single agent and in combination with a PD one antibody tour Palomar.
We intend to initiate a phase one two clinical trial studying a triplet that includes wide 001, <unk> and doxorubicin chemotherapy.
As Dr. <unk> is the current frontline standard of care treatment for sarcoma.
Following the phase one portion of the trial to assess the tolerability of the combination of <unk> and why it's zero one doublet as a.
As well as the triple therapy that includes doxorubicin.
We will assess the response rate of common and rare sarcoma subtypes to combination treatment.
With the intent of demonstrating superior response rates compared to historical data using standard of care agents for example, and Leiomyosarcoma. We plan to compare the response rate of Triple therapy to the historical 15% response rate of single agent Doxorubicin.
In the case of a rare sarcoma subtypes like Chondrosarcoma, where chemotherapy is not effective we plan to study the doublet of whites euros, you want at Edinburgh to assess the response rate compared to historical response rates of less than 5% with standard of care treatments.
One of the purposes of this phase one two trial is to determine the subtypes of sarcoma that respond best to the combination of <unk> and <unk> zero one.
Following the potential accelerated approval and we're through the <unk> trial.
FDA will require a randomized trial to demonstrate a survival benefit.
We expect this phase III post approval trial will compare single agent doxorubicin through the triple combination of doxorubicin with Enbrel and wide Cyril zero, one with PFS as the end point.
This trial would be expected to enroll patients with UBS in MFS as well as other sarcoma subtypes shown to be responsive to triple therapy based on data from the phase one two trial that I described earlier.
The ability for Tracon to commercialize to in license to immuno oncology therapies together in sarcoma will be a great strategic benefit.
It is important to understand the sales potential in sarcoma with NBA at parity pricing is not just the forecasted $200 million in annual <unk> revenues from the initial indications in refractory EPS in MFS.
Our clinical strategy is designed to create the opportunity for <unk> to broadly benefit patients with sarcoma in the frontline adjuvant and neo adjuvant settings by seeking supplemental indications.
Moreover, we believe <unk> total sarcoma, driven sales revenue should be further enhanced by marketing wise here was we won and put together as part of the same treatment combination in sarcoma.
While development in sarcoma straightforward due to the lack of any approved Immunotherapies. We also see a path forward for <unk> in other indications, where there is clear evidence of activity with dual checkpoint inhibition for.
For example, the combination of Opdivo and your voice approved for the first line treatment of intermediate and high risk patients with advanced renal cell carcinoma. However.
However, our discussions with key opinion leaders indicate that most patients receive frontline treatment with a PD, one antibody and a <unk> inhibitor rather than with your boy.
Therefore, we believe the unmet medical need in advanced renal cell carcinoma patients is in the PD one refractory setting.
Data presented at Astro indicate that PD, one refractory patients can be re sensitize immunotherapy and we expect to evaluate <unk> zero 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 boy in the frontline setting.
In addition to our two checkpoint inhibitors. We are pleased the National Cancer Institute continues to fund development or a DNA damage repair inhibitor Trc 102 and.
In February at the NCI initiated a randomized phase II trial, assessing Trc 102 in stage III non squamous non small cell lung cancer in combination with chemo radiation.
The tumor trial will enroll 78 patients to assess the benefit of adding Trc 102 to current standard of care treatment of Pemetrexed cisplatin and radiation therapy, followed by consolidated devalue Mab 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 this year and results are expected in 2024.
Our fourth clinical stage asset is the <unk> 73 antibody T. J fourth unite the trade kind of stick evaluating in a phase one study as a single agent and in combination with a checkpoint inhibitor to centric where.
We are working to complete data analysis of the trial, which has enrolled the last patient.
As a reminder, imap has indicated their desire to exercise their option to terminate the T. J <unk> license following completion of the phase one trial for a payment to <unk> of $9 million, which is.
<unk> later this year.
Next I will provide a legal update on the two disputes work are in arbitration with our corporate partner Imap.
As a reminder in February of this year arguments for alleged breaches of both of our license agreements with I Mab 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 what the press release described as a right of first negotiation for exclusive rights to commercialize T J, <unk> and multiple Asian African and middle Eastern countries for up to 340 million.
And potential payments to imap.
We believe that based on the <unk> license Tracon is entitled to receive a payment at that time under the T. J <unk> agreement.
Although IMF has disputed that this payment is due.
The other dispute with Imap regards our <unk> antibody agreement with them.
The disputes and this agreement include issues related to <unk> to license and collaboration agreements with ABL bio in July 2018 that preceded our agreement with I Mab in November 2018.
As of today the T J fourth year nine agreement and Bispecific antibody agreement disputes remain under post hearing consideration by the tribunal and we have been guided to expect their binding decision later this year.
Pending results of the arbitration, we continue to meet our obligations under the terms of both agreements we will promptly provide an update when the tribunal panel announced their findings.
Given the.
Challenging capital markets, the expectation to secure non dilutive capital from our corporate partner is important and may be further supplemented by opportunities for non dilutive capital enabled through our CFO independent product development platform.
That we believe makes us one of the most efficient clinical development organizations.
We expect to continue to leverage our platform in two ways that provide for potential non dilutive capital to tracon.
First we are evaluating drug candidates, whereby tracon performs clinical trials at a premium to our cost and Tracon then earns a share in the revenue.
Putting sub licensing fees and royalties from commercialization.
This is an aligned structure, we used in the past for example, with Johnson <unk> Johnson.
Second we are exploring a franchise model whereby we are paid to share our proprietary capabilities and knowhow to enable other companies to independently internalized clinical operations and use these new capabilities to avoid contracting with <unk> to execute clinical trials.
As has been the experience of Tracon, such an investment would we expect to result in substantial time and cost savings for our partner.
We believe that over time, our product development platform has earned strong credibility as a compelling solution for companies, who wish to become CFO independent and therefore reap the rewards of conducting trials faster at higher quality at lower cost than those trials typically contracted to crows.
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 million for the first quarter of 2022 compared to $2 3 million for the comparable period of 2021.
The increase was primarily related to additional enrollment in the pivotal <unk> trial.
General and administrative expenses were $6 5 million for the first quarter of 2022 compared to $2 7 million for the comparable period of 2021.
The increase was primarily related to legal expenses in connection with the arbitration with imap and we expect G&A expenses to decrease significantly for the remainder of the year as the arbitration hearing is now complete.
Our net loss was $9 5 million for the first quarter of 2022 compared to $5 1 million for the comparable period of 2021.
Turning to the balance sheet at March 31, 2022, our cash cash equivalents and investments totaled $16 6 million.
Paired to $24 1 million at December 31, 2021, we expect our current capital resources to be sufficient to fund our planned operations into 2023.
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 the five key events, we expect this year.
First we expect to report three interim assessments at the 600 milligram dose of <unk> and <unk> this year, including an interim efficacy assessment in the second half of this year.
Second we are on track to initiate a phase one two trial of our potential best in class utility for antibody whites here zero <unk> in combination with <unk> in the second half of this year to begin 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 provide tracon non dilutive capital in exchange for enabling companies tired of being beholden to crows to benefit from our capabilities and realized for themselves substantial time and cost savings we enjoyed tracon.
Fourth we expect to complete the T. J <unk> phase one trial this year, preventing I'm have the opportunity to exercise their stated desire to terminate the agreement for a payment to trade kind of $9 million.
Fifth we expect to report the arbitration panels binding decision, including potential damage awards regarding our significant legal disputes with imap.
As Scott indicated our current cash runway extends into 2023 in paas each of the five upcoming key milestones, including expected non dilutive capital from an existing partnership.
Thank you for your time and attention and we are now available to answer your questions.
As a reminder, if you have questions you will need to press star one on your telephone keypad again that is star one to ask a question, we'll pause for just a moment to compile the Q&A roster.
Our first question comes from the line of Maury Raycroft with Jefferies. Please ask your question.
Hi, Charles and team Thanks for taking my questions.
I was just going to start off with the <unk> study and what the interim analysis later this year for efficacy.
I think you've mentioned that's going to include about 36 patients just wanted to see if that's correct and then I'm wondering if the data is going to be pulled or if youre going to break it out by the mono versus combo.
Hi morning, Thanks for your call and we're looking forward to seeing you at your conference in June in New York in just a month away with respect to <unk>. We will do if you will and identical analysis tool. We did last year at the lower dose. So at the 600 milligram dose. We're using currently in the trial. After the 36 patients enrolled which would mean 18 patients in.
Each cohort, meaning 18 patients who receive single agent <unk> and 18 patients receive <unk> once those 18 patients in each cohort has gone three months and had two scans. Then we will assess the preliminary objective response rate and present that to the data monitoring committee.
There is a futility rule, whereby we need one response within each of those 18 patients in each cohort in order to continue enrolling that specific cohort so.
So depending on the review by the data monitoring Committee Google will then.
Reveal results to the street pending their guidance. If you will so I can't promise exactly what will be revealed in terms of aggregate or individual response rates other than that we will reveal that decisions by the DMC with respect to futility and any further announcements by the DMC with respect to.
<unk> or any potential change in the clinical trial, our expectation will be that the DMC would continue.
Continuing the trial as planned.
I would point out even at the lower dose. So we saw significant activity, including activity is satisfied the futility analysis. So we feel the if you do analysis will be also fulfilled at the 600 milligram dose.
As I mentioned I think earlier, we expect to see the the activity that we saw in lighter weight patients generalized to patients independent of weight, which I think would be an exciting prospect for patients.
Got it Thats helpful.
A clarification and then.
Also wanted to just check on enrollment we noticed recently that you that your target sites hit about 30.
<unk> Dot Gov.
And just wondering if you're planning on going beyond 30, or do you think 30 sufficient and.
If you can put any more finer points on enrollment expectations at this point in the timeline.
Sure Yeah, no I appreciate that so yes, there continues to be a lot of excitement for sites wanting to join the trial. So I think initially we planned about 25 sites, but.
It's hard to turn away an experienced sarcomas site that wants to be part of the study. So that's why we increased the number now up to 30 29 in the U S. And then one in the United Kingdom as well.
And I think that will be probably be the total for the entire study going forward.
Although again, if a site really comes to us and wants to be part of the study would be hard to turn them down but assumed will be 30 sites going forward.
In terms of accrual we expect to accrue the study between now and end of 2023.
We're being fairly.
Conservative than our accrual estimates, but and if we exceed that that would be fantastic I am encouraged by the fact that even during processing. The amendment is as I disclosed we enrolled more than 10 patients just in the first quarter alone. So there's again a lot of excitement around the trial and we do expect continued robust accrual.
Got it Okay. That's helpful. One last quick question for me for the $9 million termination fee.
And the completion of the phase one I guess is that going to be more of a third quarter.
Update our fourth quarter update when you complete the phase one and then when do you get the $9 million.
Yeah currently our expectation is as we disclosed in the Q is that we'll complete the study by the end of this quarter and so thereafter, we would expect the.
Our partner to exercise our stated intention to terminate the license and then pays the $9 million. So.
Hard to say exactly when that is more but I do expect that will be in the second half of this year.
Okay. Okay. Yeah. Thanks for taking my questions. Thank you Maury.
Our next question comes from the line of Ed White with H C. Wainwright.
Your line is open.
Good afternoon, Thanks for taking my questions.
Good morning.
Thank you Charles.
I have three questions. The first one is just on the timing of the.
In term.
Looks from the data safety monitoring board.
Yes.
The.
Is the safety are you going to have to safety reviews.
Prior to the efficacy data being released or how should we be thinking of that.
Yeah. Appreciate the question that yes, we expect really the timing of.
Or the progression of the interim reviews similar to what we saw last year, just now will be at the higher dose. So we will see the first review is after the 20th patient has been on study for three weeks.
And then.
Another stage review will be after the 20th patients been on study for 12 weeks. So those are two reviews that will happen in sequence you expect mid this year and then once the 36 patient has been on trial for three months and have two scans that will permit the interim efficacy assessment, which we expect towards the end of the second half of this year.
So that's the sequence of three that in a sense will parallel if you will the sequence of three that we had last year at the lower dose.
Okay. Thanks Charles.
Second question I have is on your.
Announcement on the.
Product development platform I'm, just curious if you've had any interest yet.
Yes.
Is there any timing that we could think of seeing a contract signed.
Sure, Yes, I mean, I guess I would say in general so when people look at Tracon, especially of the companies and they look at our expenses.
You know that we can run a pivotal trial again with sort for about $20 million I mean, they want to they want to be able to do that themselves.
So we've used our platform in many ways. So we've used it as a means of gaining commercial rights for instance, but full of Mab. We say we will take on the convert the clinical trial burden run the trials with our costs during that cost is very low secure U S. Commercial rights with the intent of commercializing the drug and then share profits with our partner but.
Not paying upfront or milestone so thats been our standard business will operation.
But as I noted in the past we have done the revenue share model, whereby Prince with Johnson <unk> Johnson, we will take on an asset, but we will ask the partner to pay for the trial and pay cost plus now we know even if you're a partner pays cost plus its going to be cheaper than if they pay a CRO.
And then we want to be aligned with our partner, we don't want to just act like a CFO and not be aligned to do the trial quickly. So we also want a piece of the revenue whether it would be a piece of the sub licensing fees or or the royalty. So that we are aligned to the trial quickly at low cost and high quality, knowing will still save our partner money versus.
And then work with the CFO and more importantly, we will save them time versus in working with the CFO . So thats the revenue share model and I will say there is significant interest in working with trade kind of along those lines I'd say, especially in these days, where a lot of companies are capital constrained and whereas two or three years ago. The amount of cared about throwing a bunch of money to zero now they are saying you know what we need to be very judicious.
If they want to be judicious working with Tracon makes perfect sense. So there is a lot of interest around the revenue share model that I mentioned, which would be beneficial to tracon because it would allow us to collect non dilutive capital.
The third model is something thats more reasonably come to the front because.
A lot of companies say, it's great that you would do the trial for us and we understand your need to be a revenue sharing partner, but.
What we'd really like is the keys to the kingdom, we'd like you to teach us to do what you do and so that's where we've come up with this idea of the franchise model. It's teach someone to do a trade condos tisha Matthew trials much faster at a third the cost with probably better quality than the CRO and teach us that.
Magic can be will teachers, the special sauce. So that's a more recent idea that we've been approached with respect to thinking about yes, I think with that idea, we'd really want to work with a very trustworthy partner, because we would be really teaching them, our special sauce, but.
That is something that is of interest to certain partners. So in terms of when to execute a deal.
Our stated corporate objective would be to do at least one deal. This year around a model that would allow non dilutive capital coming to Tracon.
Yes.
Okay. Thanks, Charles and then.
Last question is for Scott.
Yes.
R&D expense sequentially was down.
So slightly but it was down.
As you are expanding.
Your trials I'm, just wondering was there anything onetime in nature.
In the fourth quarter that perhaps wasn't seen in the first quarter or something in the first quarter that was pushed out to the second quarter and how we should be thinking of.
The quarters going forward.
Yes, yes, thanks for the question so going forward.
The quarter should be similar to Q1 about $3 million in R&D expense.
Q1 was down a little bit because of that amendment, we werent enrolling any patients in January but then we enrolled quite a few in February and March but that was really the.
Why it was down just a little bit from Q4, but going forward I would expect about three a quarter.
Okay, great. Thanks, Scott.
Yes, no problem.
Thank you Ed question.
Your next question comes from the line of Joel Beatty with Baird. Your line is open.
Yeah.
Great Hi, Charles and team and thanks for taking my question.
First one is on the two safety assessments that are coming up for MSR.
I believe learn from those are those kind of go no go decisions or is more detailed info provided and how will that how will the result on safety assessments to be communicated with the street.
Hi, Joe Thanks for your question, Yes. The safety assessments are really just to see if theres any significant safety signal that we're seeing within befall, a mab or <unk> combined with <unk> that we didn't expect.
I would point out that we had the similar safety assessments at the lower dose within the format, both as a single agent and combined with <unk>.
There was no issue raised whatsoever, and we released that general finding as our topline press release to the street and we would intend to do the same thing this year.
We I would also point out that the increased dose of them a full member using a 600 milligrams is still a dose that's well within the maximum tolerated dose parameters of the drug in the sense that in phase one testing. This drug was dose as high as the equivalent dose of 2400 milligrams every three weeks, so four times higher than the dose for use.
<unk> and <unk> so.
I would say that we feel it's very unlikely we will uncover a safety signal we haven't seen you remember and what's been dosed over 700 patients as a single agent and in combination with other drugs, but this is a formal way to assess safety had the DMC review it and make sure. There's nothing untoward, there, we havent seen or expected.
That could potentially impact the patients in the trial.
Got it that makes sense and then another question I'm thinking back to the 70 patients that were enrolled last year is there any potential to share data on those further understand the impact that increasing the dose here can add.
The 70 patients that enrolled at the lower dose joy.
I expect we'll release data independent of the final data for the trial, but it's important I want to understand how valuable those patients are with respect to informing on the clinical pharmacology of <unk> and I mentioned that because the FDA has put a great deal of emphasis lately on clinical pharmacology and this optimist project to make sure.
Youre going to file for approval at the right dose and those patients dosed at 300 combined with the now 160 patients we expect to be dosed at 600 is going to give us a broad if you will exposure.
A broad base of patients that have various exposures vendor full mab that I think will be incredibly useful to really if you will prove to the FDA that we're using the right dose, which is the 600 milligram dose that we expect to file for approval. So.
Those 70 patients.
The PK data from those patients in quarterly net PK with the responses we've seen in those patients will be incredibly valuable to support our expected application for approval of 600 milligrams.
Great and then one last question or the franchise model that you've been discussing can you help with COVID-19 quantifying the value to potential partners such as the magnitude of the cost savings and any other potential benefits.
So I really appreciate you asking that question and maybe I'll put put in perspective this way.
So, let's say you're running a 30 patient phase <unk> study now we do studies at about $100000 of patient so for us to do a simple 30 patient phase one study cost us $3 million.
If you were to go to a CRO in oncology the in this day and age and I have seen numbers of about $300000 per patient.
Other words, if you run a phase one study with the CFO , who will cost you probably around $9 million.
So you can understand that if you were to work with trade cons model, you would say potentially.
Around $6 million just for a phase one trial, if you're running a simple sum to simple phase one trials using our model potentially could save a company $12 million and just say two years running two simple phase one studies.
And if you do a phase II phase III goes up from there as I mentioned, we're doing <unk> for about $20 million to $25 million.
You as you well know pivotal trials typically cost up to five times as much. So you start to think about how much money a company would save if they used our model.
It's kind of the metrics of what we feel are franchised model would be worth to tracon for us to teach that to another company.
Great. Thank you.
Appreciate the question Joel Thank you.
Your next question comes from the line of Nick Abbott with Wells Fargo. Please ask your question.
Alright, thank you.
I mean, Jonathan team.
First one Charles.
How much do you think you've spent cumulatively.
The Imap litigation.
I think overall.
Scott maybe you can better answer that question.
Yet indicates.
Our normal G&A spend is about two a quarter.
That's kind of what let's say, it's historically been so then.
Last year we.
We spend about 17, five and so 17 five.
They are between that and eight.
The majority of that I would say would be the imap arbitration and then this this year as well as six and a half and normal would be about two.
So that's over $10 million.
Last year and this year and then there were some costs in 2020 as well, but that kind of gives you an idea.
Okay. Thanks, Paul.
And then.
Couple people will ask about that.
Sure.
Model Charles.
How do you how do you think what is the revenue generation from that look like you said, a onetime fee into that trial and we'll see how do you think about.
Revenue.
No a great question I appreciate you asking that so what we think is that there would be a significant upfront payment to tracon for us to teach the partner or if you'll give them the keys to the kingdom, but.
Its also a system that we continued to upgrade.
Annual basis, so our thought would be it would be an upfront fee and then it would be annual if you will maintenance fees to tracon say over a five year period of time.
Because I think it would take that period of time for someone to feel really comfortable that they don't need to continue to kind of referenced some have those smiths with them in terms of small parts of the system that you may not get the first time.
Remember it took US 10 years to fully internalized we've been doing this for 10 years I should say and I'd say it took us three years to really fully internalized and feel comfortable doing the system ourselves. So that's how we think about upfront payment and then annual maintenance payments say for five years as we continue to be a resource for the company that we teach to use the system.
Yes.
Thanks Charles.
And maybe just to follow up on that is that.
Do you think that once.
Once each.
Sign of franchisees there.
A plus option, where you help plan.
Headcount in order to policies for the teaching.
Yes, I think Thats, a great point I mean, we would really I mean, we are always proud of those on being a great partner so.
A franchisee would really teach them exactly what we're doing help them understand exactly what personnel they need in each specific role in the company to be able to mimic what we do knowing that if you have the right people you don't need a ton of people remember tracon. Our total number of employees right now is 20, and we're able to run.
Multinational trials with that team just because the systems are so good and the people are so good. So we would have to help them not only get the systems, but have the right people.
Sort of the right people in the right spots on the bus at that company to run the system as well, but it doesn't take a lot of people if they're well trained and very capable which is the case with trade count for example.
No.
Risk that you lose youll.
Yes, I think we'd make sure we signed the contract indication this non solicitation.
And then.
And last one for me.
No.
I like the plan, Hawaii, 001, and it would be great.
Could be.
Poland that could be it.
Buddy what do you think the probability is that you could thanks.
Oh man license beyond just sarcoma.
Yes.
It's a great question, it's definitely something we would love to do clearly, it's something we need to get concurrence from each of our partners both Alfa <unk> medicine. So.
Can't state that we're able to do that right now and but I can state that is something we clearly wish we can do in the near future.
Knowing that I think to your point, if we had our own dual checkpoint inhibitor franchise of <unk>, one that could be broadly powerful and benefit patients across multiple indications not just sarcoma.
Okay, great. Thanks al.
Thank you Nick.
Yes.
Your next question comes from the line of Bert Hazlett with <unk>. Please ask your question.
Thanks, just kind of a follow up to the.
Last one in terms of potential triple combination. Thank you for taking the question just with regard to why its user one.
Just so.
We can kind of frame it again the phase one phase two.
Combination with Doxy.
Really in frontline and multiple sarcoma subtypes.
That is to generate data in the combination to ultimately move into.
Phase III trial in the first line in that setting.
Hi, Greg and thanks for your question, you're exactly right. It's exactly what we're planning to do I mean, we've seen for instance in lung cancer that the dual checkpoint inhibitors can be combined with frontline chemotherapy quite effectively and.
With respect to sarcoma doxorubicin is the standard frontline therapy used in the majority of sarcoma patients. So our goal would be to do and do it in sarcoma. If you will what other companies have done, let's say in frontline lung cancer, which is combine two checkpoint hubers with chemotherapy in this case doxorubicin. So it would be that triple therapy you referenced.
So then.
Discussion about.
RCC realm.
Relative to kind of the answer you just gave to the prior question.
Yes.
<unk>.
And why it's easier one combination in PD, one refractory RCC patients, that's really maybe down the road and if things can be adjusted or I, just want to make sure I understand kind of the.
The optionality there.
No I appreciate it so yes with respect to renal cell carcinoma, we have rights to develop 1001, we do not have rights to develop <unk> in that indication so.
If we're unable to expand our license to secure rights to develop and but for example in renal cell carcinoma. Fortunately, we could still develop why is <unk> zero, one which is our plan, but in that case, we develop it with a PD one inhibitor <unk>.
Presumably one that's already approved in renal cell as the combination.
Okay, great. Thank you thank.
Thank you Barry.
Additional combinations is that.
Are there other indications behind that at this point are things are still under construction there.
I mean, the other indications where we have rights for wide user. One for instance includes microsatellite stable cancer, particularly colorectal cancer. That's another indication. We think is something we potentially could explore but I would say after sarcoma right now top of our list would be renal cell carcinoma.
Okay. Thank you.
Thank you Mark.
At this time of night to remind everyone. If you have questions. Please press star one.
Our next question comes from the line of Tom Sumit Roy with Jones Research.
Your line is open.
Hi, everyone. Congratulations on all the progress.
If I may ask this question.
Maybe I'm a little confused.
The trial.
In December when you are dosing at 300 milligram.
Some of those patients were eligible to transitioning to this higher 600 milligram.
Trial.
Is that what is happening or you have to involve patients.
Hi, Sherman yet to be clear so the way. The trial works is we are enrolling 80, new patients in each of the two cohorts who will start at 600 milligrams. So.
80 patients will start at 600 milligrams is single agent <unk> in 80 patients will start at the end of a 600 with your boy.
And those are the two cohorts that are the primary cohorts evaluated for the primary objective response.
The response rate, where we have to see nine of 80 responses either cohort to reach the primary endpoint.
So that's the if you will the data set that's evaluated for potential approval of those $2 80 patient cohorts, but the 70 patients already enrolled 300, there were patients ongoing at 300 milligrams and those patients individually can dose escalate to 600 to see if that will.
Also benefit the individual patient and that will also be very useful data as supportive data, but to be clear. The population you buy waited for the primary endpoint is this 80, new patients enrolled into each of what we call cohort C of single agent <unk> 600, and cohort D of <unk> six.
<unk> plus <unk>, that's the key population thats evaluate for the primary endpoint.
I see.
So in other words shove it.
So in other words just to be clear. So we expect the total number of patients enrolled in the trial that will be 230, 70 patients already enrolled at the lower dose of <unk>.
And then the 160 patients of which more than 10 are already enrolled as I speak.
That will be enrolled in the two cohorts at the higher dose. Please your question.
Yes.
That's really helpful can you give us any idea how many of the 70 patient.
CR dose escalating into 600 milligram.
Multiple patients I can't give you an exact number but mulch.
Multiple patients that run at 300, where they are.
We've disclosed there was really minimal safety issue of 300 have dose escalated to 600, both as single agent also with your boy.
Okay.
Any possibility you would present that data separately cohort ABR it would all be.
Packaged into one dataset deepwater.
Yes, yes.
Our thought is it probably will be packages and one dataset that 70 patient data will be highly supportive data because it will actually be so valuable to us given this real emphasis by the FDA on clinical pharmacology and the Optimus project.
That data is going to be hugely valuable and that will be part of the filing package. If you will so to be clear the endpoint will be determined at the higher dose the patients start at the higher dose of <unk>.
But that 70 patients worth of data will be supportive data and we integrated for instance to the population PK analysis and the exposure response assessment analysis Thats a key part of any BLA filing in this in this day and age.
Okay. Thank you and congratulations on the progress again.
Thank you gentlemen.
There are no further questions at this time I will now turn the call over back to Dr. Charles tumor.
For closing remarks.
I would just like to thank everyone for the careful listening to the script and to the dialogue the questions.
Appreciate your time and wish everyone a great day. Thank you.
Yes.
This concludes today's conference call. Thank you again for participating you may now disconnect.
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