Q2 2023 Zymeworks Inc Earnings Call
Thank you for standing by this.
This is the conference operator.
Welcome to the eye works.
Second quarter 2023 results conference call and webcast.
As a reminder, all participants are in a listen only mode and.
And the conference is being recorded after the presentation there'll be an opportunity to ask questions.
She joined the question queue to ask a question press star one on your telephone keypad.
I would now like to turn the conference over to Diantha Pohl.
Director Corporate communications, it's artworks Diane Please go ahead.
Good afternoon, and welcome everyone. My name is Diana proposed director of corporate Communications here, It's IMAX.
We will discuss our half year 2023 financial results as well as provide an update on our ongoing business.
Before we begin I would like to remind you that we will be making a number of forward looking statements. During this call, including without limitation. Those forward looking statements identified in our presentation slides and the accompanying oral commentary.
Forward looking statements are based upon our current expectations and various assumptions and are subject to the usual risks and uncertainties associated with companies in our industry and at our stage of development.
For a discussion of these risks and uncertainties. We refer you to our latest SEC filings is found on our website and as filed with the SEC.
In a moment, Chris Apple, our senior Vice President and Chief Financial Officer will be discussing our financial results, including certain non-GAAP measures.
Scripps one of our non-GAAP measures and a reconciliation to the most directly comparable financial measures determined in accordance with GAAP are described in detail in our press release, which is available on our website at www Dot <unk> dot com under the Investor Relations tab.
As a reminder, the audio and slides in this call will also be available on the time works website. Later today now I will turn the call over to Chris Our senior Vice President and CFO .
Thanks, Diana and thank you everyone for joining us today for our second quarter 2023 earnings call.
I'll be presenting prepared remarks and participating in the Q&A today.
Our chat and Chief Executive Officer, Ken Galbraith, and our Chief Scientific Officer, Paul Moore will also be available for Q&A at the end of the call.
With that I will begin today's call with an overview of our financial results followed by a review of a few recent developments and updates across our business.
This afternoon, sorry, much reported financial results for the second quarter and six months period ended June 32023.
<unk> net loss for the six month period ended June 30th 2023 for $75 5 million.
A $1 13 per diluted share compared to a net loss of $137 2 million.
Six month period ended June 30th 2022.
Okay.
The decrease in net loss of 45% was primarily due to revenue from our collaboration agreement with jazz.
Kris and research and development expenses and an increase in interest income.
Which were partially offset by an increase in general and administrative expenses.
Yeah.
Revenue for the six month period ended June 30th 2023 was $42 $6 million compared to $7 4 million for the same period in 2022.
Revenue during this period included $49 million.
Development support and drug supply revenue from jazz net of a credit issue to jazz for amendments to our partnership agreement.
One $7 million for research support and other payments from our other partners.
Revenue for the same period in 2022 included $7 4 million and research license fees reached type support another payments from our other partners.
Research and development expenses for the six months ended June 30th 2023 by $85 3 million compared to $118 $5 million for the six months ended June 30th 2022.
Excluding stock based compensation in 2022 restructuring expense research and development expense decreased on a non-GAAP basis by $27 9 million in the first half of 2023 compared to the same period of 2022.
This decrease was primarily due to lower manufacturing expenses agenda does not and a reduction in development costs. As a result of the times of our amended collaboration agreement with jazz, partially offset by an increase in preclinical expenses compared to the same period in 2022.
In addition, salaries and benefits expenses decreased compared to the same period in 2022 due to lower head count in 2023, and lower nonrecurring severance expenses.
For the six months ended June 30th 2023.
General and administrative expenses were $38 6 million.
Compared to $27 3 million for the same period in 2022.
General and administrative expenses increased by $11 $3 million for the six months ended June 32023, compared to the same period in 2022.
Our $7 8 million increase on a non-GAAP basis, excluding stock based compensation and nonrecurring restructuring expenses.
This increase was primarily due to an increase in professional services expenses, partially offset by a decrease in salaries and benefits costs as a result of lower head count in 2023, following our prior year restructuring activities.
Overall, our total employee head count has been reduced by almost 50% over the last 18 months.
From 455 full time employees as of December 31, 2021 to 237 full time employees as of June 30th 2023.
Our cash resources, consisting of cash cash equivalents and marketable securities of $431 4 million as of June 30th 2023.
That reduction of $60 8 million from December 31, 2022.
For the six months ended June 2023.
She used in operations was negatively impacted by working capital movements, primarily due to higher levels of receivables, which we expect to partially with us by the end of 2023.
During the second quarter, there are a number of financial impacts on our balance sheet due to our amended collaboration agreement with jazz and May 2023.
As of June 32023, we have approximately $46 million in receivables from jazz, reflecting reimbursement for Zander, that's enough development costs.
Which we expect to be reimbursed subsequent to the end of the second quarter.
In addition, we received $15 $4 million from jazz to purchase of prepaid expenses on the desktop App development contracts that will be transferred to jazz.
This has been deferred on our balance sheet as of June 32023, and will be offset against the related prepaid on the underlying agreements are legally transferred to jazz.
Moving forward the accounting for our jazz collaboration should be simplified given that the majority is on the debt market development expenses will be incurred directly by Jos.
Any continued tender that's about development expenses incurred by us and reimbursed by jazz will be reflected as a reduction in operating expenses rather than collaboration revenue.
We continue to expect further development support and drug supply payments from jazz, which we will continue to be reported as collaboration revenue.
Due to the transfer of a significant number of our employees dedicated to Janet <unk> development to jazz.
Recently decided to vacate our existing Seattle office location and have secured a fit for purpose office facility in Belgium to accommodate our remaining Seattle based workforce.
The majority of the financial impact related to this decision will be reflected in our Q3 financial results.
With the continued focus on the balance sheet and a significant transformative impacts of the non dilutive inflows from a licensing and collaboration agreements with Janssen in Beijing.
We continue to expect to have cash resources to fund planned operations through it.
At least the end of 2026 and potentially beyond.
As of August nine 2023, we had approximately 60 779 million shares of common stock outstanding.
During the second quarter, we issued 335 million shares of common stock pursuant to our at the market facility for net proceeds of $26 2 million.
For additional details on our quarterly and six months ended results for a description of our non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures.
Could you to review our earnings release, and other SEC filings available on our website at Www Dot <unk> Dot com.
Now I'd like to spend a few minutes talking about our recent business highlights.
The first half of 2023 as highlighted by several important developments that reflect progress in our product pipeline.
Together with gas, we presented full clinical results from our phase II B study agenda, that's about monotherapy in previously treated <unk> amplified biliary tract cancers at the American Society of clinical oncology annual meeting in June in Chicago.
We also announced our next expected investigational new drug application candidate <unk> to 'twenty.
<unk> targeted type of I summarize one inhibitor antibody drug conjugate scheduled for IND filing in the first half of 2025.
Yeah.
This announcement is the most recent step in a $5 five goal of having five new R&D for preclinical development candidates from our <unk> ADC and EMS product portfolio filed and approved to commence clinical studies by 2027.
Other preclinical development candidates Zew 171, and CW on nine months currently remain on track with expected IND filings in 2024.
We were also pleased to announce an industry veteran Carlos Campoy has joined our board of directors.
Carlos is a skillful thoughtful and performance driven financial executive with a successful track record in leading culturally diverse pharmaceutical and biotechnology organizations to be complex transformational changes in the U S and internationally.
We look forward to his input as a member of our board.
We're also pleased to report that both of our regional hubs in Dublin, and Singapore are operational and will be instrumental in clinical study execution for our early stage R&D portfolio over the next several years in Europe and the APAC regions.
Our early stage development organization in the United States continues to expand in both <unk> and our planned new hub in California, and lots of our planned U S clinical studies.
Now I'd like to spend a few minutes talking about our R&D portfolio.
Our presentation to ask represents an important milestone in the development of <unk> and in our partnership with jazz in Beijing.
Multiple abstracts were presented including data from the Horizon BTC, one phase III pivotal study of <unk> monotherapy in previously treated had to amplify BTC patients.
The results were published simultaneously in lancet oncology.
A presentation to ask how also included updated results from a phase <unk> study of <unk> in combination with Docetaxel as a first line therapy for patients with advanced her two positive breast cancer.
And the <unk> presentation for the phase <unk> pivotal study, we announced that data from patients with her two amplify BTC does.
<unk> is in situ hybridization positive amino histochemistry T plus three for US demonstrated a confirmed objective response rate of 41, 3%.
But the capital estimated median duration of response of 12 nine months.
The km estimated median PFS was five five months with a range of nine 3% to $18 five months.
As our lead investigator <unk> MD professor of gastrointestinal medical oncology and investigational cancer Therapeutics at the University of Texas, MD Anderson Cancer Center.
Noted in our press release announcing the results.
Our 41, 3% median duration of response of $12 nine months and median PFS of five five months represents a significant step forward for second line treatment of her to amplify BTC.
Current chemotherapy treatments have been reported to provide only a 5% to 15% or a median PFS of one four to four months.
Additional presentations on <unk> are planned for the second half of 2023.
Including two poster presentations recently accepted for presentation at the European Society of medical oncology or ESMO in Madrid. This October .
In partnership with jazz, we will be presenting quality of life outcomes from the phase <unk> Horizon BTC, one study evaluating patients with <unk> treated her two positive biliary tract cancer.
In partnership with Beijing updated results from the Phase one two study of <unk>, plus chemotherapy and pessimism as first line therapy for patients with advanced <unk> positive gastric gas.
Gastroesophageal junction and Edina carcinoma will be presented.
These results provide data with a longer follow up period from the original data presented on this clinical study at Ash 2022.
The future potential milestone and royalty payments from our <unk> licensing and collaboration agreement with jazz and our agreement with Beijing remain unchanged and are expected to continue to be a significant source of non diluted capital for XIAFLEX Zander, that's progressing towards the final stages of regulatory review.
That would include additional regulatory and commercial milestones as well as double digit royalties of up to 20% of sales.
We continue to support efforts in regulatory interactions by each of Johnson Beijing for initial regulatory filings for potential accelerated approval of <unk> in second line BTC.
As announced by jazz yesterday, they have alignment with the U S. FDA on a confirmatory study in first line metastatic BTC to support channels U S regulatory assets.
With an initial focus in BTC in gastric.
We believe that <unk> has the potential to improve the current standards of care and address a large unmet need and a range of <unk> <unk> positive cancers.
Horizon Gea I want the pivotal trial evaluating <unk> in first line Gea is ongoing and topline data are expected in 2024.
Much of our progress in the first half of 2023 has been a reflection of our goal to have five novel therapeutic candidates in clinical studies by 2027.
We are building a very exciting pipeline based on the strength of our technology platform and look forward to our expected IND filings for GW 171, and <unk> 109, one in 2024.
We also remain on track to initiate a phase II clinical study is done and thats been observed with <unk>.
Plus <unk>.
And had two positive non small cell lung cancer patients.
In addition, we continue to explore a pathway for further clinical development of <unk> and post <unk> breast cancer patients likely in collaboration with a strategic partner.
As discussed we have nominated Zew two <unk> is our third preclinical development candidate and a $5 five objectives and are moving forward with a planned IND filing in the first half of 2025.
We believe that <unk> represents an excellent target for a type of summarize one based antibody drug conjugate and a potential first in class opportunity.
<unk> is highly expressed in 64% of serious ovarian cancer and 68% of lung adenocarcinoma is as well as being a relevant biomarker of interest in other solid tumors.
CDW to 'twenty is another example of therapies that are built on XIAFLEX as drug conjugate platform technology.
<unk> 16, conjugation with a cleavable Facebook linker to enable potential optimization of the appropriate drug to antibody ratio or D var. There.
But our novel Topoisomerase, one inhibitor based payload technology.
The monoclonal antibody incorporated in <unk> 'twenty with developed in house and selected based on its favorable binding profile inefficient internalization of payload delivery.
The D var, and <unk> was selected to balance efficacy and tolerability by incorporating an average of four type probably summarize one inhibitor payloads per antibody.
We look forward to the continued development of our early stage R&D portfolio and to reporting on our continued progress.
Would you expect to have opportunities throughout the second half of 2023 to provide presentations at medical and scientific meetings on our progress with <unk> CW.
CW 171, CW 191, CW to 'twenty and other product candidates.
On the partnering front, we expect to continue to pursue partnerships, where advantageous to progress our preclinical development programs and to broaden our clinical development program for <unk>.
As we leverage our focused R&D engine, we intend to continue our work to generate candidates with the potential to be co developed with partners.
So these development programs, we will continue to seek attractive economics with upfront payments that help fund development of our in house candidates as well as attractive royalty and commercial milestones.
<unk> retained commercial rights to such product candidates in the United States.
In summary, we remain on track for important achievements of milestone opportunities during the remainder of 2023, and especially 2024, when we expect topline data from satisfying.
Satisfy gea phase III study of <unk> to be reported.
With that I'd like to thank everyone for listening to our prepared remarks, and I'll turn the call over to the operator to begin the question and answer session operator.
Thank you.
Would you like to ask the question as a reminder, please press star one on your telephone.
Engineered automated message advisers that Youre hearing just raised please go with your name to be announced before you proceed with your question one moment, while we prepare for the first question.
Our first question will be coming from John Miller of Evercore. Your line is open.
Alright, thanks, so much for taking the question guys and congrats on the progress with the finance about that especially.
Maybe two from me could you speak a little bit to that.
Bar in first line BTC as opposed to second line BTC. What are you looking for in a west there and how are you thinking about those two populations differently and then secondly on the new announcement.
Announcement PW two 'twenty can you speak a little bit more to the design there what's driving your excitement for the target and maybe why you chose a lower DIR versus 191.
Yeah. Thanks, John I'll take the first question. So obviously you saw our pivotal data in second line BDC that we announced late.
Late last year and at more detail at <unk> and again it was a.
Pretty impressive compelling response that we saw some of that to date a mab.
As monotherapy in patients who had to fail.
A therapeutic regimen that included Gemcitabine.
Could also included.
Our PD one regimen.
Which about a quarter of the patients did the results were and confirmed responses were pretty much the same between folks without a prior PD, one who are and those who didn't.
Obviously, the it's a pretty compelling.
Picture that we saw from the second line BDC patient population and that's why we're working.
Working very hard with jazz in Beijing, right now to complete the regulatory interactions, we need to and get those filings in.
Think about a first line BTC.
Treatment patient population.
We're obviously looking to understand.
Where how moving into an earlier line of therapy for patients and working in combination.
With other standard of care, which in this case in most parts of the world is a.
PD, one plus Jim says.
Could really improve upon what validated mab powerfully done the audits held as monotherapy so.
So I don't think we've talked yet about the nature of that clinical study and I'm sure. We all once it's filed in a confirmatory.
Tori studies up and running.
And I don't think we'll.
Talk much about.
What we're looking for other than that I did about monotherapy pretty powerful that second line patient population.
And we would expect that moving up into earlier lines of therapy in combination with other agents.
Could be a pretty interesting opportunity to change the standard of care for.
So that patient population, we know is that I need at Mt has got a great tolerability profile to demonstrate that efficacy.
As mono therapy that allows additional agents to be added to.
A therapeutic regimens there'll be tolerable for patients.
We know from the detailed subpopulation data that was.
That was published out of the Topaz study earlier this year that specifically patients with the <unk> mutation.
<unk> did not do very well auto survival curve and so we really think the right approach for that patient population is a hurt your targeted therapy in combination with other agents to standard of care.
And we're really excited to run that study and see what we can do to.
To improve the standard of care, what the flight out ahead of that for the CW to.
<unk> to 'twenty question, I'm going to let Paul talk.
Talk a little bit about.
About AUC and how it was constructed and why we're excited to move that program forward into the end of the $5 five.
Well thanks, Ken.
Thanks, Great question John .
Yes, maybe just pointing out some of the differences or some of the design features of the molecule. So.
Obviously, the target is not to be that is reasonably well validated target that is highly expressed in ovarian cancer and non small cell lung cancer.
Our preclinical package.
<unk> supports the ability to target that molecule with the ADC that we've developed.
Some other key features of our molecule.
The pillar that we've selected there is it's our topoisomerase inhibitor payload.
<unk> has developed and features.
<unk> features that we feel is important to support on EDC.
In.
Particularly for cancer types like ovarian and non small cell lung cancer, we think that <unk> inhibitor approach is appropriate for getting good hopefully people who've responses in the clinic.
Then we did a lot of preclinical work to sort of decide on the dollar you asked the question about the Dol.
We picked our floor on beer, what we found was that we really could dose very high safely in non human primates, we went up to 90 mix per kg.
Dose.
Dosing and didn't see any evidence of any.
Toxicity, more evidenced with Columbus Cytopenia, which.
So we've not dealt.
That was favorable and then what we also observed with but not to our was very active.
Nice activity.
<unk> tumor models pdx models of ovarian cancer, so that taken together really supported our decision on that molecule.
Makes sense. Thank you.
Thank you for your question one moment, while we prepare for the next questions.
And our next question will be coming from Eagle No mingle with you of Citigroup. Your line is open.
Alright. Thanks.
Just spend a little bit more talking about about two 'twenty, obviously, there's been some news in the space with nothing to be recent high profile failures. So could you just talk about a bit more about your commitment to the target and more specifically how are you.
Molecule may differ in terms of.
The degree of site specific conjugation the payload obviously, it's your own antibody.
If you could just comment on that given the competitive dynamics for that target.
Yeah, I'll, let Paul expand upon that if you can Paul.
Yes.
I'm sorry, Paul your line's metered I believe.
Sorry about that.
Yes, so just getting.
Back to the questions are going to be.
What I mentioned previously so in our drop compared to the Marsano drug Savannah. The payload is one key difference so in our drug.
Use the <unk> inhibitor that we get developed and channel and so that's different than what it.
It used to horizontal payload in previously.
Got it.
Sure Jeanette and ticket also targeted.
Not to be in the us.
Mitotic inhibitor. So we feel like using a payload here is the key difference from our molecule and what's been previously attempted and we think that that two <unk> is favorable for the tumor types that we're going into and also we see a very favorable.
Balance of safety and efficacy in a preclinical setting we think that's very important.
We also then did take time to think about the Dol.
And here, we're going with a little bit of a lower dollar than most on that hit us So we feel with that.
Also.
Differentiates.
From us.
Goodbye.
We also mentioned was developed internally by remarks, and really selected to support.
Internalization and people with deliberate and so we feel comfortable with the antibody.
And I think what I also mentioned was in the preclinical setting.
What we observe when we met.
Hi tool since we've been through mainly mix per gig repeat dosing with the Darfur EDC, we saw no evidence of <unk>.
Romo, cytopenia, which could be sovereign.
A signal that you could potentially leading.
Prepare tox.
Toxicity.
Did not see that so we think overall with the safety profile.
The molecule with the cuckoo fewer did that really puts us in a good position to tackle patient.
Patients.
But we're expecting <unk> to be in.
Great.
Okay. Thank you very much and then just one specific question as you look towards your partnership with Beijing.
Then it gets commercialized.
China, how will that work from the manufacturing perspective.
Right.
And their biologics facility or will that be done on your side.
No <unk> is manufactured by Wuxi.
And has been supplying ourselves in Beijing with clinical material and in a commercial setting our wuxi will supply both Beijing and jazz.
Or the initial launch quantities.
And obviously, if you've read our collaboration with jazz Youll see they have the ability to to set up their own manufacturing at some point and we'll do a tech transfer to them.
And obviously Beijing would have the same ability to do that so right now we will control that process all the way along for the benefit of our partners and so are we setting up commercial arrangements that allow wuxi to supply a Beijing and jazz.
Directly so I think we're.
Very comfortable what are.
On a supply basis and for the initial filings that are being made by Beijing and jazz. The CMC module was prepared by us because we've got all the work that's already been prepared so it's not a rate limiting factor too.
So an initial filing by Beijing, or an initial filing by jazz, which your hopper.
Not that not that far away.
Yeah.
Okay. Thanks, Ken.
Yes.
Thank you for your question one moment, while we prepare for the next questions.
Yes.
And our next question will be coming from Charles Xu of Guggenheim. Your line is open.
Hey, guys. Thanks for taking the question and congratulations on all the progress.
Fully appreciate that this is in partnership with Beijing, but regarding any data <unk> in gastric cancer can you help us set expectations for the upcoming phase <unk> data at ESMO as well as how you think the recent update from the keynote 811 study maybe frame the competitive landscape for horizon gea. Thanks.
Yes, Great question, Charles and I, just don't know if I could answer it so for the second part, we obviously had a topline data release on keynote at 11.
That data I understand there's going to be at ESMO are those of whats being discussed with regulators now.
From the topline data release it appears that.
That that regimen was always supposed to be significant or clinically meaningful.
Depending upon what we read in the PD lone positive patient population.
And her two so obviously we.
Well, we'll wait to see that data at ESMO and see what it means for us I think.
They arent exactly comparable studies are not head to head, but also not comparable to patient populations are different don't forget we have <unk>.
Joe cancer patients in our study in addition to gastric <unk> gastric esophageal.
Esophageal junction.
So it'll be hard to make a direct comparison between those two.
But obviously, we will take a look at what that data looks like.
Obviously it all the work we've got Engie, a was that a data mab, we find it works effectively so far in our early clinical studies, regardless of PDL, one status, which I think would be an advantage for.
It could be used we obviously added a an arm of our phase III horizon Gea L. One study two.
To include Tesla in a randomized fashion, so that we could clearly understand.
What adding.
A P O one twos any in chemo might mean and for which group of patients.
And I think the randomized data will tell us that I'm glad we added that arm.
I think as you remember from last year, we had an early.
Data release on the small phase II study that that Beijing had initiated looking at adding plus chemo plus Tesla. It was very immature data that's always hard to interpret anything out of it.
This is again a year later.
So I think even though it's a small study and you need to be careful with that I think youll start to be able to tease out.
What.
Adding a PD one to valley plus chemo.
It could mean for a patient population, whose PDL one.
Positive and we'll just have to wait for that abstract will be presented a poster presented.
Also at ESMO in October in Madrid, and we wouldn't want to say anything before that data has a chance to be.
Presented and so we'll just have to wait that October in Madrid. So.
Got it great sounds great. Thanks, again for taking the questions Youre.
Youre welcome. Thank you.
Thank you.
Remind if you would like to ask a question. Please press star one on your telephone.
The next question.
The next question is coming from Derrick our chiller.
Wells Fargo. Your line is open.
Thank you Hey, guys. Congratulations on the quarter. This is Adam monitored Derek just a couple questions from US today, maybe if we can get an update on the plans for things those phase II combo trials in non small cell lung cancer and breast cancer.
Anti PD one been chosen yet.
Do you does it make sense to move forward.
With the same checkpoint inhibitor for both indications there would you expect to proceed.
CPI <unk> study.
Thank you.
No. Good question, Thanks, Adam as.
As we said in the in the script. We're we're moving forward to initiate a study of <unk> plus a PD one.
In the non small cell lung cancer space and I don't think we'll talk more about which PD one or the design of the study and told us up and running but.
We're doing everything necessary now to get that initiated this year and to start recruiting patients.
On that study.
For the breast cancer study, which we're still interested in looking at we're still working out.
The right combination agent and the right pathway and our ability to get access to the right patient population.
So until we do that we won't broadened out that study. It's also obviously a more complicated that a longer term study than the non small cell lung cancer study. So we're going to continue to be active in conversations about potential partners, who might be able to come on in and support that in a way that we can't because we need to balance capital allocation between not just any though but the other five new medicines.
That are coming into the clinic.
In the next period of time, so we'll update that as we as we go forward, but I think once the study is up and quit trials and once we've.
<unk> initiated the first patient and we'll have more to say about that stuff.
Study, we do still plan to and have an abstract accepted to discuss phase one data from Daddy's, though because now we've closed that trail off.
And so we did have an abstract accepted at a medical meeting.
Before the end of this year and once once those titles are made public will talk a little bit more about which conference in what that data set will look like.
Sure Greg.
And then maybe on <unk>.
Ginny.
GW 191 gig.
Given the potential to target tumors, you mentioned, Japan.
If our alpha receptor expression levels can you maybe walk us through your current thinking on the trial design in particular, how it may compare to other fr Alpha program like merger.
Thank you.
Okay.
Yes, thanks, very much again I don't I think we've worked out what we think is an appropriate initial clinical play out of dose escalation dose expansion cohorts.
Where we'd like to study that that ADC and you'll recall that this ADC with designs.
To try and take advantage of the multiple tumor types, whether it's the target of interest.
And take advantage of the fact that there are different expression levels. In this patient population that you might want to target not just high expresses and so we'd like to as early as we can in phase one understand our ability to to work across multiple tumor types to be effective to.
To work across high expresses and all of those tumor types and to work towards how we see we might impact medium and low expresses across those tumor types. So I think once the study is up on <unk>.
When trials, we'll be happy to talk more about the design of.
Of how the study is going I mean, obviously there is a.
Current product commercially available.
In a certain patient population here so how we.
Go about testing that patient population is a little more complicated and so we have some thoughts on how to do that that'll be a part of that.
The clinical study.
Unfortunately, what's happened to the Masada molecule so late in clinical development.
But having said he was going to be.
Not be for a long time is a biological target. We did have the same complication that there might be a competitive product. There ahead of us, which does make the clinical development of regulatory pathway.
More complicated.
Unfortunately unfortunately.
Clinical study outcome.
For that agent and that company, but certainly makes the opportunity attractive from being a cleaner and more simple clinical development and regulatory pathway and the ability for us to if we go quickly with the right molecule.
We are in a position where we could be first in class.
And that indication so it's actually a.
A more exciting thing for us to pursue and one of the reasons, where we're trying to accelerate this to move as quickly as we can.
With our TOEFL payload and the antibody redesign the Darwin selected.
And our understanding of the target in our preclinical package today, which looks excellent.
Great. Thank you.
Youre welcome.
Thank you for your question one moment, while we get ready for the next question.
And our next question.
We will be coming from Brian Chin of.
Jamie.
Hey, guys. Thanks for taking my questions today.
As you get closer to next year.
Can you provide a little bit more granularity on.
Preparation work on site selection for a 191 and one thing one.
What else is left to do in the next couple of months.
As we think about the cadence of.
<unk> initiation.
Program is expected to reach the clinic first then.
Is there any rationale.
Whether which one should go first or not thanks.
Yes, Thanks, Brian I think we've I think we've given all the guidance we can on timing.
Right now it's about these will be up and running in 2020 for recruiting.
Patients and there'll be 220th Nappy will be up and running in the first half of 2020 fives.
I don't what to get more specific than that until we feel comfortable that we can.
Can be so that'll probably be later this little later this year to give more updated guidance on timing.
What we have done I think is hopefully put us put ourselves in a position to run a very efficient triangulation from preclinical into.
Clinical studies, so we have a great preferred provider relationship.
With Wuxi to make all of these molecules, which means I think as we go forward with CWT 'twenty, you'll probably see that go faster.
From traveling from selection into clinical studies. So that's one thing we're counting on them working in one supplier on the CD side.
I think on the Euro side, we have the same idea to work with our preferred.
One group is a preferred provider and take advantage of multiple clinical studies.
Coming on track at the same time.
We are definitely positioned ourselves with some.
Clinical and regulatory expertise in both Singapore for Asia Pacific and in Dublin for Europe to be able to start these studies.
With a global thought process in mind from from the very beginning we obviously have a strong U S group as well, but I think you will hopefully see us take advantage of global access to patient populations of interest give.
Given the multiple tumor types that exist that we'd like to study and 171191 and I think by setting that up early.
You can go much more officially in phase one to find all those patient populations in multiple dose expansion cohorts and you can go much faster from going from phase one into a phase II process.
By already having a global footprint established with Kols in all the major reasons.
So we've been planning very carefully around.
Speed and quality and efficiency of development for all five of these molecules that we intend to bring into the clinic and.
1719 water hopefully.
Just the first two to be able to prove that we did the right planning and execute those that are in.
And our quality and efficient.
And I'm, sorry, not to be able to give more specific guidance about which ones filed first time, which was recruiting first.
And when that is in 2024, but we will give that guidance as soon as we feel comfortable that we can be.
As accurate as possible what that that's probably later this year.
Okay.
Maybe just building on what you said earlier on to 'twenty.
You provide some comment on.
<unk> to 'twenty.
B differentiate then and then.
The companies that are out there are you allocating capital B.
So.
Is there any specific learnings that you received from your.
Your competitor failing.
Earlier last Manav is there any.
In size that you gained that could allow you to make some tweaks.
Heading into the study in 2025, thank you.
Yes, I think I think we've been studying the biology of this target for a long time period to get to this stage. We've obviously followed.
Any programs, which have been in the clinic in this area. Besides the rosado with Genentech compounds.
And I think.
We had a very set mindset of what we thought would make a great ADC against this target.
And I think you tried to learn along the way, but I think some of the elements that are designed into this.
Were specific to how we thought this target should be approached.
In the first place I don't think we changed anything specifically <unk>.
In response to that we saw we did benchmark obviously against the two compounds wherever we could understand the differentiation that we're able to tease out pre clinically, but I'll I'll ask.
Paul if he wants to expand upon that that statement at all.
I think you're right Ken I think you all know.
Zane features and our molecule we feel addresses some of the previous limitations, but.
We certainly will bear in mind, an antique stock of <unk>.
Others have learned in October and maybe in the design of the study.
But really in the design of the molecule with you we feel very comfortable where we've landed with the molecule and it addresses prior limitations.
Fleet can.
Provide.
Good patient outcome.
Great.
Yes, we have spent some time trying to understand the co expression.
And patient population of between folate receptor in Napa to understand that because it's not very well understood and the extent that there is whether it's higher lower LOE and high or what it is right.
I think it's something that's a work in progress.
Progress for us.
I think one of the most complicated things we had in our business case to push this forward was.
Basically the same development and regulatory pathway, where someone's already ahead of your list of commercially available product and you kept test that population the same way you would.
All of the others.
And unfortunately.
For this other agent that's that's gone away, but it definitely makes the business case for moving forward.
Clinical develop the regulatory pathway.
For us to explore the full breadth of ovarian cancer and non small cell lung cancer without a commercial product being available.
And a quick fashion so it.
It actually looks like a more promising program for Austin, We think how we selected the antibody linker strategy.
Load.
And I understand that target, we think we're on the right track.
Great that was it.
Very helpful. Thank you.
Thank you one moment, we have a follow up question.
And we will follow up question coming from the line of V go no coverage at all.
Your line is open.
Alright, thanks for taking the follow up just two quick follow ups on.
It should be any any early work on a biomarker enrichment strategy.
For this target and then second you mentioned ovarian and non small cell lung.
I think in the past.
Your competitor Marsano had had indicated that non small cell lung the expression of <unk> may be a bit a bit too variable.
Just curious what your thoughts are on that.
Those tumor types you would you.
You would want to prioritize in the neuro in an early phase one.
<unk>.
Yeah, I think our we will talk too much about our phase one strategy until the studies upon on controls, which will be in a little bit.
We're obviously very incident.
This is the target of interest in both ovarian and non small cell lung cancer.
We'd like the opportunity with the right with the right ADC, which we think we have to understand.
What the impact might be an actual patient population.
These are obviously both.
<unk> targets of interest because the expression levels in ovarian and non small cell lung cancer are.
About 60% in both.
So it gives you a different pathway to think about how you would approach this.
Asian population and whether you were enrich for enrollment or not but I think as you see our clinical study, you'll get a better understanding of what our what our approaches.
But we think we like the breadth of potential indications here, it's obviously not as broad as 171, and 191, which is probably okay and putting up with GPC three of the ADC. It's you know it's a straight <unk>.
HTC target of interest. So there is some diversity and variability in the target that we're trying to approach them.
Even now with nappy, we're approaching our target where we could be the first in class and we moved quickly with the right approach.
As opposed to folate receptor, where there's somebody there ahead of us and others are pursuing it with a with a turbo payload so different characteristics of each of these programs that we have.
So we like the fact that they're a little bit.
Different but I think as you can see our clinical plan.
Formulate and Clint trials Youll see.
What our approach will be but we would like to study or a particular agency and both of these patient populations of ovarian and non small cell lung cancer to understand what might be possible.
Thanks.
Okay.
One moment please.
One moment for the next question and our next question.
We will be coming from the line.
Stephen Wiley.
Idaho.
Your line is open.
Hi, guys. This is totally on for Stephen Willey I have two quick questions. So the first one is if I understood correctly. It sounds like you guys are still planning to present data from TWD 49.
By end of this year would it be possible.
Give us the gist.
Big picture color on what these data presentation or detail and second.
So GW 49 in <unk>.
Breast cancer hurt to the breast cancer or put in Hector.
You said you mentioned that.
Rice with likely.
Conduct this trial with a strategic partner and what.
Actually decline.
You can find it out.
Ideal strategic partner and what would you be looking for and not just to make your decision. Thanks.
Yes. Thank you for the question. So we do have an abstract accepted at a medical meeting before the end of 2023.
To present, some additional anecdotal data from a phase one study again, we won't talk about what that is until the abstract title.
Is made public.
You'll just have to wait for that to occur on the on the timetable, but we're happy that we we have an abstract accepted an opportunity to present some additional data from <unk>.
<unk> and our interesting Allegiant study phase one I think.
As we've talked about was that he is now going forward development. We see this as a as a combination ADC that can be used in combination with a multitude of agents.
To generate efficacy and targeted in a patient population, which is the post to the XD.
Ah patient population our space, it's what everyone is trying to find.
Face to fill four for physicians in.
And patients and what happens when people progress or fail or intolerant of USD and so obviously, it's it's why we're instead in non small cell lung cancer. There. The combination was was easier to determine.
In breast cancer, we definitely would like to do some additional single agent activity in it.
Her too low as well and to be XD failures.
But we thought it was very important to figure out then what is our combination strategy. What is the agent we would combine with and what patient population would that be tired of that and how would we get access to that patient population and some parts of those answers would be held.
To have a partner execute that program, but until we answer to that.
Question about what agent might be looked at in combination and what the specific setting will be.
It's hard to conclude those discussions with partners like we are still working on defining the pathway.
And hopefully we can do that and broaden out this program, but we do want to go forward the non small cell lung cancer in combination with PD one.
And that's we're doing now that will get initiated this year and data will come out of that.
While the timelines and we'll give guidance about that once we once we get the study up on when trials and once we get our first patient in and until that we really can't say more about that.
Thank you.
Thank you.
Thank you for your questions. Today. This concludes today's Q&A session.
I now like to turn the call back over to Ken for closing remarks. Please go ahead.
Yes. Thank you very much for for attending our call and asking questions I know, it's late in the earnings season.
But we really appreciate your interest hopefully you are your takeaways from this call is that we're we remain right on track with where we thought we would be with an exciting 2024.
We confirm the guidance of our reporting topline data from Horizon Gea O. One study with was that a data <unk> plus chemo and also plus Tesla.
And we look forward to reporting that data next year I think it really really is important for firms that are data mab, we're really excited with jazz is optimism about.
The potential reach first out of data not just the BDC, but gea breast cancer and.
And beyond that they expressed on their on their call yesterday, which is great. We're right on track with the two new <unk>.
The first ones.
For us it would be 171, and 191 next year and starting those clinical studies, which is great.
We're right on track with nominating our third compound, which we want to really aggressively pursue with timing.
We're working very diligently on the fourth and fifth selection of our portfolio and we're hoping that we could round that out more quickly than maybe we.
Anticipated.
Beyond that we're still remaining financially disciplined in keeping our cash runway through at least 2026 and beyond that we can pursue.
There's five by five strategy in a way that allows us to move it.
None of them recovered fashions and still have discussions around new partnerships to <unk>.
Help us with those five molecules potentially or to work with us on things.
Beyond those five molecules, but we feel really comfortable with our position right now and we have a lot of opportunities in the remainder of 2020 previous share.
Data and results up and down the portfolio from Saturday to map at ESMO two is that even though at another conference with other products in our portfolio and we look forward to the opportunity to sharing that additional progress and data results.
At conferences through the remainder of 2023 and thank you for paying attention and I look forward to the next update.
This concludes today's conference call. Thank you all for participating you may now disconnect and everyone have a great evening.
Okay.
[music].
Okay.
Okay.
Yes.