Q4 2023 Vir Biotechnology Inc Earnings Call

Okay.

Operator: Hello, welcome to Vir Biotechnology's fourth quarter and full year 2023 financial results and business updates. As a reminder, this conference call is being held at this time; at the speaker's presentation, there will be a question and answer session. I will now turn the call over to Sasha Damouni-Ellis, Executive Vice President, Chief Corporate Affairs Officer. You may begin, Mr. Mounielis.

Speaker Change: Hello, welcome to Veer Biotechnologies fourth quarter, and full year 2023 financial results and business update call.

Speaker Change: As a reminder, this conference call is being recorded.

At this time all participants are in a listen only mode.

Speaker Change: After the speaker's presentation, there will be a question and answer session.

Speaker Change: I will now turn the call over to Sasha <unk> Ellis Executive Vice President Chief Corporate Affairs Officer, you May get you may begin Mr. Many Ellis.

Sasha Damouni-Ellis: Thank you and good afternoon. With me today are Dr. Mary Anne DeBacker, Chief Executive Officer; Dr. Phil Pang, Chief Medical Officer; and Sung Lee, Chief Financial Officer. Before we begin, I would like to remind everyone that some of the statements we are making today are forward-looking statements under the securities laws. These forward-looking statements involve substantial risks and uncertainties that could cause our clinical development programs, future results, performance, or achievements to differ significantly from those expressed or implied by such forward-looking statements. These risks and uncertainties and risks associated with our business are described in the company's reports filed with the Securities and Exchange Commission, including Forms 10-K, 10-Q, and 8-K. I will now turn the call over to our CEO, Marianne DeBacker. Thank you, Sacha.

Sasha Ellis: Thank you and good afternoon.

Sasha Ellis: With me today are Dr. Marianne tobacco, Chief Executive Officer, Dr. Phil Peng, Chief Medical Officer, and sung Lee Chief Financial Officer.

Sasha Ellis: Before we begin I would like to remind everyone that some of the statements. We're making today are forward looking statements under the securities laws. These forward looking statements involve substantial risks and uncertainties that could cause our clinical development programs future results performance or achievements.

Sasha Ellis: Differ significantly from those expressed or implied by such forward looking statements.

Sasha Ellis: These risks and uncertainties and risks associated with our business are described in the Companys reports filed with the Securities and Exchange Commission, including forms 10-K, 10-Q and 8-K.

Speaker Change: I will now turn the call over to our CEO Marianne de backer.

Speaker Change: Thank you Sasha.

Marianne DeBacker: Good afternoon to everyone on the webcast, and thank you all for joining us today. Before we discuss the tremendous progress we made in 2023 and what's ahead in 2024, I want to touch on the announcement we made earlier this week that Phil Pang, our Chief Medical Officer, has decided to step down at the end of March to spend more time with his family. We have initiated a search for a successful... I want to sincerely thank Phil for his leadership.

Speaker Change: Good afternoon to everyone on the West Coast and thank you all for joining us today.

Speaker Change: Before we discuss the tremendous progress we made in 2023 and wants to have as much of that before I want to touch on the announcement, we made earlier this week that Silke Peng.

Speaker Change: Chief Medical Officer has decided to step down at the end of March to spend more time with his family.

Speaker Change: We have initiated a search for a successor.

Speaker Change: Want to sincerely thank Phil for his leadership and he's a strong clinical development team is positioning.

Marianne DeBacker: It is a strong clinical development team in place, for positioning as well as for continued success, and I wish him the very best. Stepping in as Interim Chief Medical Officer is Dr. Carrie Wong, current Senior Vice President, Clinical Research. As I reflect on 2023, I'm proud of the clinical progress we have made towards developing a potential treatment for patients with chronic hepatitis delta, a potential functional cure for the millions living with chronic hepatitis B, as well as a differentiated approach to preventing HIV. Our priority is to deliver on our mid-stage clinical pipeline while also refocusing our research and early pipeline to programs beyond infectious disease. We anticipate significant data readouts this year, which build off last year's progress across all our clinical programs. Specifically, already in the first quarter, we anticipate completing the enrollment of approximately 60 participants across two cohorts in software, are faced to hepatitis delta trials. We attribute this rapid rate of enrollment to authors, climate scientists, and science educators.

Speaker Change: Positioning us well for continued success and I wish him the very best.

Speaker Change: Stepping in as interim Chief Medical officer, and stopped to carry one car T theory, senior Vice President clinical research.

That's what I reflect on 2023 I'm proud of the clinical progress we have made towards developing a potential treatment for patients with chronic hepatitis Delta.

Speaker Change: Potential functional cure for the millions living with chronic hepatitis b.

Speaker Change: As long as the differentiated approach to preventing HIV.

Speaker Change: Our priority is to deliver on our mid stage clinical pipeline, while also refocusing our research and early pipeline programs beyond infectious disease.

We anticipate significant data readouts this year, which builds off last year's progress across all of our clinical program.

Speaker Change: Specifically already in the first quarter, we anticipate completing enrollment of approximately six key participants across two cohorts and solstice, our phase III hepatitis Delta trial.

Speaker Change: We attribute this rapid rate of enrollment for the fall.

Speaker Change: It's a different clinician and patient interest following the initial data we reported at <unk> last year.

Unnamed Speaker: Thank you. I'd like to pass it over to, who is our disease envelope coordinator. In the second quarter, we finally shared early virologic and safety data on a subset of these participants. It is important to appreciate that there is a significant underserved patient population in need of a safe, highly efficacious, and convenient therapy for treating hepatitis delta. We estimate that there are at least 12 million people diagnosed with this disease and an estimated 60 million or more undiagnosed worldwide.

Speaker Change: In the second quarter in terms of share or do you pharmacologic and safety data on a subset of these participants.

It is important to appreciate that there is a significant underserved patient population in need of a safe highly efficacious as convenient therapy for treating hepatitis Delta.

We estimate that there are at least 12 million people diagnosed with this disease and an estimated 60 million or more on diagnosed globally.

Marianne DeBacker: We aim to develop a best-in-class treatment which we believe will drive increased diagnosis rates and physician fear to become the leader in hepatitis delta. To position us for success, we are collaborating with patient advocacy groups and policymakers to improve surveillance and screening. In addition, crucial work is ongoing to understand who and where DELTA patients are. These efforts will support a targeted, rapid, and successful commercial launch in the future.

Speaker Change: We aim to develop a best in class treatment, which we believe will drive increased diagnosis rate.

And physicians here, if he got D theater in hepatitis Delta.

Speaker Change: To position us for success, we are collaborating with patient advocacy groups and policymakers to improve surveying and screening.

Speaker Change: In addition, crucial work is ongoing to understand cool and where delta patients are.

Speaker Change: These efforts will support a targeted rapid and successful commercial launch in the future.

Marianne DeBacker: Switching gears, I will now discuss our Functional Cure Program for Chronic Hepatitis B, another area of high unmet medical need. Based on the data reported in our ongoing Phase II trials thus far, we believe our two therapeutic candidates, Dr. Debbie Barth and Dr. Dinesh Dharam, have the potential to play a critical role in delivering high functional cure rates for chronic hepatitis B patients. We look forward to reporting end-of-treatment data from the MARSH-CARB trials at a major medical congress in the fourth quarter. Finally, in the second half of the year, we are looking forward to sharing initial immunologic proof-of-concept data for VIR 1388, an HIV T-cell vaccine candidate currently being evaluated in a Phase I trial. If the data supports the validity of the platform, it could be a springboard for other indicators, including our preclinical therapeutic vaccine for the control of precancerous lesions and HPV cancer. Switching to research. We continue to advance antibody therapeutics optimized for increased likelihood of development success thanks to our proprietary platform, powered by AI and machine learning. Our focus is on prophylactic antibodies for influenza A and B, RFC, FPV, and COVID-19.

Speaker Change: Switching gears I will now discuss our functional cure pro program for chronic hepatitis b.

Speaker Change: Another area of high unmet medical need.

Speaker Change: Based on the data reported in our ongoing phase II trials, thus far we believe our two therapeutic candidates, so Debbie Bart and see that strong how does the potential to play a critical role in delivering high functional cure rates for chronic hepatitis b patients.

Speaker Change: We look forward to reporting end of treatment data from the March part B trial at a major medical Congress in the fourth quarter.

Speaker Change: Finally in the second half of the year. We are looking forward to sharing initial immunologic proof of concept data for here 13, 88, and H S. E T cell vaccine candidate called keeping what you're telling me it's in a phase one trial.

Speaker Change: If the data supports the validity of the platform it could be a springboard for other indications, including our preclinical therapeutic vaccine for control Freak cancerous Legion and HPV cancers.

Speaker Change: Switching to research.

Speaker Change: It continued to advanced antibody therapeutics optimized for increased slightly with development success. Thanks to our proprietary platform powered by AI and machine learning.

Speaker Change: Our focus is on prophylactic antibody or in trends that E N V.

Speaker Change: RSV F P V.

Speaker Change: With 19.

Marianne DeBacker: In addition, we are developing a cocktail of broadly neutralizing antibodies for an HIV cure. We look forward to sharing more about these programs and the timing of potential IND submissions during the year. On February 21st, VIR and GSK terminated our collaboration to research, develop, and commercialize our monoclonal antibodies targeting the influenza virus under our definitive collaboration that we established in May of 2021. FEAR retains sole rights to continue advancing our investigational therapies for influenza.

Speaker Change: In addition, we are developing a cocktail broadly neutralizing antibodies.

Speaker Change: HIV cure.

Speaker Change: We look forward to sharing more about these programs and the timing of potential <unk> submission during the year.

Speaker Change: On February 21st Vir, and GSK terminated our collaboration to research develop and commercialize our monoclonal antibody targeting the influenza virus under.

Speaker Change: There are definite this collaboration agreement that we established in May of 2021.

Speaker Change: If you have everything sold rights to be continue advancing our investigational therapies for influenza.

Marianne DeBacker: With that in mind, we are actively pursuing External Partnership Opportunities for our next generation of forensic A and B antibodies and ADCs. Meanwhile, our respiratory collaboration with GSK. Turning to our cash and investments, our financial strength allows us to fund our clinical programs through major inspection points while enabling the flexibility to invest in external innovation. Thank you for all the great things.

Speaker Change: With that in mind, we are actively pursuing external partnership opportunities for our next generation influenza eight and the anti bodies and ATC.

Speaker Change: Meanwhile, our respiratory collaboration with GSK continues.

Speaker Change: Turning to our cash and investments our financials trying to allows us to fund our clinical programs two major inflection points, while enabling the flexibility to invest in external innovation opportunities.

Speaker Change: And evaluating external innovation, we are thoughtful selective and strategic with a focus on opportunities capable of augmenting our pipeline and platforms.

Philip Nadeau: We are thoughtful, selective, and strategic with a focus on opportunities capable of augmenting our pipeline and platform. To recap, we are preparing for a transformational year, participating in critical value inspection points in our program focused on chronic hepatitis delta, hepatitis B, and HIV. With that, I'll now turn the call over to you. I want to begin by thanking you, the board, and all of my dear colleagues for what it's been an honor and privilege to serve as VIER's Chief Medical Officer. VR has been family to me as well as an all-consuming passion for the last seven plus years.

Speaker Change: To recap we are preparing for a transformational year at fear anticipating critical value inflection points in our program focused on chronic hepatitis Delta hepatitis B and HIV.

Speaker Change: With that I'll now turn the call over to Phil.

Philip Nadeau: Thank you.

Philip Nadeau: Thank you Jim before thinking you the board and all my colleagues for what has been an honor and privilege to serve as fears Chief Medical officer.

Philip Nadeau: It's been a family to me as long as the all consuming passion for the last seven plus years.

Philip Nadeau: I have full confidence in Vera's future and the ability of our promising clinical programs to impact the lives of millions. Moving on to that pipeline, I'll begin by summarizing the initial results from our Phase 2 Solstice trial, which is on Hepatitis Delta, that were shared in a late-breaker presentation at ASLB last year and discussed earlier this year. The SOLSTICE trial is evaluating Pildesimab alone and in combination with Elepsiron as a potential chronic treatment for patients living with chronic hepatitis delta. Topazovar is our investigational neutralizing monoclonal antibody which has been engineered for enhanced immune engagement.

Philip Nadeau: I have full confidence in <unk> future and the ability of our promising clinical programs to impact the locks.

Philip Nadeau: Yeah.

Philip Nadeau: Moving onto that pipeline I'll begin by summarizing the initial results from our phase II <unk> trial, which is on hepatitis Delta that was shared in a late breaker presentation at <unk> last year and discussed earlier this year.

Philip Nadeau: The Socialist trial is evaluating <unk> alone and in combination with the left shrunk as perpetual chronic treatment for patients living with chronic hepatitis Delta.

Philip Nadeau: <unk> is our investigational neutralizing monoclonal antibody, which has been engineered for a human immune.

Philip Nadeau: Right.

Philip Nadeau: Alepsiron is an investigational HPV-targeted siRNA that reduces hepatitis B surface, which is approaching that of the Delta virus, for its life cycle. In our initial data, we observed extraordinarily rapid declines in HDV RNA. Five out of six participants had undetectable HDV RNA, and six out of six were below the lower limit of quantification within 12 weeks of starting combination therapy. Of note, 2 out of 6 also achieved ALT normalization.

Philip Nadeau: <unk> is an investigational HBV targeted a priority that reduces hepatitis b surface antigen, which the protein that the delta virus needs for its lifecycle.

Philip Nadeau: You know our initial data we observed extraordinarily rapid declines in HBV RNA.

Philip Nadeau: Four out of six participants had undetectable HBV RNA and sticks out of six were below the lower limit of quantification within 12 weeks of starting combination therapy.

Oh note two out of six also achieved LP normalization.

Philip Nadeau: While participant numbers are small, these data were recognized by several hepatologists as one of the most exciting advancements shared at the ASLB conference. That excitement has meaningfully translated into our ability to rapidly enroll patients, both with and without cirrhosis, ahead of schedule in our solstice study. As a reminder, our stated goal is to enroll approximately 60 participants in Solstice by the end of the first quarter. These participants are being enrolled into two groups. The first group is receiving tobevivir monotherapy every two weeks, and a second group is receiving tobevivir plus olepserone combination therapy every four weeks. As of early February, greater than 90% of participants have been dosed.

Speaker Change: While participant numbers are small these data were recognized by several herpetologist is one of the most exciting and perhaps not sure okay.

Speaker Change: So it'll be conference in 2023.

Speaker Change: Dennis Friedman has meaningfully translates into our ability to rapidly enrolled patients.

Speaker Change: Without cirrhosis.

Speaker Change: Schedule and our solstice study.

Speaker Change: As a reminder, our stated goal is to enroll approximately 60 participants and solstice.

Speaker Change: The first quarter.

Speaker Change: These participants are being enrolled into two groups the.

Speaker Change: The first group is receiving <unk> monotherapy every two weeks and our second group is receiving top everbach plethora of showing combination therapy every four weeks.

Speaker Change: As of early February greater than 90% of participants had been dosed.

Philip Nadeau: Notably, of the 55 participants who have already been dosed, 24 of them, or 44%, have compensated cirrhosis. We plan to share initial data on a subset of these participants in the second quarter, Specifically, 15 participants per regimen at 12 weeks and 10 participants per regimen at 24 weeks.

Speaker Change: Notably <unk> 55, participants who have already been dosed 24 of them were 44% of compensated cirrhosis.

Speaker Change: We plan to share initial data on a subset of these participants in the second quarter.

Speaker Change: Specifically 15 purchase opens per regimen at 12 weeks and 10 participants per regimen at 24 weeks.

Philip Nadeau: Should these data be supported, we intend to discuss with regulators on a potential path to registration in the third quarter. Switching to our phase two program for chronic hepatitis B, our preliminary data suggest that Elepsiron was given with pelliculated interferon alpha for up to 48 weeks. Approximately 26% of participants achieved hepatitis B surface antigen loss at the end of treatment, and 16% maintained hepatitis B surface antigen loss 24 weeks after the end of therapy.

Speaker Change: Should these data be supported we intend to discuss with regulators on a potential path to registration in the third quarter.

Speaker Change: Switching to our phase II program for chronic hepatitis B, our preliminary data suggests that when <unk> was given with particularly the interferon alpha for up to 48 weeks approximately 26% of participants achieve hepatitis b surface antigen loss at the end.

Speaker Change: End of treatment.

Speaker Change: And 16% maintained hepatitis b surface antigen loss 24 weeks after the end of therapy.

Philip Nadeau: Again, although the number of participants treated is small, this was the first sign that our siRNA may have a potential impact on functional cure rates beyond what is possible with PEG interferon alone. In a subsequent trial, when adding Tobevivar to a regimen of Elepsiron alone or Elepsiron plus Peg interferon, we observed an almost three-fold increase in end-of-treatment response rates after only 24 weeks. These data are the first indication of the potentially important role of an HPV-directed antibody in hepatitis B functional cure.

Speaker Change: Again, although the number of participants treated with small this was the first time that our SA RNA they have a potential impact on functional cure rates beyond what is possible with peg interferon alone.

Speaker Change: In a subsequent trial when adding <unk> to our regimen of <unk> alone <unk> plus peg interferon, we observed an almost three fold increase and end of treatment response rates after only 24 weeks of treatment.

Speaker Change: These data with the first indication of a potentially important role of an HPV directed antibody in hepatitis B functional cure.

Philip Nadeau: These data are encouraging, and we look forward to sharing end-of-treatment data from the MARCH Part B trial, which is evaluating 48 weeks of the doublet and triplet regimen, and Mark Porter. This will be followed by post-treatment data in the first half of 2025, which will allow us to assess functional curing. Turning to what we anticipate will enter the clinic, VIR-7229 is a next-generation COVID antibody with increased potency, breadth, and resistance to viral escape thanks to AI engineering and optimization.

Speaker Change: These data are encouraging and we look forward to sharing and of treatment data from our March part B trial, which is evaluating 48 weeks of the doublet and triplet regimens in the fourth quarter.

Speaker Change: This will be followed by post treatment data in the first half of 2025, which will allow us to assess functional cures.

Speaker Change: Turning to what we anticipate will enter the clinic next veers from 229 is a next generation COVID-19 antibody with increased potency breadth and resistance to viral escape, thanks to AI engineering and optimization.

Philip Nadeau: We expect to file a health authority application and support a phase one trial later this year. The development of VIIRS 7229 through the end of phase one is supported by BARDA. We look forward to continuing to share our progress over the coming quarters and during an R&D day planned for the end of. I will now turn the call over to Dr.

Speaker Change: We expect to file a hope of putting application to support a phase one trial later this year the development of your 72 nine through the end of Phase one is supported by BARDA.

Speaker Change: We look forward to continuing to share our progress over the coming quarters and during an R&D day planned for the end of this year.

Speaker Change: I'll now turn the call over to song.

Sung H. Lee: Thank you, Phil. We're pleased to share our financial results for the fourth quarter of 2023 and the full year. Total revenues in the fourth quarter of 2023 were $16.8 million compared to $49.4 million for the same period in 2022. Total revenues for the full year of 2023 were $86.2 million, compared to $1.62 billion in 2022. The primary driver for the year-over-year decline is lower collaboration revenues from the Shrov

Song: Thank you Phil we're pleased to share our financial results for the fourth quarter of 2023 and the full year.

Song: Total revenues in the fourth quarter of 2023 were $16 8 million.

Song: Compared to $49 $4 million for the same period in 2022.

Song: Total revenues for the full year of 2023 were $86 2 million compared to $162 billion in 2022.

Song: The primary driver for the year over year decline as lower collaboration revenues from such drove them out.

Sung H. Lee: We do not anticipate any meaningful collaboration revenue from Citron in the future, and this line item could make a negative contribution to our top line due to the ongoing required investment to support the marketing authorization of Citroen Lab, which our partner GSK leads the efforts in. Turning to operating expenses, the cost of revenue for the full year of 2023 was $2.8 million compared to $146.3 million in 2022. The year-over-year decline was driven by lower third-party royalties.

We do not anticipate any meaningful collaboration revenue from such roadmap in the future.

Song: In this line item could make a negative contribution to our top line due to the ongoing required investments to support marketing authorization. So it drove.

Song: Drove a map, which our partner GSK will lead the effort.

Song: Turning to operating expenses.

Song: Cost of revenue for the full year of 2023 was $2 $8 million compared to $146 3 million in 2022.

Song: The year over year decline was driven by lower third party royalties owed on <unk> sales.

Sung H. Lee: Odon, Citroen, MAP, and SAIL. R&D expenses in the fourth quarter of 2023 were $111.9 million compared to $155.2 million in the same period in 2022. The decrease was primarily driven by the winding down of the Phase 2 flu study of Vir 2482 in the fourth quarter of 2023. Also included in the R&D expense for the fourth quarter of 2023 is a severance charge of $2.6 million related to the workforce reduction announced in December 2023. R&D expenses for the full year of 2023 were $589.7 million, compared to $400,000.

Song: R&D expenses in the fourth quarter of 2023 were $111 $9 million.

Song: <unk> to $155 2 million in the same period in 2022.

Song: The decrease was primarily driven by the wind down of the phase III <unk> study of <unk> 24, 82 in the fourth quarter of 2023.

Song: Included in the R&D expense for the fourth quarter of 2023 is a severance charge of $2 $6 million related to the workforce reduction announced in December 2023.

Song: R&D expenses for the full year of 2023 were $589 $7 million compared to 400 full stop.

Sung H. Lee: R&D expenses for the full year of 2023 were $589.7 million, compared to $474.6 million in 2022. The year-over-year increase was primarily driven by the Phase 2 GLUE trial evaluating VR-2482 and related manufacturing costs, and to a lesser extent, the advancement of our Hepatitis Delta and Hepatitis B programs. SG&A expenses in the fourth quarter of 2023 were $43.1 million compared to $38.7 million for the same period in 2022. The increase was primarily driven by higher personnel costs and a severance charge of $1.9 million related to the workforce reduction announced in December of 2023. SG&A expenses for the full year of 2023 were $178 million, compared to $161.8 million in 2022. The year-over-year increase was primarily driven by higher personnel costs.

Song: R&D expenses for the full year of 2023 were $589 7 million compared.

Compared to $474 6 million in 2022.

Song: The year over year increase was primarily driven by the phase III <unk> trial, evaluating <unk> 24, 82 and related manufacturing costs and to a lesser extent the advancement of our hepatitis Delta and hepatitis B programs.

Song: SG&A expenses in the fourth quarter of 2023 were $43 1 million compared to $38 7 million for the same period in 2022.

Song: The increase was primarily driven by higher personnel costs, and a severance charge of $1 $9 million relate.

Song: Related to the workforce reduction announced in December 2023.

Song: SG&A expenses for the full year of 2023 were $178 million compared to $161 8 million in 2022.

Song: The year over year increase was primarily driven by higher personnel costs.

Sung H. Lee: For the fourth quarter of 2023, we reported a consolidated net loss of $116 million compared to a net loss of $101.6 million for the same period in 2022. For the full year of 2023, we reported a consolidated net loss of $615.1 million compared to a net income of $515.8 million in 2022. Moving to the balance sheet, cash, cash equivalents, and investments declined by $108 million quarter over quarter.

Song: For the fourth quarter of 2023, we reported a consolidated net loss of $116 million compared to a net loss of $101 6 million for the same period in 2022.

Song: For the full year of 2023, we reported a consolidated net loss of $615 $1 million.

Song: Compared to a net income of $515 8 million in 2022.

Song: Moving to the balance sheet cash.

Song: Cash cash equivalents and investments declined by $108 million quarter over quarter, and we finished the fourth quarter of 2023 with $1 $63 billion.

Sung H. Lee: And we finished the fourth quarter of 2023 with $1.63 billion. Now, turning to the financial guidance for 2024. We anticipate that the GAAP combined R&D and SG&A expense will be in the range of $650 million to $680 million. Included in this range are non-cash stock-based compensation expense in the range of $105 million to $115 million and restructuring charges for the closing of two R&D sites previously announced in December 2023 in the range of $25 million to $35 million. The restructuring expenses are primarily non-capital.

Speaker Change: Turning to the financial guidance for 2024.

Speaker Change: We anticipate that the GAAP combined R&D and SG&A expense will be in the range of $650 million to $680 million.

Speaker Change: Included in this range are noncash stock based compensation expense in the range of $105 million to $115 million and restructuring charges for the closing of two R&D sites previously announced in December 2023 in the range of $25 million.

Speaker Change: To $35 million.

The restructuring expenses are primarily non cash.

Sung H. Lee: When excluding the non-cash stock-based compensation and restructuring expenses from the GAAP combined R&D and SG&A expense rate, the resulting range is $500 million to $550 million, which represents an 18% year-over-year decline at the midpoint. The expected year-over-year decline is driven primarily by first, the absence of expenses from the Phase 2 flu trial evaluating your 2482 and related manufacturing costs in 2024, partially offset by the ramp-up of our hepatitis delta and hepatitis B programs in 2024, and second, the cost optimization measures taken in 2023. Approximately 3-4% of the GAP combined R&D and SG&A expense will be funded by grants. It's important to remember that these grants are recognized as revenue in our income statement. The combined GAAP R&D and SG&A expense guidance does not include the effective GAAP adjustment, cognizant of the events that may occur subsequent to the publication of this guidance, including but not limited to business development activities.

Speaker Change: When excluding the noncash stock based compensation and restructuring expenses from the GAAP combined R&D and SG&A expense range.

Speaker Change: The resulting range is 500 million to $550 million, which represents an 18% year over year decline at the midpoint.

Speaker Change: The expected year over year decline is driven primarily by first.

Speaker Change: The absence of expenses from the phase II trial, evaluating <unk> 2482 and related manufacturing costs in 2024, partially offset by the ramp up of our hepatitis Delta and hepatitis B programs in 2024 and second the cost optimization measures taken in 2023.

Speaker Change: Yeah.

Speaker Change: Approximately 3% to 4% of the GAAP combined R&D and SG&A expense will be funded by grants.

Speaker Change: It's important to remember that these brands are recognized as revenue in our income statement.

Speaker Change: The combined GAAP R&D and SG&A expense guidance does not include the effective GAAP adjustments caused by events that may occur subsequent to the publication of this guidance, including but not limited to business development activities.

Sung H. Lee: Litigation, in-process R&D impairment, and Changes in the Fair Value of Contingent Consideration. Our financial strength allows us to advance the Phase 2 Hepatitis Delta and Hepatitis B programs through multiple milestones, invest in our core antibody platform, and provide flexibility to evaluate external innovation. We will continue to have a disciplined approach to capital allocation and expense management.

Speaker Change: Litigation in.

Speaker Change: In process R&D impairment and changes in the fair value of contingent considerations.

Speaker Change: Our financial strength allows us to advance the phase III hepatitis Delta and hepatitis B program through multiple milestones.

Speaker Change: Invest in our core antibody platform and to provide flexibility to evaluate external innovation.

Speaker Change: We will continue to have a disciplined approach to capital allocation and expense management I will now turn the call back to Sasha.

Sasha Damouni-Ellis: I will now turn the call back to Sasha. Thank you, Sung. We will now start the Q&A section. Please limit questions to two per person so that we are able to get to all of our covering analysts. Operator, please open up the line for questions. If you would like to ask a question, simply press the star followed by the number one on your telephone keypad.

Sasha Ellis: Thank you we will now start the Q&A session. Please.

Please limit questions to two per person. So that we are able to get to all of our covering analysts.

Sasha Ellis: Operator, please open up the line for questions.

Sasha Ellis: Yes.

Sasha Ellis: If you would like to ask a question simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star one again.

Operator: If you would like to withdraw your question, press star one again. Your first question comes from the line of Paul Choi with Goldman Sachs. Your line is open. Hi everyone, can you hear me?

Sasha Ellis: Your first question comes from the line of Paul Choi with Goldman Sachs. Your line is open.

Paul Choi: Everyone can hear me.

Operator: Hello, yeah. Hi, this is Khalil calling in on behalf of Paul. Thank you so much for taking our question. I guess we'd like to ask about the Tobivar-Bart-Ellipzeran combination cohort without PEG interferon alpha in March Part B at 24 weeks. Is that slightly higher efficacy observed in the cohort without interferon something you'd expect to see repeated in the 48-week data? And what would that mean for interferon to place in a future pivotal study? Thank you for that question, Paul.

Paul Choi: Hello, Yes, hi.

Paul Choi: Hi, This is <unk>, calling in for Paul. Thank you. So much for taking my question I guess, we'd like to ask about the two bigger barred ellipse around combination cohort without peg interferon Alpha in March part B at 24 weeks is that slightly higher efficacy observed in the cohort without.

Paul Choi: Interferon something you expect to see repeated in the 48 week data and what would that mean for interferons place and future pivotal study.

Speaker Change: Thank you for that question, Paul and I will ask our CMO <unk> gives you deeper insights into that.

Philip Nadeau: I will ask our CMO Phil Tang to give you deeper insights into that. Thank you. Yeah, so I think that the numbers from the 24-week end of treatment data that we showed with the doublet and the triplet are still small numbers. So I would not look much into the fact that the doublet was slightly different from the triplet at 24 weeks.

CMO: Thank you, yes, so I think I remember the numbers from the 24 week end of treatment data that.

Speaker Change: That we showed with the doublet and triplet are still small numbers. So I would not look much into the fact that the doublet was slightly different from the triplet at 24 weeks I think that really what we're looking forward to seeing is what happens as you know after 48 weeks of the doublet and triplet. So I would say the jury is still out as.

Philip Nadeau: I think that really what we're looking forward to seeing is what happens, as you know, after 48 weeks of the doublet and triplet. So I would say the jury's still out as to what those results are going to be, which we will share with you in the fourth quarter. And I think that that leaves open whether or not interferon will be required. And if it is, I think it will require a slightly higher functional cure rate, given the known side effects of interferon.

Speaker Change: To what those results are going to be which we will share with you in the fourth quarter and I think that that leaves open whether or not in our firm will be required and if it is I think it will require a slightly higher functional cure rate given the known side effects of interferon, but I think again for patients and for providers. It always comes down to risk.

Philip Nadeau: But I think, again, for patients and for providers, it always comes down to risk-benefit. And I think that if we can show a transformational increase in functional cure rates, such as 30% or more, this is something that will be a very important tool for clinicians.

And I think that if we can show a transformational increase in functional cure rates, such as 30% or more this is something that will be very important.

Tool for clinicians.

Speaker Change: Got it. Thank you so much and I guess, a quick follow up kind of relating to the pipeline in general.

Philip Nadeau: Thank you so much. And I guess a quick follow up kind of relating to the pipeline in general. Could you guys give like a potential timeline as to when the company will select any frontrunner antibody candidates to enter the clinic, any color on your skin, and what would drive that decision to choose one? And so, just to provide a little clarity, we have a number of candidates entering the clinic in the near term. And that's sort of regardless of platform, whether it's an antibody or a T cell vaccine.

Speaker Change: Could you guys give like a potential timeline as to when the company was select any front runner antibody candidates to enter the clinic and any color on any color on what would drive that decision of choosing one.

Speaker Change: Yes, so just to provide a little clarity we have a number of candidates entering the clinic in the near term and that's sort of regardless of platform, whether it's an antibody or a T cell vaccine and really what we're always looking for is obviously something that is differentiated and something that we believe can make an impact on patients' lives.

Philip Nadeau: And really, what we're always looking for is obviously something that is differentiated and something that we believe can make an impact on patients' lives. So those three candidates are VIR-7229, the next generation COVID antibody I spoke about earlier, with its increased breadth and potency, thanks to our AI engineering platform. That also includes VIR-2981, our neuraminidase-targeting monoclonal antibody, which is differentiated on three levels. First, it targets both flu A and B, it's more potent than 2482, and it has a de-risk mechanism of action by targeting the neuraminidase enzyme.

Speaker Change: So those three candidates our beer seven to nine the next generation Covid antibody I spoke about earlier with its increased breadth of potency.

Speaker Change: Thanks to our AI engineering platform that also includes Vir 2000, 1981, our neuraminidase targeting monoclonal antibody, which is differentiated on three levels. One it targets both flu a and b, it's more potent than 2482 and has a derisked mechanism of action by targeting the neuraminidase enzyme and third.

Philip Nadeau: And third, we're very excited about VIR-1949, which is a potential therapeutic T cell vaccine that builds on our human cytomegalovirus vaccine vector platform and targets precancerous HPV lesions. But I do want to say and stress that, of course, the first two candidates, 7229 and 2981, we are planning to execute with a partner given the scale of development necessary. Right, right. All right. Thank you so much.

Speaker Change: We're very excited about <unk> 1949, which is a potential therapeutic T cell vaccine that builds on our human cytomegalovirus vaccine vector platform and targets precancerous HPV lesions.

Speaker Change: But I do want to stay in stress, but of course. The first two candidates 72, 9% to 2009 to 81, we are planning to execute with a partner given the scale of development necessary.

Speaker Change: Right right alright, thank you so much.

Operator: Thank you, Paul. Your next question comes from the line of Gena Wang with Barclays. Your line is open. Hello, this is Yi-An Jinah.

Speaker Change: Thank you Paul.

Speaker Change: Your next question comes from the line of Gena Wang with Barclays. Your line is open.

Hello. This is kyna. Thank you so much for taking our questions. So first of all for sale.

Operator: Thank you so much for taking our questions. First of all, for Phil, best wishes for your next journey, and for Marianne, with Phil's departure, and now you have focused on infectious disease, oncology, and immunology, what do you think would be the ideal candidate for your next CMO? And for your HDV, could you share your data expectations that you're going to share in the second quarter? And also, did you hear any initial regulatory feedback on the approval path? And lastly, for your earlier stage pipeline, how will you select the lead antibody candidates, and what will drive those decisions? Thank you.

Gena Wang: Best wishes for your next journey and for Maryann <unk> departure, and now you'll have focus on infectious disease oncology immunology, what do you think it would be the ideal candidates for your next.

Speaker Change: <unk> Oh and for HBV.

Speaker Change: Could you share your expectation that you're going to share.

Speaker Change: In the second quarter and also the deal here. Some initial written terrific back on the past and lastly for your earlier stage pipeline, how do you select the lead antibody candidates and what drives those decisions. Thank you.

Marianne DeBacker: Okay, thank you very much, Gena. I will start with your first question related to a successor for Phil and what we are looking for in the next GMO. First of all, what is going to be really critical is for someone to have a proven track record of advancing therapies really through Phase III and having experience bringing therapeutics all the way to market. Needless to say, we have already initiated a search for a successor, and I must also say, you know, since the news went out this week, we have received a flood of inquiries. But obviously, we will be very selective in what the profile of that candidate needs to be.

Speaker Change: Okay. Thank you so much gena I will start with your first question related to a successor to fill them.

Speaker Change: But we are looking for and then next TMO.

Speaker Change: First of all what is going to be really critical is.

Speaker Change: For someone to have a proven track record in advancing therapies, Sweden to phase III.

Speaker Change: And having experienced bringing.

Speaker Change: Therapeutics, all the way to market.

Speaker Change: Needless to say, we have already initiated a search for a successor.

Speaker Change: So I must say also says the news have gone out. This week, we have received a lot of inquiries, but obviously <unk> been very selective.

Speaker Change: In.

Speaker Change: What's the profile of that candidate wants to be.

Marianne DeBacker: We are also looking for someone who has a really in-depth understanding of, you know, the challenging regulatory landscape, and deep insights into how to use data and big data for insights into clinical development. So there's a number of things here that need to come together. And as Phil pointed out, we have a very talented leadership team here in our clinical group.

Speaker Change: They're also looking for someone who has a really in depth understanding of the evolving regulatory landscape deep insights in how to use data and big data for insights into clinical development. So there's a number of things here that needs to come together and as Phil pointed out we have a very talented.

Speaker Change: Leadership team here and our clinical group. So we are also looking for someone who can who need such a team of very talented developers for success, especially focused on our hepatitis b and hepatitis Delta programs.

Marianne DeBacker: So we are also looking for someone who can lead such a, you know, team of very talented developers to success, especially focused on our hepatitis B and hepatitis delta programs. Now switching to your second question, Gena, I understood that was related to hepatitis delta and what data we are expecting in the second quarter, so I will ask Phil to give you more color on that. Yeah, thank you, Marianne.

Speaker Change: Now switching to your second question Gena understood that was related to hepatitis Delta on what data we are expecting in the second quarter.

Speaker Change: I'll ask Phil to give you more color on that.

Philip Nadeau: Thank you Mary Anne So so with regards to the data in Q2 around hepatitis Delta.

Philip Nadeau: So with regard to the data in Q2 around hepatitis delta, you know, to step back first, as we shared both at the conference earlier this year, as well as at AFL-B, what we showed was data on six patients, and that data, we think, is quite transformative. But it is only six patients. So what we're looking for in Q2 is really to answer three questions. The first is, what happens when we dose more patients with our combination therapy? Will we be able to repeat that type of data?

Philip Nadeau: Step back first.

Philip Nadeau: We share both at the conference earlier this year as well as the AFL D. What we showed was data on six patients and that data we think is quite transformative.

Philip Nadeau: But it is only six patients. So we're looking for in Q2 is really to answer three questions. The first is what happens when we dose more patients with our combination therapy will we be able to repeat that type of data number two what will happen when we dose patients who have compensated cirrhosis and three what will happen with the long term.

Philip Nadeau: Number two, what will happen when we dose patients who have compensated cirrhosis? And three, what will happen with the long-term durability of those initial six patients? So I think we're excited and looking forward to that data. I think you also asked a question about regulatory feedback, and I just wanted to reiterate what we had said earlier this year, which is that the next step will be to take that data, if positive, and put it in front of regulators in the third quarter. In an attempt to discuss a path to registration,

Philip Nadeau: The ability of those initial six patients. So I think we're excited and looking forward to that data I think you also asked a question about regulatory feedback and I just wanted to reiterate what we have said earlier this year, which is that the next step will be to take that data if positive.

Philip Nadeau: And put it in front of regulators in the third quarter and an attempt to discuss a path to registration. So that's sort of the path is as we see it coming from here on.

Philip Nadeau: So that's sort of the path as we see it coming from here on out. Yes, Anuradha, related to your third question, which was related to our early stage pipeline, I think that Phil, in answering questions Paul already laid out, we really have three candidates that can enter the clinic or in the next 12 to 24 months. It's year 7229, year 2981, year 1949.

Philip Nadeau: Your honor.

Philip Nadeau: Yes.

Philip Nadeau: Related to your third question, which was related to our early stage pipeline I think that fill in in.

Philip Nadeau: And also a question of Paul already laid out we really have three candidates that can enter the clinic or in the next 12 to 24 months at <unk>, 7% to 920 981000 1949.

Marianne DeBacker: And so each of those is really progressing very well, and we will be providing more data and information on timing during the course of this year. Your next question comes from the line of Ruana Ruiz with Lerink Partners. Your line is open. Hi, good afternoon. This is Nick Gassig on behalf of Rwana.

Philip Nadeau: So each of those are really progressing very well and be they'll be providing more detail.

Philip Nadeau: Information on timing during the course of this year.

Philip Nadeau: Your next question comes from the line of Ruana release with Leerink Partners. Your line is open.

Philip Nadeau: Hi, Good afternoon. This is Nick Johnson on for a little on Oh, Thanks for taking our questions. Just first on HPV could you provide a little more color around how large the market opportunity is in HBV currently and also could you discuss.

Operator: Thanks for taking our questions. Just first on HDV, could you provide a little more color around how large the market opportunity is for HDV currently? And also, could you discuss what a possible accelerated approval pathway could look like for Tabetha Barton and H. D. V.? And then I have a quick follow-up. Okay.

Nick Johnson: What a possible accelerated approval pathway could look like.

Nick Johnson: Tobacco Barton.

Nick Johnson: Hello.

Tobacco Barton: Hello, Suraj and and HBV and then I have a quick follow up.

Marianne DeBacker: Thank you, Josh. Let me maybe begin by reminding everyone that delta is the most severe form of hepatitis. And as you know, people that are co-infected with delta progress to liver cancer four times faster and two times faster to death. So there's a tremendous unmet need here. I think that's the first point that I would like to make.

Speaker Change: Okay. Thank you Josh let me maybe begin with remarks reminding everyone that Delphi is the most severe form of hepatitis.

Tobacco Barton: As you know people that are co infected with delta progressed to liver cancer, four times faster and to them faster to death. So it is a tremendous unmet need here I think it's the first point that I would like to make and then looking at the prevalent we estimate that around about 100000 patients and unite.

Marianne DeBacker: And then looking at the prevalence, we estimate that there are about 100,000 patients in the United States and over 200,000 patients in the U5 alone. But we do believe that this is likely a gross underestimate given that diagnosis is really not optimal at this moment in time. So, you can assume that even if you were to access only a modest portion of this population, and if you think about pricing, which would reflect the clinical benefit of a potential transformative therapy, taking that together, we are confident that you would already be looking at a very large and significant market opportunity. And, you know, obviously, we believe that the combination regimen that we have of tobevibart and elapserone represents the potential of such And, of course, in a limited set of patients, but still very impressive, very impressive data. And with regard to an accelerated approval, I think I'll take that one, Marianne. Yes, please go ahead, Phil.

Tobacco Barton: At stake.

Tobacco Barton: And over 200000.

Tobacco Barton: <unk> five alone.

Tobacco Barton: And we do believe that this is likely a gross underestimate given that diagnosis is really not optimal at this moment in time.

Tobacco Barton: So you can assume that even if you weren't to access only a modest portion of this population and if you think about pricing that would reflect really the clinical benefit of a potentially transformative therapy.

Tobacco Barton: That together you have confidence that you would already be looking and a very large and significant market opportunity.

Philip Nadeau: I think that, you know, as we often like to say in the development space, data changes everything, and more data is always better. So I think that when we think about accelerated approval, or a rapid path to approval, what's in our favor is the fact that, you know, the unmet need, as Marianne has described, is undeniable. Right, there are hundreds of thousands of patients worldwide who would benefit from a chronic suppressive therapy for Delta, and the fact that there is a lack of good options for many of them is also clear.

Philip Nadeau: So I think that that all favors a rapid path to setting the right data. On the other hand, of course, our program is still early, and we're really waiting for our chance to get in front of regulators, and our anticipated goal post is Q3. And by then, we'll have a subset of data, which we've talked about previously, which we will share in Q2, which is 30 participants through week 12 and 20 participants through week 24 in our two regimens that we are exploring. And to remind you of that, that is the combination of tobevivir and elepsiron every four weeks versus just tobevivir every two weeks. Thank you, Phil. Geoff, did you have an additional question? Yes, this is Nick.

Tobacco Barton: Have in in the setting of the right data on the other hand of course, our program is still early and we're really waiting for our chance to get in front of regulators and are anticipated goal is goalposts Q3, and by then we'll have a subset of data, which we've talked about previously, which we will show in queue too which is 30 participants.

Tobacco Barton: <unk> 12, and 20 participants 324, and our two regiments that we are exploring and to remind you of that that is the combination of <unk> and <unk> every four weeks versus just put <unk> every two weeks.

And can fail just that you have an additional question.

Speaker Change: Oh sorry. This is next just wanted to follow up on H D V.

Operator: Just wanted to follow up on HDV. Curious, you know, what signals you're hoping to see in the upcoming additional data from Solstice? And maybe what are some of the gating factors for moving this program into Phase 3? I guess, like, what would regulators really want to see in this data that's supported? So Joseph, are you referring to Hepatitis C or Delta? I can take that one, Marianne.

Speaker Change: Curious you know what signals you, hoping to see in the upcoming.

Speaker Change: National data solstice.

Speaker Change: And maybe what are some of the gating factors for moving this program into the fees three I guess like what what would regulators really want to see in this data to support the beginning of this.

Speaker Change: Sorry, just a unifying to hepatitis.

Speaker Change: Downtown.

Speaker Change: Take that one so I think I.

Operator: So I think it's, thank you, Nick. So, as I said earlier, I think it's really a question of, you know, getting in front of them with the, so to answer your first question.

Speaker Change: Thank you Nick so.

Speaker Change: As I said earlier I think it's really a question of <unk>.

Speaker Change: Getting in front of them with the <unk>.

Speaker Change: So to answer your first question.

Philip Nadeau: There are three things we're looking for in the data. The first thing we're looking for in the data is, you know, does it repeat what we've seen with the original six patients? Second, what will happen when we dose patients who have compensated cirrhosis? And third, how durable will it be.

Speaker Change: There are three things were looking for in the data.

Speaker Change: The first thing we're looking for in the data is does.

<unk> repeat what we've seen with the original six patients.

Speaker Change: Second what will happen when we dose patients who have compensated cirrhosis and third how durable it will be I think that all of that data in terms of numbers will matter to the regulators and be able to reassure them. That's six patients. The data on six patient does not sort of a one off but actually something that really is as transformative as we believe.

Philip Nadeau: I think that all of that data in terms of numbers will matter to the regulators and be able to reassure them that the six patients, the data on the six patients, is not sort of a one-off but actually something that really is as transformative as we believe it to be. So in terms of gaining factors, I can only speak more generally, but once we have the opportunity to sit down with regulators in the third quarter, which is our anticipated goal, we'll be able to discuss with them, one, what the comparator arm would be, two, what the size of the safety database needs to be, and three, what kind of particular endpoints they would be most interested in that they believe would be demonstrative of transformative effic So that's what we're gonna be talking about. And then, of course, it's a matter of execution.

Speaker Change: It to be so in terms of getting factors I can only speak more generally but once we have the opportunity to sit down with regulators in the third quarter, which is our anticipated goal, we'll be able to discuss with them one what the comparator arm would be to what the <unk> the size of the safety database needs to be in <unk>.

Speaker Change: <unk>, what kind of particular endpoints they would be most interested in that they believe would be demonstrated of transformative efficacy. So that's what we're gonna be talking about and then of course, it's a matter of execution I will say that of course, we are planning for success in terms of both trial planning and regulatory interactions and so we'll continue to do so because this is almost.

Operator: I will say that, of course, we are planning for success in terms of both trial planning and regulatory interactions. And so we'll continue to do so because this is our most important clinical program and it's first out the gate. Yeah, so just to maybe add and repeat that already in the second quarter, we will be seeing 12-week data on 30 participants across the two regiments and then 20 participants for the 24 weeks. So that will give us a lot of insights into the data, helpful. Thank you. Your next question comes from the line of Eva Privatera with TD Cowan. Your line is open. Hi, good afternoon. Thank you for taking our questions. Just a couple from us. On the HDV solstice trial, there were some ALT elevations seen with the 2218 monotherapy, which came down with the combo. What's the mechanism for that?

Speaker Change: Port clinical program and his first out the gate.

Speaker Change: Yeah, So just to maybe add and repeat that alrighty and the second code that'd be that'd be.

Speaker Change: <unk> 12 free data on Saturday, Pakistan profits, so abdomen and then 20 participants for the plans for me so that they'll get that or maybe a lot of insights into the data.

Speaker Change: Okay. Thank you.

Your next question comes nine of Eva private Tara with T. D. Cowan Your line is open.

Eva: Hi, good afternoon, and thank you for taking our questions just copper from us on on the H D V. Solstice child, there was some L. T elevation scene with 2218 mono therapy, which came down with the combo, what's the mechanism for that and what are the.

Philip Nadeau: And what are the kinetics for achieving ALT normalization by suppressing viral RNA? I'll take that one, Eva. So thank you for the question. I think that it's important to remember that the number of patients dosed with 2218 or Elepsiron monotherapy is small, but we did see a couple of patients who did show an ALT signal. This replicates what was seen with other siRNA therapy in hepatitis delta patients.

Speaker Change: <unk> kinetics for achieving L T normalization with suppressing viral RNA.

Speaker Change: Oh I'll take that one Eva so thank you for the question I think that it's important to remember that the number.

Eva: A number of patients dose with 2218 or electron model therapy is small, but we did see a couple of patients who did show inhaled to signal. This replicates, what we've seen with other F. I I therapy in appetite delta patients in a larger study.

Philip Nadeau: In a larger study known as REEF-D, almost 70% of patients did see an ALT signal in patients receiving siRNA who had delta. But it's important to remember that when they gave an siRNA, and when we've given our siRNA to hepatitis B patients, we have not seen this. So it does not appear to be something intrinsic to the drug but some interaction between the drug and the hepatitis delta virus itself.

Eva: Known as <unk>, almost 70% of patients ditzy and L. T signal in patients receiving F Irna, who had delta, but it's important to remember that when they give an F irna and when we have given our assigning RNA hepatitis b patients we have Nazis. So it does not appear to be something intrinsic to the drug.

Eva: But some interaction between the drug and hepatitis Delta virus itself, so with that in mind. When you look at the data closely it seems to suggest that on treatment with an F. Irna. There is a paradoxical increase in HDTV RNA after some duration of therapy.

Philip Nadeau: So with that in mind, when you look at the data closely, it seems to suggest that on treatment with an siRNA, there is a paradoxical increase in HDBRNA after some duration of therapy. If that is the driving force behind the ALT signal, then it would make sense that driving that HDV RNA down further and preventing the infection of new hepatocytes would be key. And that's exactly what we intend to do with our monoclonal antibody, Tilbevibar, or VR3434. So the idea there is that any kind of fluctuation you would see in HDRNA that might be driving an ALT signal would be prevented by having a neutralizing antibody like Tobevivir. And so far, of course, the numbers are very small. In six patients, we did not see any ALT elevations, unlike the 70% of ALT elevations seen with siRNA monotherapy by another company.

Eva: If that is the driving force behind the <unk> signal than it would make sense that driving that HDD RNA down further and preventing the infection of new apatow sites with B T and that's exactly what we're intending to do with our monoclonal antibody <unk> or via a 34 34.

Eva: So the idea there is is that any kind of fluctuation you would see in H D V RNA that might be driving in aoki signal would be prevented by having a neutralizing antibody like tobacco part and.

Eva: And so far of course, the numbers are very small of the six patients. We did not see any allt elevations. Unlike the 70 per cent of Ah ALG elevation scene with S. Irony model therapy by another company and so that's the that's the thing will be looking forward to seeing as to what will happen. When we dose. These next 30 patients and the combination.

Philip Nadeau: And so that's the thing we'll be looking forward to seeing as to what will happen when we dose these next 30 patients in the combination arm. So to summarize, the mechanism is still not clear, but there are early signals that it is due to changes in the HDV RNA, and there are early signals that 3434 or Kvapivart can solve for that.

Eva: Arm.

Eva: So to summarize the mechanism is still not clear, but there aren't really sing that it is due to the changes in HDTV RNA and there are early signals that 34, 34 or <unk> consult for that.

Speaker Change: Perfect. Thank you and another question on on the HBV March child, you've previously shown that high antibody titers are predictors of sustained surface antigen loss do you expect to present antibody titer data at the 48 weeks end of treatment data in Q4.

Operator: Perfect. Thank you. And another question on the HBV March trial. You've previously shown that high antibody titers were predictive of sustained surface antigen loss. Do you expect to present antibody titer data at the 48 weeks end of treatment data in Q4? So we have not yet decided whether or not we will be sharing anti-HBS data along with the actual surface antigen loss. But we will be doing everything we can to provide as much clarity on our results at that time. So stay tuned. Perfect, thank you. Your next question comes from the line of Patrick Trucchio with HC Wainwright. Your line is open, and congrats on all the progress. I have a couple of follow-up questions on the Solstice program.

Speaker Change: So we have not yet guided to whether or not we will be sharing anti hbf's data along with the actual surface antigen loss, but we will be doing everything we can to provide as much clarity on our results at that time, so stay tuned.

Speaker Change: Perfect. Thank you.

Speaker Change: Your next question comes from the line of Patrick <unk> with H C. Wainwright. Your line is open.

Patrick: And congrats on all the progress I have a couple of follow up questions on <unk> program.

Philip Nadeau: So just first, a clarification around the next data readouts. I'm wondering first when we should expect the next update, or when should we expect the next update on the patient cohort data reported in ASLD 2023, specifically the proportion who achieve ALT normalization, which I understand can take longer than achieving HDV RNA below the lower limit of quantification, as well as assessment of the durability of the virologic response. I'm wondering if that update may be part of this data that's coming out in the second quarter, or if, you know, maybe we would see the next cut there later this year in the fourth quarter. And then, secondly, what we should think about the 44% of patients having compensated cirrhosis. Is this a proportion of patients with compensated cirrhosis consistent with what would be expected in a real-world setting for patients with chronic HDV, or how did you decide on that proportion?

Patrick: So just first clarification around the next day to read out I'm wondering first should we expect the next update for when should we expect your next update on the patient cohort data reported as I'll be 2023, specifically the proportion who achieve a L. P normalization, which I understand can take longer than achieving it.

Patrick: D V RNA below lower limit of clarification.

Patrick: As well as assessment of the the ability of the virus Virologic response, I'm wondering if that.

Patrick: <unk> may be part of this data that's coming in the second quarter or if you know maybe we would see the next cut there later this year in the fourth quarter.

Patrick: And then secondly, I'm wondering how we should think about the 44% of patients having compensated cirrhosis is this proportionate patients with <unk> is consistent with what would be expected and real world setting for patients with chronic HBV or how did you decide on that proportion.

Philip Nadeau: And then how should we think about these key endpoints, you know, like HPV RNA and normalization of ALT, and as well the safety profile of the combination regimen in these patients with or without compensated cirrhosis? All right, well, Patrick, you're going to challenge my memory to make sure I remember all those questions, but let me start with a compensated serotic question, move on to the endpoint question, and then finish with the durability question. So with regard to the compensated cirrhosis, it is, you know, the epidemiology on hepatitis delta patients and how many of them have compensated cirrhosis is not entirely clear, but it is certainly a large proportion, probably somewhere between, you know, 30 to 50%. That was not the reason why we ended up at 44%.

Patrick: And then how should we think about these key and points you know like HBV RNA and normalization of L. T.

Patrick: The safety profile of the combination regimen in patients with or without compensated cirrhosis.

Speaker Change: Alright, well, Patrick Youre going to challenge my memory to make sure I remember all those questions.

Patrick: But let me start with a compensated cirrhotic question move on to the question and then finally finished with the durability.

Patrick: So with regard to the compensated sources. It is the epidemiology hepatitis delta patients and how many of them have compensated for us is not entirely clear, but it is certainly a large proportion probably somewhere between 30% to 50%.

Patrick: That was not the reason why we ended up at 44% as you can imagine when you're enrolling this trial, we actually targeted around 50%, but you want to move off of the trial enrollment as fast as possible. So right now as I said in my prepared remarks was about 90% of the trial has been enrolled that's why it's at 44% I expect that number to call.

Philip Nadeau: As you can imagine, when you're enrolling this trial, we actually targeted around 50%, but you want to move the trial enrollment as fast as possible. So right now, as I said in my prepared remarks, about 90% of the trial has been enrolled. That's why it's at 44%.

Philip Nadeau: I expect that number to go up because the only patients left in screening are all patients with cirrhosis. So we'll probably get 44 or maybe even 48% or somewhere around there. But what we really wanted to do was to get at least 10 to 15 patients with cirrhosis per cohort to be able to understand what the kinetics of viral decline are and ensure that there are no obvious safety signals. So that's how the 44% is just sort of the result of where we are in enrollment. With regard to the endpoints, I think it is important to remember that, you know, how we think about the endpoints is both historical as well as forward-looking. So there are a few possibilities for the primary endpoint that I want to share with you. The first, of course, is the endpoint that was used by Boveritide, which was a combined virologic and biochemical endpoint.

Patrick: Because the only patients left and screaming are all cirrhotic are all patients with cirrhosis, So, we'll probably get 44, or maybe even 48% or somewhere around there, but what we really wanted to do was to get it.

Patrick: At least 10 to 15 patients with cirrhosis per cohort to be able to understand what the kinetics of borrowed recliner and ensure that there is no obvious safety. So that's how the 44%. It's just sort of the the result of where we are enrollment.

Patrick: With regard to the endpoints I think it is important to remember that.

Patrick: You know, how we think about the endpoints is both historical as well as forward look so there are a few possibilities for the for the primary endpoint that I want to share with you. The first of course is the endpoint that was used by <unk> tide, which was a combined virologic and biochemical endpoint, specifically that biologic endpoint.

Philip Nadeau: Specifically, that virologic endpoint allowed either too long a decline or getting to the limit of detection virologically, and then also requiring ALT normalization. But I think when you speak to physicians, providers, and virologists, what they'll say is they're not sure what a two-log decline actually means. For example, if you go from seven logs to five logs, you still have 100,000 copies of the virus in your blood per milliliter, and that obviously does not sound good.

Patrick: Allowed either a too long decline or getting to the limit of detection Virologically and then also requiring ALG normalization.

Patrick: But I think when you speak to physicians providers.

Patrick: And and and and virologist, what they'll say, they're not sure what to log the client actually means for example, if you go from seven logs to five locks you still have 100000 copies of the virus in your blood no heater and then obviously does not sound. Good. So we think as well as clinicians that getting the undetected <unk> are below the limit of quantification.

Philip Nadeau: So we think, as well as clinicians, that getting to undetectable or below the limit of quantification would be strongly preferred. So then you can imagine a forward-looking endpoint, and I think this is a likely possibility, of requiring patients to get to the low limit of detection or the lower limit of quantification and ALT normalization without allowing patients to achieve just a two-log decline in viral load. That would set a gold standard that I think we could definitely show a meaningful benefit on because it would require everyone to, at the first instance, get to the lower limit of quantification where we would have a possible advantage over the standard of care. So I think those are some of the color I can provide for you around the primary endpoint.

Patrick: Would be strongly prefer.

Patrick: So then you can imagine a forward looking at one point and I think that's unlikely possibility of reclining patients to get to the low limited protection or the lower level qualification and ALG normalization without allowing patients to achieve justice to log decline in viral load that would set a gold standard that I think we could definitely show a meaningful.

Patrick: Benefit on because it would require everyone to at the first instance get to the lower level qualification, where we'd have a possible advantage over the standard of care. So I think those are the some of the some of the caller I can provide for you around the primary endpoint and then as far as your third question around her ability I would say that we have actually not guided to the follow up.

Philip Nadeau: And then as far as your third question around durability, I would say that we have not actually guided for the follow-up on those six patients, but as we're gonna have nearly 20 participants at 24 weeks, we'll be able to share their kinetics of both viral load decline and ALT changes, which I think will be informative. And we will look into sharing the six-patient follow-up data as well in a future guidance call. Great! That's very helpful. Thanks so much.

Patrick: 506 patients, but as we're going to have nearly 20 participants at 24 weeks will be able to share their their kinetics of both borrowed load decline and allt changes, which I think will be informative and we will we will look into sharing the six patient follow up data as well.

Patrick: And a future.

Patrick: Guidance call.

Speaker Change: Great. That's very helpful. Thanks, so much.

Operator: Your next question comes from the line of Eric Joseph with J.P. Morgan. Your line is open, and what do you expect to be the ultimate treatment, duration, or kind of paradigm here with the Toby-Elli combination? Do you expect it to be finite therapy or chronic treatment? And if it is the former, how much sort of off-treatment observation do you think you would get?

Speaker Change: Your next question comes from the line of Eric Joseph with J P. Morgan Your line is open.

Speaker Change: Alright.

Speaker Change: Mmm.

Speaker Change: Okay.

Speaker Change: Alright.

Speaker Change: Okay.

Speaker Change: What.

Speaker Change: You expect to be the.

Speaker Change: Ultimate treatment.

Speaker Change: Duration or kind of paradigm here with the Toby already combination you expect it to be finite therapy or chronic treatment.

Speaker Change: And if it is the former finance.

Speaker Change: Interval.

Speaker Change: I guess, how much sort of off treatment observation do you think you would.

Operator: would sort of hope to have going into discussions with regulators. So Eric, sorry, the beginning of your question was a little bit difficult to understand, is the expected treatment algorithm going to be finite therapy or chronic therapy? If it's finite therapy, how much frequent follow-up do you think you would have going into initial discussions with regulators?

Speaker Change: Which is sort of hope to have going into discussions with regulators.

Speaker Change: Oh, Eric sorry at the beginning of your question with a little bit difficult to understand.

Eric William Joseph: Is the type of thing.

Speaker Change: <unk> is okay.

Speaker Change: Is the expected treatment algorithm is gonna be five eight <unk>.

Speaker Change: D or chronic therapy.

Speaker Change: If it's finite therapy.

Speaker Change: Oh.

Speaker Change: Do you think you would have going into initial discussions with regulators.

Marianne DeBacker: Thank you, Eric. Yes, so what we are aiming to achieve here is a chronic treatment regimen for hepatitis delta patients. Would you like to comment further, Phil?

Speaker Change: Thank you, Eric and yes, what we are aiming to achieve hearing the chronic treatment regimen for hepatitis application.

Speaker Change: <unk>, yeah, so with that in that framework of chronic viral suppressive therapy as we.

Philip Nadeau: Yeah, so in that framework of chronic viral suppressive therapy, as we currently know it, for example, for other viruses like HIV and or hepatitis B, there is no need for follow-up therapy as there is not a finite duration of therapy. I think one of the questions that can come up is, you know, are we going to be following these patients for 24 or 48 weeks? And of course, we'll follow for both, but the question will be with regulators, is there any precedent for earlier data? And there is with Bovetatide, and that's another discussion we'll be having with regulators. Anything you can share. Beep, and Bill DeParle.

Speaker Change: Currently no. It for example for other viruses like HIV and or hepatitis B.

Speaker Change: There is no need for a follow up therapy.

Speaker Change: Is there is not a finite duration of therapy I think one of the questions that can come up is are we going to be following his patients for 24 or 48 weeks and of course will follow up for both but the question will be with regulators.

Speaker Change: Is there any precedent for earlier data and there there is with the very tired and that's another discussion will be having with regulators.

Speaker Change: Anything.

Speaker Change: Anything you can share.

Speaker Change: The.

Speaker Change: The profile in amongst patients receiving the upfront.

Philip Nadeau: Thank you. Thank you, among patients receiving the upfront Combo Regiment in the 2C cohort. Yeah, so I think that certainly we're looking forward to the Q2 data from our Solstice trial and the patients who have started what we call de novo, or immediately on combination therapy without a lead-in. And what we've said is that we'll have about 30 participants between the two arms, actually, between mono and combo at week 12, and 20 participants at week 24. So you divide that in two, 15 of the patients will be through week 12, and 10 participants through week 24 in the combination arm, and we're looking forward to being able to share that data at Q2. Okay, great. Thanks for taking the question. Thank you, Sarah. Your next question comes from the line of Alex Stranahan with Bank of America. Your line is open. Hey, guys. Thanks for taking our questions. Just a couple from us.

Speaker Change: Combo regimen.

Speaker Change: 234.

Speaker Change: Yeah. So I think that certainly world, we're looking forward to the queue to data from our solstice trial and the patients who have started what we called the novo or immediately on combination therapy without a lead in and what we've said is is that we'll have about 30 participants between the two arms actually between motto in combo.

Speaker Change: At 12, and 20 participants and we 24, so you divide that into 15 of the patients will be through week 12, and 10 participants through with 24 and the combination arm and we're looking forward to being able to share that data you too.

Speaker Change: Okay, great. Thanks for taking my questions.

Speaker Change: Okay.

Speaker Change: Your next question comes from the line of Alec Stranahan with Bank of America. Your line is open.

Alec Stranahan: Hey, guys. Thanks for taking our questions just a couple from us.

Operator: You've mentioned in the past about expanding beyond infectious disease into, say, immunology, et cetera. Are there any areas of immunology or targets, such as, say, CD20, that you see as particularly interesting? And would you stay within your core competencies regarding antibodies and siRNA, or would you be more, maybe, technology agnostic? And one question on how you plan to allocate your $1.6 billion in cash. Maybe if you could break down the percent spend on pipeline development, discovery, clinical trials, and investments in your AI machine learning capabilities versus, say, dry powder for investing in external innovation, that'd be great. Thanks. Okay, thank you, Alex. Yeah, I mean, since its inception, DEAR has really been a leader in immunology and, of course, initially focused only on, really targeting infectious diseases.

Alec Stranahan: Mentioned in the past about expanding beyond infectious disease and to say immunology et cetera are there any areas of you Monology are targets safety and 20 that they used me as particularly interesting and would you say within your core competencies regarding antibodies and S. Irna or would you be more maybe technology agnostic.

Alec Stranahan: And one question on how you plan to allocate your 1.6 billion roughly in cash.

Alec Stranahan: Maybe if you could break down per cent spend on pipeline development discovery clinical trials.

Alec Stranahan: Investments in your AI machine learning capabilities versus say dry powder for investing in external innovation that'd be great. Thanks.

Speaker Change: Okay. Thank you Alex Yeah, I mean <unk>.

Speaker Change: <unk> has really been a leader any mythology and of course initially focus only.

Speaker Change: Really targeting infectious diseases.

Operator: But what we're really doing now is broadening that vision to what we call empowering the immune system, which is really, you know, giving patients the ability to empower their immune system to either fight infection or fight cancer. And we do it in two fundamental ways through our, you know, powerful antibody therapeutics, which we generate through AI engineering, and then secondly, through generating unique T cell responses in vivo with our T cell-based viral vector platform.

Speaker Change: Let's see I'm really doing now is it broadening that they tend to be calling piling the immune system, making sweetie.

Speaker Change: Giving patients the ability to to empower the immune system to fight infection, five cancer and they do it in two fundamental ways to our.

Speaker Change: Powerful antibody therapeutics between January three I engineering, and then secondly swing at generating unique <unk> final sector at that farm. So that type of expansion that'd be looking at attic a sweetie.

Marianne DeBacker: So the type of expansion that we're looking at, Alec, is really, you know, rooted in our strengths as a company and where we have deep expertise, and that is in immunology, virology, and oncology. So we're looking at expanding into viral-related diseases and then indeed immune targeting, such as in cancer. And we will be sharing more information on our early programs in that area towards the end of the year when we will be holding an R&D day. So, with that, I'll maybe ask Sung to comment on our cash position and breakdown. Yeah,

Speaker Change: You know rooted in our strength as a company we have deep expertise and that is any monology biology and oncology.

Speaker Change: So we are looking at expanding into viral associated diseases, and then indeed immune targeting Ah such as such as in cancer, Andy there'll be sharing more information early programs in that area towards the end of the year when the there'll be holding in detail.

Speaker Change: So with that that may be asked some to comment on our cash position and breakdown, yes, Sir.

Sung H. Lee: So, Alex, thanks for that question. With regard to our 1.6 billion in cash and cash equivalents, the majority of this will be dedicated to the ongoing clinical stage programs for hepatitis delta and hepatitis B. Of course, we have to sort of take this one year at a time as we have important data readouts for both of those programs this year. So, obviously, we're rooting for success, and that would dictate the capital allocation for subsequent years.

Speaker Change: Thanks for that question, so with regard to our $1.6 billion in cash and cash equivalents.

Speaker Change: The majority of this will be dedicated to the ongoing clinical stage programs of hepatitis Delta and hepatitis B of course, we have to sort of take this one year at a time as we have important data readouts and both of those programs this year.

Speaker Change: So obviously, we're rooting for success and that would dictate the capital allocation for subsequent years, but when you look at the immediate your 2024, we've provided guidance.

Sung H. Lee: But when you look at the immediate year, 2024, we've provided guidance. R&D and SG&A expenses combined, it's fair to think that more than half of that is dedicated to the development programs, primarily hepatitis delta and hepatitis B. There are amounts that will be invested in our antibody platform, and as Mary Ann said in her prepared comments, we'll be very opportunistic about tapping into external innovation where it makes sense. But we'll be very prudent about that. Great, I appreciate the color, thank you, and many others.

Speaker Change: R&D and SG&A expense combine it's fair to think that more than half of that is dedicated to the development program is primarily hepatitis Delta hepatitis B.

Speaker Change: There's announced that will be invested too.

Speaker Change: In our antibody platform and as Marianne said in her prepared comments will be very opportunistic about tapping into external innovation, where it makes sense, but will be very prudent about that.

Speaker Change: Great appreciate the color. Thank you.

Speaker Change: Hi, Kevin.

Operator: Thank you for your time. Thank you. Your next question comes from the line of Joseph Stringer with Needham and Company. Your line is open.

Speaker Change: Your next question comes from the line of Joseph Stringer with Needham and company. Your line is open.

Operator: Hi, thanks for taking our questions. Just a follow-up question on the Delta readout in the second quarter. It wanted to focus on cirrhotic patients. Clearly, safety will be key, will be key, but do you anticipate that it would be more challenging to show a treatment effect in these patients relative to non-sorotic patients, and how important from a commercial perspective would it be to show a clinical effect in these patients? Thank you, Joey. I'll take that one if that's all right with you, Marianne.

Joseph Stringer: Hi, Thanks for taking our questions just a follow up question on the Delta read out in the second quarter.

Joseph Stringer: If we wanted to focus on the cirrhotic patients clearly safety will be key will be key but do you anticipate that it would be more challenging show of treatment effect in these patients relative to the <unk>.

Joseph Stringer: <unk> and how important from a commercial perspective would it be to show clinical effect in in these patients.

Speaker Change: Thank you Joey I'll take that one if that's alright maryanne so.

Philip Nadeau: So in terms of cirrhosis, first off, I want to just provide a little clarity. You know, we need to distinguish between patients who have what we call compensated cirrhosis and patients who have decompensated cirrhosis. Decompensated patients are obviously much more fragile and have a high one-year mortality.

Speaker Change: In terms of cirrhosis slip this first off I want to just provide a little clarity we.

Speaker Change: We need to distinguish between patients who we have what we have.

Speaker Change: What we call compensated cirrhosis and patients who have decompensated cirrhosis decompensated.

Speaker Change: Decompensated patients are obviously much more fragile.

Speaker Change: Have a high one year mortality. So I think really we need to we are focused on getting our drugs to patients as fast as possible candidates.

Philip Nadeau: So, I think really we need to get our drugs to patients as fast as possible, or our drug candidates to patients as fast as possible, and that will include both compensated cirrhosis, patients with compensated cirrhosis, as well as those who are non-cirrhotic. We think that the, as I said earlier, I think the compensated cirrhosis patients are approximately 30 to 50 percent of patients currently living with hepati That number is obviously a little bit biased, simply because those with compensated cirrhosis are more likely to present to a clinician. In terms of whether or not we expect the efficacy to be any different, I don't see any biological reason why we would expect a different result in cirrhotic patients compared to non-cirrhotic patients from a viral efficacy perspective.

Speaker Change: Candidates to patients as fast as possible and that will include both compensated cirrhosis of patients with compensated cirrhosis as well as those who are not cirrhotic.

Speaker Change: We think that the as I said earlier I think the compensated.

Speaker Change: Cirrhosis patients are approximately 30% to 50 per cent of patients currently living with hepatitis Delta that number is obviously a little bit biased simply.

Speaker Change: Simply because those with compensated sources are more likely to <unk>.

Speaker Change: Present to a clinician.

Speaker Change: In terms of whether or not we expect the efficacy to be any different I don't see any biological reason why we would expect a different result, and cirrhotic patients compared to non cirrhotic patients from my firewall efficacy perspective from a safety perspective.

Philip Nadeau: From a safety perspective, there's also not any reason to believe that they would be a significant safety signal. I do want to point out that we did a hepatic impairment study in decompensated Child-Pugh-Turkot B patients, or CPTB patients, and there was no evidence to date of a clinically significant change in PK or safety in that small study. So I think that there's, again, no reason to believe there's a concern, but that's why we do the clinical trials, and that's why we're looking forward to seeing what that data looks like in Q2. Thanks for taking our questions. Thank you, Joy. Yes, thank you Troy. Your next question comes from the line of Mike Olds with Morgan Stanley. Your line is open.

Speaker Change: There's there's also not any reason to believe that they would be a significant safety signal I do want to point out that we did do a hepatic impairment study in decompensated chopped <unk> be patient through CPTV patients and there was no evidence to date of a clinically significant change in PK or safety and that's.

Speaker Change: Small study.

Speaker Change: So I think that there is again no reason to believe there is a concern but that's why we do the clinical trials and that's why we're looking forward to seeing what the data looks like and Q2.

Speaker Change: Great very helpful. Thanks for taking our questions.

Speaker Change: Thank you Joey Thank you Jerry.

Speaker Change: Your next question comes from the line of Michael's with Morgan Stanley. Your line is open.

Operator: Hey guys, thanks for taking the question. Maybe just to follow up for Sung, you know, thanks for giving, you know, clarity on how to think about OPEC spending this year, but maybe if I could push you a little bit as we think about moving beyond 2024. Maybe give us a sense of how to think about it trend wise, should we be thinking more flattish spend, or should we be thinking... an upward trend? I know a lot will depend on kind of what happens with some of these readouts here, but any comments there? Yeah, thanks for the question, Mike.

Michael: Hey, guys. Thanks for taking the question, maybe just a follow up for songs.

Michael: Thanks for giving clarity on how to think about Opex spin this year, but maybe if I could push you a little bit you know as we think about <unk>.

Speaker Change: Moving beyond 20th 24.

Michael: Maybe give us a sense of how to think about it Trent why should we be thinking more flattish spend or should be thinking you know sort of an upward trend.

Michael: A lot will depend on kind of what what happens with some of these readouts here, but any any comments there would be helpful. Thanks.

Trent: Yeah. Thanks for the question like so.

Sung H. Lee: So, you know, kind of going back to what I said before, the bulk of the capital allocation, if we continue to demonstrate successful data with hepatitis delta and hepatitis B programs, as we have done for the last 18 months, that would garner the lion's share of capital allocation. So, moving beyond 2024, we would expect hepatitis Delta and hepatitis B studies to continue to wrap up. They're still in Phase 2. As we get into Phase 3, both of these studies will peak, but that peak would not be reached in 2025. The peak would most likely be reached somewhere in the second half of the 2026 to 2027 time frame as things progress.

Trent: Kind of going back to what I said before.

Trent: The bulk of the capital allocation, if we continue to demonstrate successful data with hepatitis Delta and hepatitis B programs as we have of the last 18 months that would garner the lion's share of capital allocation So movie.

Trent: Moving beyond 2024, we would expect hepatitis Delta and hepatitis B studies to continue to wrap up.

Trent: They're still in phase two.

Sung H. Lee: As we get into phase three deep both of these studies with Pete but that would not be reached in 2025.

Trent:

Sung H. Lee: The <unk> most likely you've reached somewhere in the second half of 2026 to 2000 2070 timeframe as things progress but.

Sung H. Lee: But again, we have to really take this one year at a time because it's dependent on data. I might just add, though, when you look at the guidance for 2024, we put a lot of information out there to help you think about not only GAAP operating expenses excluding cost of sales but also how to think about cash utilization from our guidance range because we've provided you with important non-cash items. So both on an operating expense basis and cash utilization basis, we would be significantly lower than 2023, which we would consider a peak year driven by the flu study and related manufacturing. And I'll just round out my statement by saying that on an operating expense basis, when you exclude the non-cash significant items, we would expect to be down 18% year over year. This is significant, and again, from all the cost optimization efforts undertaken last year and coming off the peak of the flu investment last year as well.

Trent:

Trent: Again, we have to really take this one year at a time because.

Sung H. Lee: Cause it's dependent on data.

Trent: I might just add though when you look at.

Trent: The guidance for 2024.

Trent: Put a lot of information out there to help you think about not only gap operating expenses, excluding cost of sales, but also how to think about cash utilization.

Trent: From our guidance range, because we've provided you with important non-cash items.

Sung H. Lee: So both on and Opex basis, and cash utilization basis, we would be significantly lower than 2023, which we would consider a P gear.

Sung H. Lee: Driven by the flu study and related manufacturing and I'll just.

Sung H. Lee: Round out my statement by saying.

Marianne DeBacker: Operating expense spaces, when you exclude the non-cash significant items.

Sung H. Lee: We would expect to be down 18% year over year.

Sung H. Lee: Which is significant and again from all the cost optimization efforts are undertaken last year.

Sung H. Lee: Coming off the peak of the the flu investment last year as well.

Sung H. Lee: Got it. That's helpful. Thank you. There are no further questions at this time. I will now turn the call over to Mary Ann DeBacker for closing remarks. Okay, thank you, operator. So to close, we are eagerly anticipating our multiple data catalysts that really, in our minds, hold great promise for patient impact and for value creation. And we are well on our way, as we said, to powering the immune system to transform lives.

Speaker Change: Got it that's helpful. Thank you.

Speaker Change: There are no further questions at this time I will now turn the call over to Marianne tobacco for closing remarks.

Speaker Change: Okay. Thank you operator, so to close B R eagerly anticipating a multiple data.

Sung H. Lee: That's really mind.

Speaker Change: <unk>, a great comments for patient impact for value creation, and we are well on our way.

Speaker Change: <unk> system to transform lives.

Marianne DeBacker: Thank you all for joining us today. And operator, you may end the call. Thank you. This concludes today's call. You may now disconnect.

Speaker Change: Thank you all for joining us today and operator, you may have to call. Thank you.

Marianne DeBacker: This concludes today's call you may now disconnect.

Marianne DeBacker: [music].

Marianne DeBacker: Mmm.

Marianne DeBacker: Mmm.