Q4 2023 Arcus Biosciences Inc Earnings Call and Business Update
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Hello, and welcome to the ARCUS Bioscience and says Oh, Yes, Slash Q4 2023 earnings call. My name is Elliott's in all recorded 19 your cold stack.
If you would like to register no question Jens Page event. Please press star followed by one on your telephone keypad.
I'd now like to hand over to Pierre <unk>, Vice President of Investor Relations. The floor is yours. Please go ahead.
Hello, everyone and thank you for joining us on today's conference call to discuss <unk> fourth quarter 2023 financial results and pipeline update I would like to remind you that on this call management will make forward looking statements, including statements about our cash runway and our expected clinical development milestones and timelines all statements other than historical.
<unk> reflect the current beliefs and expectations of management and involve risks and uncertainties that may cause our actual results to differ from those expressed those risks and uncertainties are described in our annual report on Form 10-K, which has been filed with the SEC. We strongly encourage you to review our filings today, you'll hear from our CEO.
Terry Rosen C O O Jennifer Garrett CMO, Dmitry, now turn and CFO, Bob <unk> will also be joined by our President one high end for questions. After the prepared remarks during today's call. We will refer to slides in our corporate deck, which can be found on the investors section of our website with that I'll now turn it over to Terry.
Thanks very much.
Thank you all for joining us today.
We've really come a long way since our founding nine years ago, and I think it's fair to say, we have evolved into an integrated biopharmaceutical company.
<unk> molecules in clinical development, our broad late stage portfolio multiple mid stage clinical trials, a robust discovery engine and know something I think knew a line of sight to commercialization.
With $1 $2 billion in cash and equivalents and runway into 2027, we are well positioned to deliver on the promise avoid stage pipeline that we've built.
Our three new Registrational trials, we're going to continue to invest in our early stage programs.
Also have a partnership with gilead as well as collaborations with <unk> and Astrazeneca.
I think it's very fair to say without these partnerships and the resources that these companies provide we would not be able to execute on everything that we're doing all of our programs targeting markets that are massive and really are the sweet spots of large pharmaceutical companies all comer patient populations in lung cancer gastric cancer.
We added cancer and renal cell carcinoma RCC.
Bonding and partnerships enable us to not only pursue these settings, but to compete and compete effectively and aggressively we're really doing what we're saying we're doing.
We also continue to build for the long term with a broad pipeline of potential best in class and first in class product candidates that will continue to replenish organically.
Our drug discovery engine.
Today, we have three advanced clinical stage programs.
Jim.
Our FC anti ticket very differentiated molecule.
Anti PD, one antibody quinley, our small molecule CD 73 inhibitor and 85 to one <unk> two alpha inhibitor, which is as of today known by its generic name kept databank or tests.
<unk> is in phase III, and we expect to initiate phase III studies for both tasks incredibly by early next year. So we'll have four molecules all with distinct mechanisms in phase III in 2025.
You also have some exciting datasets coming in the first half of this year for another molecule and these really are exciting E trauma.
Our <unk> receptor antagonist.
Julia I believe support further investment in the molecule.
We made a lot of progress across all of these programs in 2023, presenting two large datasets for dump them in two different cancers and another large data set just last month for equivalent in pancreatic cancer I want to start today by reviewing these programs and data center.
And a few minutes on the recent Gilead partnership updates and finish with some new data for Cas or <unk> Alpha inhibitor.
So starting with our anti <unk> program Dumbs in our primary competitors in this space our Mercury rule.
We have the only FC styling unite tangent antibody in late stage clinical development, so with them potentially best in class profile, it's optimized dosing regimens as well as a broad development program focused on lung and gastric cancers, we're really in a very strong competitive position our conviction in Zen.
Supported by data set that we presented in the last 12 months and are summarized on slide nine of our corporate deck.
First at <unk> last year, we presented data from our randomized phase II <unk> study showing a PFS hazard ratio of <unk> 67, predominantly relative to Zim monotherapy in first line PD Lone high non small cell lung cancer.
We also presented data from our phase II edge gastric study, we evaluated <unk> plus chemo in first line upper Gi cancers, if the escrow plenary session in November.
These data demonstrated an impressive six month landmark PFS rates of 93% PD Lone high patients and 77% all overall theres really compares quite favorably to the historical benchmarks for anti PD, one plus chemo that are in the 50% to 60% range or.
Our development program for them.
This focus on things, where we have the best chance to be a market leader.
Today, we have three phase three trials enrolling and we expect both star one to one and start to two one our chemo combo trials and PDL one all comers for first line non small cell lung cancer and upper Gi cancers, respectively to complete enrollment this year in fact, we can share now today than we.
Great start to two one will be fully enrolled by the middle of this year.
Due to the extremely rapid enrollment of start two to one and relatively short OS for the standard of care, we expect to start to two one to be the first of our phase III trials to readout and importantly, with no other phase III trials ongoing with the anti <unk> antibodies in this setting we expect to have a significant first to market.
Vantage.
Meanwhile, we continue to invest in the expansion of our <unk> program, we and Gilead will initiate star 131, which will be value abdominal simplest chemo periodically at the lung cancer. This is an exciting early stage and potentially curative setting. We also expect to initiate a fourth phase II study in a city outside of <unk>.
In Gi cancers beyond our <unk> program today, we'll be sharing data from the dose escalation phase of our arc <unk> phase won't be trial of test data pass or 85 to one.
100 milligram expansion cohort of arc 20, enroll quickly and have completed enrollment ahead of schedule in November of last year.
Later today, we'll touch on what we're seeing so far in these data the competitor here is Merck with their <unk> two alpha inhibitor. Those unit fan, which was just approved for advanced clear cell RCC, but we believe that <unk> has the best in class profile and that's addressing a very well recognized limitation builds into fan.
What we've seen thus far in <unk> 'twenty, just given us confidence that our molecule has a superior profile to that of those new defense, we're advancing <unk> rapidly and are on track to initiate a phase III study early next year.
<unk> frequently our CD 73 inhibitor, we presented overall survival data in pancreatic cancer from our <unk> study at ESMO Gi last month with a large pool dataset 122 patients. We showed 15 seven months median overall survival frequently post chemo, both with them with.
Zim.
This compares to the median OS from historical Jim Nab Paclitaxel studies nine to 11 months in first line pancreatic cancer.
We also conducted a matched synthetic control analysis that showed a statistically significant improvement in OS with a hazard ratio of <unk> 63.
Based on the strength of these data we are on track to initiate a phase III pancreatic cancer trial by early next year with.
With Gilead equity investment in January we had approximately $1 $2 billion of cash on hand, and we are really well capitalized to support the breadth of programs that we're pursuing.
At a high level Gilead investment accomplishes two things first it provides us with runway into 2027, while enabling us to fund phase III programs for four different molecules second it enables us to fund our pre commercial activities and on the other end of the spectrum two.
Continue supporting a robust discovery engine.
I'd like to turn things over to Jen right now to spend a few minutes on the details. Thanks, Terry Gilliam invested $320 million by purchasing our stock at $21 per share, which represented an effective premium of nearly 40% towards share price just before the announcement.
Increasing their ownership to 32% and <unk>.
Gilead Chief Commercial officer, John Murtha join Herbalife for addition increases or board membership to three provides representation commensurate with their ownership and bring a very experienced commercial perspective to the board.
The investment funds for two dynamics Guang expansion of our late stage clinical development plans.
The extension of our cash runway into 2027 multiple.
Concurrent with the investments we've made a few strategic portfolio changes related to content and quickly.
First for Donaldson, we closed enrollment of our phase III are 10 study evaluating Don San Antonio and high non small cell lung to focus our resources and capital on hearings with the highest unmet need.
<unk> market opportunity.
Several factors that drove our decision with the evolution of the lung cancer treatment paradigm towards increased use of anti PD, one plus chemo for patients with PDL one hi.
Pressing tumors.
Therefore, we believe this segment of the patient population.
Crafted by our Star went to one study a chemo combination study in PD lone I'll come or non small cell lung cancer. The clinical trial landscape for PD Lone high launch has also become increasingly crowded with several anti ticket and other investigational therapies and we were not expected to be first or second in the PD Lone high.
Resetting.
At closing our Tam we are now able to focus our energy and resources are rapidly completed enrollment for <unk>, which is addressing a much larger market opportunity.
Also initiate at four thanks for setting for Thomson Star Winter line, a potential first to market opportunity.
Second frequently.
Artists will be operationalized in funding a phase III study evaluating <unk> in pancreatic cancer.
We have retained an option to the pancreatic cancer program with the opportunity to pay a premium to their share of the phase III costs in the future.
Gilead is not co funding the study as you might imagine.
The proceeds from the investment will be used to fund. This study I'll now turn it back to Jerry.
Thanks, Jim.
I'd like to switch gears to cash our shift to alpha inhibitor. This year is essentially going to be coming up for this program.
Planning to release, a lot of new data as well as more information on our future development plans, we believe that by hitting the gift too. We also target harder than <unk>, we can improve outcomes for patients who will discuss the pharmacokinetics and pharmacodynamics that support this thesis in more detail shortly.
But I'd like to start with the potential areas for differentiation versus bills or defend.
<unk> was recently granted approval as monotherapy and third line clear cell RCC. After just a three month FDA review process has really validated mechanism and highlighted the high unmet need for new therapies in this market and merck's phase III light spark formal five trial.
Those who defend showed an improvement in PFS over everolimus with a statistically significant hazard ratio of <unk> 74, which supported its approval. While these results are absolutely encouraging the study revealed multiple opportunities for new agent to prove upon those new defense profile and provide.
Even more benefit to patients.
First on clinical efficacy and livestock, all five those who defend hit a high rate primary progression, specifically, a 34% PD right, which was actually higher than that of the everolimus control arm to 22%. This means that over one third of patients on <unk>.
Progressed at or before their first scan.
We believe that kids data fan could stabilize tumor grow faster, resulting in lower PD rate therefore longer PFS.
With an overall response rate of 21, 9% in <unk> five we believe there is room for improvement.
Third while light spark all five showed a statistically significant psf PFS hazard ratio. The median PFS was only five six months.
<unk> may result in more durable tumor stabilization of shrinkage, therefore longer median PFS fourth and this is an important.
We believe there is an opportunity for a better tolerated combination regimen.
Sue Defense T care partner in earlier line.
<unk> studies as <unk>, which is perceived.
It's really is perceived that way to be less well tolerated relative to other <unk> such as cable and vans up last we are being very thoughtful in our development strategy for test and we'll focus on settings and combinations, where we believe we can be first to market or differentiated relative to <unk> and you'll hear more about this.
Over the course of the year as.
As you May know Merck is now projecting that <unk> has blockbuster potential given the opportunity and we're pushing this programme is hardest possible and while our data will be more mature later this year, we wanted to share as much as possible today to illustrate why we're so excited about this program I'll now turn things over to Dmitry the share.
New data from our <unk> trial evaluating <unk> in cancer patients.
Thanks Terry.
I'll start by turning to slide 29 of our corporate deck, which shows design of the trial, including both the dose escalation phase and expansion cohorts the dose escalation portion enrolled patients with any advanced solid tumor while the dose expansion cohorts are only enrolling patients with second line or later clear cell RCC.
There are three expansion cohorts each of which will enroll 30 patients to first evaluated our go forward dose of 100 milligrams per day and completed enrollment in November to satisfy the fda's requirement for dose optimization. We are also evaluating a 50 milligram dose cohort and another cohort at a higher dose.
And 100 milligram in the expansion phase enrolled.
Enrolment of the 50 milligram cohort is nearing completion.
Collectively these expansion cohorts will generate a lot of valuable safety data and efficacy data in clear cell RCC patients.
The dose escalation portion employed a three by three design. We had three patients received 20 milligrams followed by key patients who received 50 milligrams and then three patients who received 100 milligrams daily dosing regimens. The safety results of our healthy volunteer trial enabled us to start in our 'twenty, our patient trial at a relatively high.
Pharmacologically relevant dose and we saw no dose limiting toxicities, allowing us to complete the dose escalation phase with only nine patients. We subsequently backfields to 50 milligram dose cohort with the additional patients resulting in 12 patient data set for this portion of the study.
After 12 patients four patients have clear cell RCC.
Slide 30 is important and shows data for cash and balance on Epo <unk>.
Reductions the peripheral or normal tissue biomarker for <unk>, two alpha inhibition on the left hand side. The dotted line shows the Epo reductions reported for the 120 milligram or the approved dose of <unk> in clear cell RCC patients in.
Contrast gas achieved the same level of Epos depression, and just 20 milligrams Shelly here with the Purple line and that is one fifth of our go forward dose of 100 milligrams. This means that to 20 milligrams is roughly equivalent from a BD perspective to the approved dose of <unk> and <unk>.
Therefore, 100 milligrams of gas has the potential to achieve a meaningfully greater <unk> ambition.
On the right hand of the slide you can see that cash has a linear almost perfect dose proportional pharmacokinetics profile. In addition, cash has a half life of approximately 21 hours and this enables daily dosing.
31 emphasizes the ideal PK of cash relative to that they'll see defense and it explains why <unk> cannot simply be dosed higher to achieve greater <unk> ambition on the rights for gas we show that we increase the dose from 20 to 100 milligrams and steady state and wheelchair raw.
Five times increase in exposure by comparison as you can see on the left when belt dose.
<unk> increased from 120 to 240 milligrams to drug exposure only increased by about 30% at steady state a 30% increase in exposure is less than the typical patient to patient variability at any given dose and therefore, it is not a clinically meaningful increase.
Illustrates by doses higher than 120 milligrams of Bell <unk> are unlikely to result in meaningfully debtor clinically active clinical activity and in fact this was demonstrated by Mark.
The Lightbox 13 trial, comparing the efficacy of 120 milligrams and 200 milligrams of <unk>.
In summary, these data show exactly what we have been predicting that gas has a best in class PK PD profile, which should result in hitting the target harder and potentially in greater clinical activity relative to dose to defend.
Turning now to safety on Slide 32, we showed reductions in hemoglobin levels at various doses of cash relative relative to that too.
<unk> the approved dose of <unk> hemoglobin reductions appear to plateau at doses above 50 milligrams forecast likely due to competition Tory mechanisms and you can see that 100 milligrams daily of cash resulted in similar reductions of hemoglobin <unk>. Despite the fact that we are achieving higher doses.
Much higher doses, both potency corrected truck exposure forecast for this reason, we expect <unk> safety profile to be manageable and not meaningfully different <unk> defense.
On the next slide Slide 33, we show the AE profile, so far in the dose escalation phase of the study anemia and hypoxia are expected on target toxicities related to hip developer inhibition, but we are watching very closely.
With a median follow up across all dose levels of the escalation of about $8 eight months. So far these rates do not appear to be higher than the rates seen with those who defend and historical clinical trials deep data demonstrates that while we believe that we are hitting the target harder cast appears to have a similar safety profile to <unk>.
So let me tie. This together we are effectively able to deliver an exposure to cash that is fivefold greater than that which achieved the same level of inhibition of the peripheral biomarker for him to also locate.
Excuse me associated with the approved dose of <unk> with no apparent differences in safety profile.
While the efficacy was not the objective of the dose escalation phase, particularly given the advanced stage of patients and the different doses evaluated and different tumor types included on slide 34, we do summarize what we observed in RCC patients specifically clear cell RCC patients as I mentioned earlier there are four patients.
Across the three different dose levels be evaluated 20 milligrams 50 milligrams and 100 milligrams.
These are old late line patients with a variety of prior treatment regimens, including at least one anti VEGF treatments and <unk> anti PD one treatment three out of four patients are actually fourth line or later and for these for RCC patients to have meaningful tumor reductions just short of 30% in the third patient.
Did not experience any tumor growth for over 14 months and still remains on treatment. The time on treatment is impressive for these patients in very late line setting ranging from eight 5% to 14 five months and two of the four patients still remain on treatment. This indicates the potential of very durable effects of cash.
Even with mono therapy in a very advanced patient population.
We are also seeing signs of <unk> ability to bring even aggressive tumor growth under control for example, one of the.
Four patients I mentioned was very heavily pretreated had received three prior fed <unk> anti PD, one treatment and this patient had stable disease early on with slight increase in tumor volume not meeting formal progression per resist.
And after about 18 months to tumor volume started to come down and now after about 10 months and still ongoing on treatment. The patient is nearing response.
I would like to Emphasise to dwell the primary goal of an all comer dose escalation studies to establish the safety profile and assess the pharmacokinetics and pharmacodynamics, we have already seen clear signs of anti tumor activity in patients with advanced clear cell RCC and we believe the tumor shrinkage and the duration beyond one year for <unk>.
Patients who have exhausted all available treatment options are very clinically meaningful.
Ongoing expansion portion of the face is designed to give us a better read on efficacy and this is already providing clear support for the initial observations in the dose escalation phase and I would like to make a few comments on the early data of the expansion portion of the study the 100 milligram cohort.
<unk> completed enrollment in November.
So we have a mature and rich data set in hand for 30 clear cell patients treated at 100 milligrams of cash. While these data are still early we are already seeing glimpses of cast as potential for differentiation overbuilt Super fan, who will share the full data set at a medical conference later this year, but we did feel it was important.
To share some highlights of the data today.
The majority of patients in the expansion cohort have only had one or two scans and we scan patients approximately every six weeks. So its about one five to three months of follow up Nonetheless, even with this very short duration of follow up. The response rate. We are seeing which includes unconfirmed responses given how limited to follow up time.
Yes it.
It's already in line with the response rates for <unk> 005, we also have a substantial number of patients early in their treatment, who have experienced tumor shrinkage, but have not yet crossed the formal threshold of 30% to meet a response.
This obviously can happen with longer duration of treatment on future scans.
Secondly, we are seeing a relatively low primary progression rate and this is the percentage of patients whose best overall response is progressive disease. So these patients have tumor progression on the first scan. This may indicate that Kansas ability Quechua cask and stabilized tumor growth early on during treatment.
And this will be an important they're needed to monitor in the future as it represents an opportunity to approve upon something that loss reported for docs, who defend in summary, we are very encouraged by these early dose escalation and expansion cohort data, which while early have provided an encouraging signal at Kansas.
PK PD profile could translate into greater efficacy in the clinic.
By midyear, we will have a minimum of seven months of follow up for all 30 patients in the 100 milligram expansion cohort, which should provide the mature look at the overall response rate and we expect to present. These data at a medical conference in the second half of the year.
As I mentioned earlier, our 'twenty includes two additional expansion cohorts and we expense.
And we expect.
This.
Also be presented over the next 12 to 18 months.
We also expect data from stellar <unk> nine our study evaluating.
Gas together with sensitive sensitive.
<unk> also referred to as Samsung sometime in 2025.
We are full speed ahead to our phase III study and we expect to disclose more on our development plan in the coming months, Gary will outline auto catalyst for 2024, but first I will turn things over to Bob to discuss our fourth quarter and full year financials.
Thanks, Dmitry as Terry outlined earlier ARCUS continues to be in a very strong financial position our cash as of December 31, 2023 was $866 million and increased to $1 2 billion. After Gilead January equity investment.
Importantly, our partnership with Gilead is very capital efficient because we share the majority of costs for option programs $50 50, including multiple phase III studies for <unk>.
<unk> is also committed to pay the $100 million option continuation payment due in July under the collaboration agreement.
So we expect our cash balance at the end of 2024 to be between $870 and $920 million and now expect our cash to fund operations into 2027.
This guidance excludes other potential opt in payments and approval milestones from our partners.
Turning to our P&L, we recognized GAAP revenue for the fourth quarter of $31 million, which compares to $32 million for the third quarter of 2023.
Our revenue is primarily driven by our collaboration with Gilead and we are evaluating the impact of the recent amendment on our revenue for 2024 and beyond <unk> and.
In addition to our partnership with Gilead, we have a partnership with Tyco for Dom in Japan.
In the fourth quarter, we received a milestone payment of $14 million from tyco related to their participation in our start to two one pivotal study and we will receive another $30 million in the first quarter of 2024 related to their participation in our start to two one and star one to one pivotal studies. We are also eligible for additional.
No milestone payments of $10 million in the first quarter of 2025 from Tayo related to star one to one.
Our R&D expenses for the fourth quarter, our stated net of reimbursements from Gilead and were $93 million as compared to $82 million in the third quarter of 2023 in the fourth quarter noncash stock compensation represented $9 million of R&D expenses.
The increase in the fourth quarter was related to standard of care purchases for our clinical trials.
We continue to expect modest increases in R&D expenses as our phase III studies mature and spend will fluctuate primarily based on the timing of clinical manufacturing activities and the purchase of standard of care therapeutics for our clinical trials.
G&A expenses were $29 million for the fourth quarter of 2023 compared to $30 million in the third quarter of 2023 noncash stock compensation represented $9 million of our G&A expenses for the fourth quarter and we expect G&A to remain stable for 2024 <unk>.
For more details regarding our financial results. Please refer to our earnings press release from earlier today, and our 10-K I'll now turn it back to Terry for concluding remarks. Thank you very much Bob before we open the floor to questions I'd like to briefly touch on upcoming catalysts for 2024 beyond the arc <unk> data sets that Dmitry hi to highlight.
Theres a lot this will be another data rich year for argues for the anti <unk> program will be presenting updated data from edge gastric our phase II study evaluating <unk>, plus chemo and upper Gi cancers that ask of this year.
We expect this data set to include updated or our PFS data. We also look forward to announcing the completion of enrollment for star one to one two to one which will obviously start the clock for potential regulatory filings. We also made sure data and insights from our 10 for the future Medical conference as I mentioned earlier.
<unk> represented impressive overall survival data from our phase <unk> trial, there was one evaluating <unk> in first line pancreatic cancer also related to the adenosine pathway, we have to randomize datasets that we expect to share in the first half of the year for trauma or a two receptor antagonists.
And we believe these confirm our findings and arcade that adenosine modulation confirm.
Improvement on overall survival. So first off Roche will be presenting data from Morpheus P. Derrick. This is a randomized study operationalized by Roche did evaluate the trauma in combination with chemotherapy.
So their anti PD, one antibody versus chemo in pancreatic cancer. So a randomized study that involves the tumor.
Second we submitted data from the third line cohort of arc nine presentation at a medical conference. This cohort enrolled 105 patients and evaluated <unk>, plus <unk>, plus Bev and full Fox versus Rego. The current standard of care in third line colorectal cancer.
The presentation will include mature PFS, and importantly, OS data, which we believe are also very supportive of the potential for adenosine modulation when combined with immunogenic chemotherapy to robustly remain robustly prolonged PFS Nols so.
In conclusion, we've covered a lot today not a material, but if there's one thing to take away from today's call that ARCUS has now fully enabled to execute on its diverse late stage portfolio with funding into 2027.
Excludes potential future opt in payments our portfolio includes six ongoing and planned phase III trials multiple phase one studies in a discovery engine, that's just capable of generating at least one IND per year.
Our trials are focused on huge markets by any standard volume Gi cancer, pancreatic cancer, and RCC, where we're extremely well positioned to compete for potential first to market. Our best in class therapies, we have a lot going on I think a lot more to come this year. Thanks for your interest and support for our business as we can see.
<unk> broadened our portfolio of innovative combination cancer therapies.
Working to bring these treatments to patients as soon as possible. We will now open the floor to questions.
Thank you.
Like to ask a question. Please press star followed by one on your telephone keypad. If you would like to withdraw your question. Please press star followed by two one.
One for Greg to ask a question please enjoy devices on mute locally.
Yeah.
Last question comes from Terence Flynn with Morgan Stanley. Your line is open. Please go ahead.
Hi, Thanks for taking the question two part one for me just wondering on cast the hip to Alpha program Slide 24, the dose expansion data can you just confirm what the or was and how many of those were actually confirm versus unconfirmed and then the second part of the question relates to.
A potential gilead opt in on this program, maybe Terry you can just remind us the mechanics of how that type of a decision would work in terms of how little or how much data you would provide to gilead and then how long they have to make a decision. Thank you.
Great.
So on the first question we.
We did share a specific or are intentionally.
Actually 70% of the patients have only had one or two scan so.
We will wait till the second half of the year to give that number but we're seeing a number of responses and in fact, then there's double digit patients that are stable disease with tumor.
A reduction that may convert.
<unk> response, the second part with respect to Gilead often.
Have defined very specific criteria together with them.
We haven't shared those exactly but if you.
Look at what we've described in general for the relationship.
That often occurs when we've generated proof of concept data. So you can draw your own conclusions as what's coming later this year and our belief is that they are very excited about the molecule in the program, but we will see what they actually decide I'll make one last final point.
There is a program that we obviously wouldn't mind, taking forward ourselves and we also have plenty of inbound interest.
From other companies that might see a strategic fit.
The rest of their portfolio.
We now turn to Peter Lawson with Barclays. Your line is open. Please go ahead.
Great. Thanks for the update things.
Information.
On cash is not able to reduce the number of bus progressed as you were talking about.
And have you seen any complexity in recruiting patients for a two hour plus things.
Two non approved drugs.
Any way you think effects that the patient should get to see.
So we actually have had a number of discussions.
On that topic, we do not see that we're going to be.
Well will decline for the rest of the world.
Future development strategy.
We're going into settings that we think makes.
Makes sense.
With vans.
And we also in parallel we'll be exploring combination with Cabo. So we'll have both of those under our belt, but we feel very good.
About our ability to enroll and keep in mind.
We're not planning on.
Obviously in the context of this question.
To be.
Going after monotherapy at this point and so on.
We'll be going against the standard of care that doesn't involve <unk> and we feel like very well positioned to execute on those trials and in fact, a huge degree of excitement. We've already had our first AD board meeting and the enthusiasm for both hips.
<unk> is a general mechanism from what investigators have seen with bells as well is there anecdotal experience, which is now starting to get to be substantial with Cas.
The field very exciting so we actually expect very rapid enrollment as we've seen already for.
Of this molecule.
Okay, and then just on the kind.
<unk>.
Rapid progresses that you kind of seeing that.
Or a reduction in net revenue.
Yes.
So if you look at our.
But for the phase III study for BELBUCA and and you can look at what the primary progression rate wasn't that study and were lower than that.
We talk to investigators.
Five.
Primary progression rate, which is relatively high.
What kind of thing that stuck out for them. The results of all were very encouraging but I think that's one thing that they would like to see improved upon what the primary progression rates as the number of patients, which is kind of blue writer of Outlander fan treatment. So.
Like I said, you know, we're seeing a lower number than that we think it's another opportunity to improve upon that and then I'll be more to come on that later in the year.
Perfect.
Wine are removing the effects of about I think the most producing what we would say a pretty profound effects on.
Overall survival, which is.
To us very important and so far as the <unk> versus <unk>.
We've had that question in mind for some time at this point, we'll still say other than some very specific settings, where there may be.
Known non CD 73 mechanisms for adenosine formation from adenosine triphosphate.
We would say well hold judgment as to which might be better you can make rationale for both to Novo. If you forced me to pick one I would still go with CD 73 inhibition with the idea being that if you could block the formation of something versus have to reverse.
The actions of something that tends to be better, but that will play out over time, but I think by the time the.
Big take home message is by the time you see these three datasets combined I think it is going to read very positively on adenosine modulation is a mechanism that has a meaningful role, particularly in the context of immunogenic chemotherapy.
Standard of care, where there is headroom for improvement.
That's very helpful. Thank you.
Thank you.
Our next question comes from Jonathan Miller with Evercore ISI. Your line is open. Please go ahead.
Hi, guys. Thanks for taking the question I would love to ask about his two time to response and maybe some context about how or could evolve from here.
So youre talking about already reaching a similar level to light spark and hinting that you would expect it to be mature by mid year, but whats the gear expectation, what's the evolution from here to there how much more or would you expect to see in later scans.
And then relatedly.
Given.
Linear PK up to 100 milligrams in the escalation cohorts so far.
Do you expect that 50 milligrams could also show differentiation versus Mark could you put a little bit of that dose optimization in context for me as well.
Jonathan Great questions. So let me.
Start with the first one that gets a little bit to your kinetics. So that's all anecdotal.
To date, but let's let's first put a line in the sand.
<unk> five is roughly three eight months median time to response.
The way things are looking if you played around with the numbers it looks like at least at the outset that we're doing.
Perhaps better than that and we will see how that plays out and obviously that we'd see opportunity for deeper response.
Longer PFS.
As you know those really arent independent variables, so hitting the target harder at the outset.
Maybe driving kinetics that are known to be not particularly.
Although we have seen.
Couple of.
Later.
Patients.
Dramatic tumor reduction after multiple scan.
On your second question.
Even though we didn't say anything about it in the script and its even earlier, but I will tell you is the 15 milligram cohort, it's almost fully enrolled so that's going to be another 30 patient and honestly. If you just took a look in.
Not even all of the patients who've had a single scan yet but.
She looks.
Pretty good and.
The kinetics, that's where I would tell you on the first group of patients that have had scans and so I don't want to get.
As you know I could get ahead of the skis, because I tend to be pretty transparent with what we've.
Scene, but the first group of patients are seeing some pretty significant.
Reductions in so feeling optimistic both about the kinetics and we're looking hard at <unk> clearly.
More than pharmacologically relevant.
It does look like on the early early efficacy Readouts, that's playing out as we stated 20 milligrams was essentially giving the same effect as well.
The approved dose of bills at a fan on the PD marker and the 50 milligram dose.
Certainly if you didn't know any different than it was labeled 100 from what we've seen you would say it fits right in but.
That's.
Way too early to say, that's how it's going to play out.
Makes sense and then one more also on the escalation side of things, obviously, only a very few of those patients where RCC patients could you tell us about some of the other indications in that escalation set where you might have seen clinical activity.
Yeah. So.
It was a mix of tumor type.
And so it really wasn't anything extra protecting their all patients.
Multiple prior lines of therapy, we did have two patients with RCC cannot players now.
Non clear cell RCC and interestingly one of those patients.
They've had a nice response and it's still on treatment.
Any percent tumor reduction, but they've been on treatment for many many months and continues to be on treatment.
Thank you.
Okay.
Hello.
Okay makes sense. Thank you.
Thanks, Jonathan.
We now turn to Hugo not sure markets with Citigroup.
Your line is open. Please go ahead.
Yeah, Hi, Terry and team.
Did you say what the doses were for the two RCC patients that showed the.
Tumor reductions just short of 30%.
And then I have another question on phase three.
Once you once you go over I believe language.
And the other aspect that waning I.
I remember it correctly.
Yes, Ron it cut out of the four patients at all.
Covered but I think I think <unk> got that right definitely one was 100 and definitely the other one was either 20 or 50.
They are probably looking well.
And then D.
Thanks, Joe.
Sure.
Right.
Okay. Good and then you go at this point.
That's as far as what you would do for the phase III dose I mean, you finished the dose expansion for 100 milligram first it doesn't.
It doesn't mean that that's going to be the base case for phase three right. I mean, you could you could go with 50, you also said you haven't you're evaluating.
Higher dose up to 200, although I don't know what that is.
What's the base case for phase III, that's still TBD.
The base cases, one hunter.
And it really comes down to go unless we see something dramatic from.
You know any of the either of the other.
<unk>.
Which obviously are being done to support the.
We've got the optimal dose from our ultimately are.
Regulatory standpoint, we felt that if you look at the Merck data.
And you look at what they've achieved and you look at their waterfalls and you look at their kinetics that.
Once we've established that.
Five fold increase over matching the peripheral PD marker that we felt like it should be.
Hmm.
Maximizing the response in the tumor so as a practical call because you know oftentimes when you and it's unusual more unusual in cancer, but when you have a very safe drug at some point you say.
From a practical standpoint, it makes sense, but if we see something.
<unk>.
You know in these other expansion cohort that would cause you to feel like there was something different.
We would consider doing something alternatively, but right now we're on a trajectory to the 100 milligram dose.
The other thing Thats nice about safety profile is appearing very clean.
Yes.
Okay.
Clarify.
Thanks to our sponsors live with that.
Mike.
Okay got it.
And then you mentioned like spark or five a bunch of times, so obviously that was versus ever alignment. So.
For phase III, and I'm, assuming you'd want to go up against those who defend but I don't know is that is that the right assumption.
Yes.
Sure thing.
Once we describe exactly what we're doing so we're not going to be going into that same model therapy.
Setting so we will actually be going in a setting where they'll soon found wouldn't be the standard of care and we will go against the standard of care, then we'll sell a little bit more about that as the.
Year goes along with that was part of the strategy when we consider what would be the best places to go first.
Okay.
Alright understood. Thank you.
Thank you Jonathan Leichter with Goldman Sachs. Your line is open. Please go ahead.
Hey, Thanks. This is Matt on for Celgene, maybe just following up on that last question could you share any additional details at this point on the phase III design per accounts.
And then secondly, you cited the changing treatment paradigm in first line PD Lone high lung cancer away from Keytruda Mono is the reason for for discontinuing our tenants shifting to 121, but just curious if you could share any details on what data.
The shifting trend is based on and why you believe this is happening now.
Thanks for the two question two it's got no I'm going to walk and Chew gum at the same time since those are two different two different.
Programs, so what I'll comment as you.
You can think about.
RCC.
It's from a from a standpoint of.
Both.
Development the need ultimately commercialization.
It's there's multiple lines, where you can think of going and so we would probably move up.
A bit from where that third line population was and you can think about patients that have received.
Anti PD, one and or.
Teekay AI so.
You'd be you wouldn't have bells as standard of care, we feel like that's a great place.
To go.
So far sure.
June of about.
<unk>.
Our 10 and the strategy there so let.
Let me, let me give a couple of points on that so clearly like with many therapies and particularly in cancer.
It's one of those places where obviously there is a goldilocks.
Spot, but physicians do and patients tend to be more focused on efficacy and safety within a reasonable amount and I think as time goes along and physicians become.
Both more comfortable with the liabilities of the therapy, how to administer it as well as Ah.
Conviction about the real efficacy that's what's happened in a very continuous way.
And this high PD L. One population going from.
Anti PD, one alone and increasingly too.
Type PD, one plus chemo, particularly in a in a more healthy patient population or with a patient.
With a bulkier more rapidly.
Progressing tumor we think that's only going to be more enhanced particularly with a molecule like <unk>, which we're already seeing.
From a study for example, like edge gastric that essentially doesn't bring any additional side effect liability on top of anti PD one.
Plus chemo, so we think that that's going to further cannibalize.
That particular.
<unk> approach to treating the population so we do feel that star one to one.
Best addresses.
<unk> population with the best opportunity to become the standard of care.
For all covers what I'll also say from a biological standpoint, I think one of the important things as you move down the spectrum from.
Toxic agents, you know beta <unk> inhibitors to things that are very much understand the biology, what you really want to start thinking about is less.
The Oregon that Youre treating then the biology that you are treating.
And we do feel and the biology that supports anti <unk>.
A couple of things at the highest level C. D. $1 55 is a bad thing if you've got C D $1 55.
And with CD 155 is doing is it's keeping you from getting all of the mileage that you might otherwise out of anti PD, one because anti PD one relies on <unk> to 'twenty six.
To get its full efficacy and so when you have CD 155, engaging that CD 26, you are losing part of what you might otherwise game and Thats the whole rationale and now what's being borne out clinically behind anti <unk>.
And why we feel like the best place to go for anti <unk> is where you already know that anti PD, one works and that PDL one all comer.
Population with with Chemo is absolutely right down the middle of the fairway for where you want to go with a molecule like <unk>.
Helpful. Thank you.
Announcements you Robyn curnow cursed with trailing your line is open. Please go ahead.
Hi team Alright several question.
Thinking about the 200 milligram of cats.
Do you think there'll be a diminishing lynette.
If you actually would you think you can push the S&P up higher what are your thoughts on sugar milligram.
Second question is about how.
Yes.
Zantac.
And.
Third might be.
Thank you could leapfrog.
Cut arcade he did a different trial leapfrogged into frontline with <unk> line.
Is there a strategy there and how do you incorporate your elegant 801 into that process. There's a lot going on there, but maybe you can take that one.
So I mean, so the second question what was the advent of the question with 801 compound the NOI.
For <unk>, how is it differentiated from danske.
So only.
And could you incorporate that into your clinical trials right because you're getting all these cancer clinical trial.
The second question would be 200 milligram of <unk> like what do you think it's going to happen. There are you pushing Amit already do you think you'd get greater efficacy and third would be.
Could you leapfrog ahead, giving your phase <unk> trial and go into first line RCC.
Doug really good things in the past by cutting things off and like skipping ahead of other people.
You know given the knowledge you have.
To get like first line indication versus tractor indication okay.
Great. So I'll start with the 200 milligram and I'll be brief on that we do think that is probably <unk>.
Overdosing, but we want to see it because.
We will also give us some additional safety data.
Do go higher does does it do anything else on the other.
Other physiological.
Rules of <unk>, but we do think that the 100 milligram dose is really hitting.
The target hard enough, but we'll see what.
We learned from 150, org or 200 milligrams, one do you want to take the hit on one question, yes sure zones.
<unk>.
As well as Cabo is primarily a VEGF inhibitor.
And <unk> with the.
Both molecules with decreased potency, but.
The clinical activity.
It's really.
Generally accepted to be the result of VEGF inhibition.
The.
At 801, we believe is going to be a more surgically effective inhibitor of XO, but probably not the first thing you would reach four in the context of RCC, where the restaurant, we primarily to go after the EGF T K.
So the place where we see <unk> growing our things like.
No.
SDK 11 mutant non small cell lung cancer and by the way.
One since you asked about it multiple calls a bit we have.
<unk>.
<unk>, the healthy volunteer dosing PK profile and safety profile.
Really good. So this is in our minds the first molecule that hits the selectivity to really test the actual hypothesis. So we're very excited about that molecule.
Jim do you want to comment or Dmitry on the five to one leapfrogging into.
Frontline setting.
Yes.
Yeah.
Thank you Jay.
So we are considering all options and we could leapfrog into the first line, we can keep talking to the adjuvant setting.
But we really want to make sure we select the setting for the first Registrational trial.
There is a mix of different factors it has to have the data.
Let's say safety and who do you think or see data to support it.
Has to be a sweet spot when it comes to competitive timelines to Merck and.
Guests order considerations about timelines to lead out.
The first line trial is an interesting market opportunity, but for example, the bar in first line is higher than in second line. The time to read out is longer of course, your first and second line. So we are considering all the different options and we'll make a decision and communicate that in the near term future, but our first opportunity would be.
We pursue that.
It's a factor of a multi multiple sectors.
Greg Robbins.
Yeah.
Since you asked about that.
I would like.
Is the point of your question conceptually, though is really good 112.
<unk>.
It's going to end up being really important I think thats why Merck has started to call it out as blockbuster.
85% to one barring some weird unforeseen thing, it's a drug and so the real question is how do you fully exploit that in if.
If you if.
If you asked me about our portfolio, it's definitely something that.
As we aggressively move towards this first study.
We want to look at very hard.
How do you expand the footprint of the hip to welfare program, that's a really huge opportunity and we actually think because it's so hard to get a good molecule youre.
Youre not going to have any more can come in with a better molecule than us. So we feel we're going to end up better than bells and it's it's.
I'm not going to be commodity here.
And I like to think Dmitry for making me feel not so bad pronouncing all these names that was vans that works for me Cats works for me. Thank you very much appreciate.
Appreciate it my question absolutely.
As as calf not cash too.
What I've been told so we'll work on that very I'll work on that.
[laughter].
And I can't tell the difference.
We now turn to Diana Thank Bush with Leerink partners. Your line is open. Please go ahead.
Hi, guys. Thanks for the questions I have three on past getting into the PK P. J P T data.
On page 31, when you show the area under the curve.
We're calling this really talking about the value proposition for cash.
Expected a much higher absolute area under the curve, but what I see here with the 100 milligrams is pretty similar in range to the 120 <unk> hundred 40 milligrams for HSN.
If you can.
Talk to that.
That youre ending up in the same range and then on Pharmacodynamics you have two different pharmacodynamic Readouts here first is the percent IPOH change on page 30, and then the preset hemoglobin or the absolute change in mean hemoglobin on page 32.
Which of these PD Readouts do you believe is more correlated to what you expect in efficacy and if I look at the hemoglobin, you're sort of in range of Delta HSN.
And youre modestly higher it looks to be modestly higher percent Ito. So my final question is.
Much better efficacy do you expect to drive with season, similar to modest increases and Pharmacodynamic marker in space. It does seem to fan.
Thanks.
Thanks, Dennis so I'm going to tie it together, so I think the key point I'm going to define.
What's better PK and whats better PD. So PD as you know encompasses everything tissue penetration.
<unk> see differences pharmacokinetic differences, so the PD readout, what we're saying and we think this is the value proposition. No question is that at 20 milligrams of <unk> five to one you are getting the same horsepower and less.
Use IPOH as the.
Marker that you get out of the approved and used dose of both sudafed.
Now the PK advantage has nothing to do with an AUC relative to Bell sudafed. The PK advantage is that when we go to fivefold higher doses than the dose that gives you that equivalent.
Activity on the PD marker, we get fivefold higher exposures. So if there was more water to be squeezed out of the activity stone.
Hitting that with five fold the equivalent TD dose.
Bella Xena fan so that advanced the value propositions of PK advantage is that you can go higher from that maximal effect with respect to hemoglobin or.
<unk> Epo, we don't look into either of those per se is something thats predictive of more or less predictive of the.
Activity in the tumor setting.
Got it can I state it back so you're hitting at Phi fall more dose than what gets you to the Pharmacodynamic marker and you believe that will give you a much better efficacy, even though neither of these pharmacodynamic markers of fivefold greater dose really had that much more effect than the others.
Sure.
That is correct, but not only is it correct.
What's predicted and that's what that's the difference between the physical and logical.
Maximal hips do you as you know <unk> a transcription factor so regulates 100 things its effect on April <unk>.
The thing to do with what's going on in the tumor so we know going in that.
Basically youre going to Max out.
Two in the or.
<unk> inhibition and so that just becomes a marker for how hard are you hitting this.
This thing and then the fact that we can go five X.
<unk>.
What you can get out of the Merck molecule is what makes us feel good about hitting the tumor harder.
That's very helpful. Thank you.
Thanks, Dan.
We now turn to Lee Whatsapp with Cantor Fitzgerald. Your line is open. Please go ahead.
Hi, this is rosemary.
Thank you so much for taking our questions.
So to start with a curve that is fine.
Do you happen to see any dose response, when it comes to toxicity and safety profile and do you have concerns for greater satisfaction. When you go above 100 milligrams.
And then one question on your ticket programs.
Okay.
Okay go ahead.
No go ahead you finisher.
Questions.
Okay.
So the question for kids yet.
So you said you plan to show some data from our 10 trial, which was discontinued and so do you have any color on when this could be and what kind of data, we would expect and what it potentially impact any thinking around the trials that you still have going on thank you.
Thanks, So the.
<unk> response to.
To be clear the 20 milligram dose that we.
You know used has our lowest dose is already pharmacologically relevant as we noted youre seeing.
Essentially a maximal effect on equal suppression at that point, So I would just say with.
Three patients on each of the doses with six on the 50.
We wouldn't say that we see any more.
Meaningful differences, nor do we expect that.
Similarly, because of what we know and this was gets back to how I was answering dana's question.
Hi.
Either feedback mechanisms or other non hip two mediated.
With that.
That April is produced and so you hit this maximal effect.
That endpoint, which to date has been the primary.
The effect is very manageable. So that is the anemia, that's a correlate of debt equal suppression and basically that's been very manageable. So at this point, we don't have any expectations that going higher will induce any more of a liability and we certainly havent seen it if the 100 mill.
Sure Gram dose the other place where we're keeping a close eye is in fact, an hypoxia.
It has to do with <unk> two inhibition in the lung against that May also be something thats Max throughout its normal physiology, it's something that we're paying attention to some of these things may also be.
Dependent on individual patients, particularly when you think about equal if there are patients with that have you know.
Compromised.
Kidney function, but to date we have.
Haven't seen anything of concern and we'll just see what happens when we go to a higher dose and certainly those initial 30 patients nothing that we've seen to date has.
Cause us concern and to make the point, we have not yet seen.
DLT on the anti <unk> are 10 data that's just something we're considering we haven't made a decision on that but if we did do that the idea would be that we would do a cut of the data and are cleaning up the data when we with us.
<unk>.
Extrapolate that we would have mature PFS minimally and at this point with the data that we have in hand from our other studies it wouldn't affect any of the studies that were it would not be decision making data.
Yes, good question Terry.
Yeah.
Ladies and gentlemen, this concludes our Q&A on today's conference call, we'd like to thank you for your participation you may now disconnect your lines.
[music].
Yeah.