Q1 2024 Arcus Biosciences Inc Earnings Call
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Speaker Change: Hello, and welcome to all cause Biosciences first quarter 'twenty 'twenty four and April.
Lydia: My name is Lydia and there'll be a J.
Lydia: If you'd like to ask a question during the Q&A you can do so by pressing star followed by one on your kind of thing keypad.
Thea: I'll now hand, you I bet, you Thea, each vice president of Investor Relations and strategy.
Speaker Change: Hello, everyone and thank you for joining us on today's conference call to discuss Arca Foods first quarter 2024 financial results and pipeline updates I'd like to remind you that on this call management will make forward looking statements, including statements about our cash runway and our expected critical development milestones and timelines.
Speaker Change: All statements other than historical facts 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, and quarterly report on Form 10-Q, which have been filed with the SEC. We strongly encourage you to read.
Speaker Change: Our filings today, you'll hear from our CEO, Terry Rosen C O O Jennifer that Jarrett and CFO, Bob <unk> will also be joined birth by our CMO Dmitry now 10 and projects on high end for questions. After the prepared remarks for ease of listening, we will be referring to abbreviations of our molecule name.
Speaker Change: Don Vanilla not as job Cinderella Mad at them.
Terry Rosen: Got it that is katz from leases that as cleanly and its extra amount of that as a trend that during today's call. We'll refer to slides in our corporate deck, which can be found on the investors section of our website with that I'll turn the call over to our CEO Terry resin.
Terry resin: Very much.
Terry resin: Thanks to all of you on the call and listening in today.
Terry resin: As you know 2024 shaping up to be an incredibly catalyst rich year for ARCUS.
Terry resin: By the end of this year, we will have data to support all four of our later stage clinical programs.
Terry resin: <unk> been in lung and upper Gi cancers.
Speaker Change: And in clear cell RCC, when we in pancreatic cancer.
Speaker Change: <unk> colorectal cancer will spend most of our quota setting the stage for these upcoming data events with over $1 billion of cash on hand runway into 2027.
Turner: Turner shifts Gilead astrazeneca tie whole others, along with a very diversified pipeline, we're extremely well positioned to capitalize on these datasets and advance our potential first thing also best of class treatments towards approval and commercialization quick.
Turner: Quickly and efficiently.
Turner: Let me start with the ESCO.
Speaker Change: Asthma is less than a month away. So we're almost there.
Turner Gilead: We're thrilled and honored to have two oral presentations.
Speaker Change: Both of which will provide strong support for our efforts and programs and the Gi cancer field.
Speaker Change: Accordingly, both datasets are in settings, where there's limited competition and huge unmet need these are genuine opportunities to make a meaningful difference for patients. So first off on Saturday June one we will have updated data from cohort one of the phase III edge gastric study evaluate.
Vince: Dauntless, Vince looks chemo in first line gastric cancer.
Don Vanilla: As Youre aware <unk> is the only FC silent anti <unk> antibody in late stage clinical development and we believe that the data presented to date indicate that Don made potentially improved safety profile when combined with chemotherapy relative to that of the FC enabled anti <unk> antibodies when they are combined with <unk>.
Don Vanilla: Therapy.
Don Vanilla: As a reminder, we presented initial data from this cohort of edge gastric the ESCO virtual plenary session in November of last year.
Speaker Change: Yes time median PFS was immature however, we did present mature landmarks six month PFS numbers, which you can see on slide 16 of our corporate deck.
Speaker Change: What you can see is the six month landmark PFS was 77% for the overall population and 93% for the PDL one high population.
Speaker Change: So given that the median PFS for standard of care in the city ranges from seven to eight months.
Speaker Change: These data were obviously very very encouraging.
Speaker Change: At <unk>, we're very excited to be presenting mature median PFS data.
Speaker Change: Expect the updated data will further support the potential for Donaldson to provide clinically meaningful benefit relative to the standard of care in gastric cancer.
Donaldson: Importantly, <unk> gastric evaluated the same setting similar patient population is our ongoing phase III study start two to one. So therefore, we expect these data to foreshadow.
Speaker Change: What we're our confidence in our start to two one study.
Speaker Change: And that context enrollment and start to two one is expected to complete by mid year.
Speaker Change: The incredibly rapid enrollment of the study is indicative of the lack of competition in gastric cancer market.
Speaker Change: And the immense need for new therapeutic options, particularly with overall survival in this patient population ranging from only 13% to 14 months and studies with anti PD one antibodies in chemotherapy. We also felt that we actually achieved some tailwind with our data presentation at the end of.
Speaker Change: Last year, so putting this all together you can infer that there is a line of sight to data and the <unk>.
Speaker Change: Then we will have a very substantial head start over potential competitors. Given there are no other anti <unk> antibodies in phase III development for the say so we think we're going to have a clear first to market advantage. This creates an exciting opportunity for us to be first in this setting with.
Speaker Change: With an addressable patient population of over 25000 patients in the U S alone and 100000 patients in the G. Seven countries. So this equates to a potential worldwide market of over $3 billion.
Speaker Change: Now moving on to our second presentation at <unk>.
Speaker Change: On Sunday June 2nd we'll be presenting data from our arc nine study in third line colorectal cancer. This will be the first presentation of the study.
unknown: It won't be from cohort B, which is evaluating <unk> in combination with Zim full Fox bet.
Speaker Change: Regular effort one of the standard of care treatments for third line colorectal cancer.
Speaker Change: On slide 41 of our corporate deck, you can see the study design and the key inclusion criteria for this portion of the study.
Speaker Change: Patients in this cohort must have received bad unless contra indicated.
Speaker Change: <unk> sale of platinum based regimen and in our renal <unk> based regimen.
Speaker Change: The current standard of care therapies first and second line CRC.
Speaker Change: 105 patients were enrolled who are randomized two to one between the trauma arm and the regular revenue environment. So this is a relatively large dataset.
unknown: <unk> also includes two additional randomized cohorts, which evaluated keytruda plus <unk>, plus full Fox and bad versus full Fox and Bev in second line colorectal cancer. These data are not yet mature and will be presented at a later time second line setting as you know has a substantially longer.
ESCO: The ESCO presentation will include mature PFS and OS data with a median follow up of over 20 months and our data will include patients with and without liver Mets. This is important since patients with liver Mets tend to have a poor prognosis and theyre not always included in late line CRC.
ESCO: T trials.
Speaker Change: Many of you know there are very limited options in third line plus colorectal cancer patients are typically treated with regular revenue.
Speaker Change: More recently with the combination of lobster from that based on the sunlight study, which showed a PFS of five six months and OS of $10 eight months in third line patient population.
Speaker Change: While acknowledging the limitations of cross trial comparisons, but we all do it based on our data.
Speaker Change: Let me share with you next month.
Speaker Change: <unk> combination regimen may represent a very substantial improvement over current options for patients in the third line setting.
I: I also want to point out a small dataset of 35 patients that was just presented in a poster at ACR, which actually captured quite a bit of interest.
Speaker Change: Further supports our hypothesis that adenosine blockade enhances the immune activating benefits of chemotherapy.
Speaker Change: These data were from the Morpheus Pdx study randomized phase <unk> two trial operationalized by Roche that evaluated our molecule <unk> plus roche's anti PD lone <unk> zoning chemotherapy versus chemotherapy alone in first line metastatic pancreatic cancer.
Roche: You've highlighted the design on slide 37 on slide 38, we've shown the spider plots for both the control arm and the trauma based regimen, which showed durable responses in this trial the trauma containing arm demonstrated a meaningful improvement in both PFS and OS and we've shown these data on slide 13.
Speaker Change: Nine and 40 of the corporate debt.
Speaker Change: Specifically the PFS hazard ratio was <unk> four eight and the OS hazard ratio was <unk> 67, with the <unk> based regimen, yielding an absolute improvement in median over survival of $4 four months over chemotherapy alone.
Speaker Change: Median OS for the <unk> containing arm with 16 five months.
Speaker Change: Similar to what we saw in our gate.
Speaker Change: Before we leave a trauma I want to highlight that now with the arc nine data presentation. We will have three data sets presented in a very short period of time for our two molecules that inhibit the ATP adenosine pathway accordingly any trauma.
Arc nine: Between our gate, which evaluated <unk> in combination with chemotherapy in first line pancreatic cancer.
Morpheus PD: Morpheus PD.
Morpheus PD: Very similar which evaluated E <unk> with chemo in first line pancreatic cancer.
Morpheus PD: Now our benign we have three independent, but similar datasets, which together provide compelling evidence demonstrating that mitigating the immunosuppressive action of adenosine combined with immunogenic chemotherapy may peripheral long survival relative to bet associate.
Speaker Change: With chemotherapy alone for those of you who've been following us for a long time keep.
Speaker Change: Keep in mind. This was the original hypothesis, what drove us to the adenosine access in the first place. So we're getting to the point, where the data are matching the hypothesis importantly towards these studies showed meaningful improvement in the west versus the standard of care control and all three showed.
Speaker Change: Abstention improvement above historical benchmarks when adenosine blockade was combined with immunogenic chemotherapy.
Speaker Change: Although we've covered with what we'll be sharing at <unk> I'd like to turn it over to Jen to discuss expectations for our hip to it Alpha inhibitor program.
Jen: For this year.
Jen: Thanks, Terry I'll now turn to our data events for the second half of 2024, and specifically for cat are hit too often.
Jen: Which we are developing in clear cell renal cell carcinoma RCC RCC.
Jen: As a reminder history.
Jen: Validated mechanism with Davita.
Speaker Change: Recently, a <unk> monotherapy for baseline clear cell RCC patients.
Pat: Pat PK and PD.
Speaker Change: Which should enable us to hit the target partner with the goal of achieving greater clinical efficacy than that.
Speaker Change: You talked about on our last earnings call there are multiple opportunities to improve upon the profile of buildings.
Speaker Change: And lower rate of primary progressive disease.
Speaker Change: Overall response rate and more prolonged responses.
Speaker Change: Any of which could translate into a higher PFS and ultimately longer.
Speaker Change: Our cash relative to that.
Speaker Change: Our phase <unk> study for cats are 'twenty now has enrolled over 80 patients at.
Speaker Change: It was designed to answer numerous questions. So I want to spend a minute describing the various components of this multi cohort study, which is summarized on slide 27.
Speaker Change: Jack.
Jack: First from the dose escalation.
Jack: As of our last earnings call in February we had completed enrollment of the 20, Meg 50, Meg 100, Meg dose cohorts with no dose limiting toxicities observed.
Jack: We have now completed enrollment of the 150, Meg Cowboy and again, we did not observe any DLT and we just cleared that debt.
Meg Cowboy: Additionally, we continue to see linear dose proportional PK for task.
Meg Cowboy: At the 150 my guess the dose expansion portion of our 'twenty was designed to serve a few purposes first and foremost to generate data for our proposed phase III dose of 100 Mega cap. These data will be used to support initiation of our first phase III study, which is an event.
Meg Cowboy: Yeah.
Speaker Change: The monotherapy dose expansion portion is enrolling patients that have received.
Speaker Change: Prior anti PD, one therapy and at least one GTI.
Hunter: And the Hunter make dose cohort approximately one third of patients had received four or more prior lines of therapy.
Speaker Change: These patients were relatively advanced.
Speaker Change: On our last earnings call, we disclosed that while the majority of patients in this cohort had only received one or two scans. We were already seeing response rates, including responses pending confirmation in line with Vice Barco side. Thanks.
Speaker Change: Our study for Delta this year.
Speaker Change: We also mentioned that we enter into a lower rate or primary progressive disease or the percentage of patients that progressed prior to their first scan that was reported for wind farm.
Speaker Change: Hi.
Clinician: This is important because when we witness in the lifestyle five dataset as we've heard consistently from clinicians is the high rate of primary progressive disease, bringing this breakdown should result in more patients benefiting from treatment.
Clinician: Long PFS and survival.
Speaker Change: We are very excited to present detailed data from this cohort at a medical conference in the second half of this year.
Speaker Change: We also designed the dose expansion portion to satisfy the dose optimization work required for regulatory submission.
Speaker Change: Typically we included two additional monotherapy cohorts in our 'twenty, which are evaluating <unk> in a country like that.
Speaker Change: We have now completed enrollment of the <unk> cohort and we just initiated enrollment of the 100.
Project Optimus: So in addition to enabling us to complete the dose optimization work required for project Optimus. These.
Speaker Change: These cohorts will also generate a lot of additional data that will further elucidate the clinical profile of cats.
Speaker Change: In addition to the three monotherapy expansion cohorts for 'twenty.
Speaker Change: About to initiate enrollment of a cohort to evaluate <unk> in combination with Cabo the most commonly used PKI in clear cell RCC Dave.
Speaker Change: Data generated from this cohort in addition to the data generated from stellar Oh nine our phase III study being operationalized by X Alexis.
X Alexis: We will be used to support the planned initiation of at least one phase III study for <unk> in combination with the T. G I.
X Alexis: Do you have any enthusiasm for cats and the rapid enrollment for 'twenty, we expect our 100 Meg dose expansion cohort data presentation. Later this year to be followed quickly by data from the various cohorts.
Speaker Change: We are aggressively advancing <unk> towards the initiation of our first phase III trial early next year.
Speaker Change: Importantly, we are taking a strategic approach to our development plan to maximize the value of what we believe is best in class hits, you often hear there or.
Speaker Change: For example, the stellar O&M study is evaluating tasks with a next generation and potentially best in class AI.
Speaker Change: I'll take that.
Stefan: We believe Stefan stanza and Cabo could have advantages of our Belgian advanced Teekay I partner them back.
Speaker Change: With a better tolerated AE profile.
Stefan: And therefore, we expect our cash <unk> combination can be differentiated from both an efficacy.
Stefan stanza: And safety and Tolerability perspective relative to those that are fine with that.
Stefan stanza: I'd like to end by spending a few moments on the RCC market of which approximately 80% of patients eight zero percent of patients of the clear cell histology.
Speaker Change: The annual addressable patient population for first line clear cell RCC inclusive of our 12000 incident patients in the U S and approximately 30000 LNG seven countries.
Speaker Change: Around two thirds of these patients progressing on a first line treatment in our addressable in a second line, resulting in more than 8000 patients in the U S and approximately 20000.
Speaker Change: G seven countries.
CCA RCC: The CCA RCC Pacific RCC market is fragmented.
Speaker Change: <unk> is the most frequently used T G I.
Speaker Change: <unk> sales in 2023, and the U S alone for over $1 6 billion.
Speaker Change: It almost entirely by RCC and with only one quarter of market share in first line and under 50% market share in the second line setting.
unknown: In terms of the treatment paradigm for first line RCC.
Speaker Change: <unk> are typically treated with anti PD, one plus a <unk> or a combination of Napoleon that plus and tell them about.
Speaker Change: When patients experienced tumor progression on frontline therapy, they cycled through different teekay is frequently for a few years or more.
Speaker Change: With few options beyond <unk>.
Speaker Change #101: <unk> community has been eagerly waiting for the introduction of has to offer inhibitors.
Speaker Change #103: Securely given a relatively benign safety profile relative to <unk>.
Speaker Change #100: And so not surprisingly.
Speaker Change: <unk> phase III data for both of us.
Speaker Change: Resulting in an immediate and steep inflection and script trajectory.
Speaker Change #104: Monthly scripts or not twofold since topline data for valves in clear cell RCC was released in August 2023.
Speaker Change #108: 50% in just the first four months after approval.
Speaker Change: Approval in this setting.
Speaker Change #105: Based on just March scripts.
Speaker Change: He is now in approximately $400 million run rate in the U S alone and growing.
Speaker Change #107: As we've discussed we believe that Caf may improve clinical outcomes relative to bump it up again.
Speaker Change: We plan on developing cast a differentiated combination.
Speaker Change #102: All of which support <unk>.
Speaker Change #109: Meaningful market opportunity for cash, which we believe is north of $2 billion.
Bob: Before we conclude I'll now turn the call over to Bob to review our quarterly financials.
Bob: Thanks, Jen <unk>.
Bob Smith: <unk> continues to be in a strong financial position our cash as of March 31, 2024 was $1 $1 billion as.
Bob: Third to $866 million as of December 31, 2023.
Bob Smith: Turning to our P&L, we recognized GAAP revenue for the first quarter of $145 million, which compares to $31 million in the fourth quarter of 2023.
Speaker Change: Our revenue is primarily driven by our collaboration with Gilead and Tyco and in the first quarter included a cumulative catch up of $107 million, resulting from the Gilead Amendment, we executed in January.
Speaker Change: We expect to recognize GAAP revenue of approximately $30 million per quarter for the remainder of 2024.
Speaker Change #111: Our R&D expenses for the first quarter, our stated net of reimbursements from Gilead and were $109 million as compared to $9 $93 million in the fourth quarter of 2023.
Speaker Change #111: In the first quarter noncash stock compensation represented $10 million of R&D expenses.
Speaker Change #113: The increase in the first quarter was related to higher clinical and manufacturing clinical trial and head count related costs associated with our late stage programs.
Speaker Change #117: 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.
Speaker Change #114: G&A expenses were $32 million for the first quarter compared to $29 million in the fourth quarter of 2023 noncash stock compensation represented $10 million of our G&A expenses for the first quarter and we expect G&A to remain stable for 2024.
Speaker Change #114: Total operating expenses in the first quarter were impacted by a $20 million noncash impairment charge, resulting from the intended sublease of a portion of our office space.
Speaker Change #116: Finally, we continue to expect our cash balance at the end of 2024 to be between 870 $920 million and to fund operations into 2027.
Speaker Change #114: This guidance includes a $100 million partnership continuation payments from Gilead in the third quarter and excludes potential opt in payments and approval milestones from our partners for.
Speaker Change #114: For more details regarding our financial results. Please refer to our earnings release from earlier today, and our 10-Q I'll now turn it back over to Terry for concluding remarks. Thanks, Bob.
Speaker Change #114: As you've heard from US today, we are genuinely add significant inflection.
Speaker Change: Marcus.
Speaker Change: Completion of enrollment of start to two one in first line gastric cancer expected by mid year.
Terry: Our attention to our first phase III readout.
Bob Smith: Behind this we will have phase III data from our second Registrational study for them than star one to one in first line non small cell lung cancer with enrollment for this trial are also expected to complete this year.
Speaker Change #112: In addition, we'll be starting at least two additional phase III trials by early next year for Caf in clear cell RCC and <unk> in first line pancreatic cancer as.
Speaker Change #120: And as we talked about today, we have several important near term datasets, which may provide further validation and meaningful derisking of several of our programs. This will all kick off shortly at <unk> with two oral presentations for <unk> and together they will showcase our emerging Gi cancer franchise.
Speaker Change #118: And we're of course looking forward to sharing much more on our hip to Alpha program. Later this year from the dose expansion cohorts of <unk> 'twenty.
Speaker Change #115: I wanted to highlight how unusual is for an early stage company be executing multiple phase III studies for several different molecules, all targeting massive opportunities and doing so in parallel this.
Speaker Change #115: This is obviously all enabled by our current cash position and our partners that include Gilead Astrazeneca <unk> and Tyco. These partnerships have and will continue to provide the combination of development funding through the receipt of opt in fees milestones and cost sharing to reduce our overall development expenses.
Speaker Change #115: I want to conclude by thanking all of you for your continued non growing support of ARCUS and our mission to bring innovative therapies to patients in need we will now open the call for questions.
Speaker Change #115: Thank you. Please press star followed by the number one if you'd like to ask a question and answer all your devices on mute likely when it's your attention.
Speaker Change #115: Our first question comes from Cadbury Pullman of BTG. Your line is open. Please go ahead.
Cadbury Pullman: Yes, good evening, Thanks for taking my question.
Speaker Change #115: Sure.
Speaker Change #115: Awesome.
Speaker Change #115: The literature suggests that shifts to all size of screen, let jobs.
Cadbury Pullman: Production there.
Speaker Change #121: The same pathway, you think could mix Campbell responsive patients more sensitive to two one and because of the same biology.
Speaker Change #115: Question.
Speaker Change #115: Overlapping toxicity with <unk>, which is the Joseph Roger.
Joseph Roger: Yes so.
Joseph Roger: They are in the same pathway, we do believe that hits two on the other hand, though since the controls probably 100 genes. There are other effects ongoing in cancer, we don't.
Joseph Roger: Not really expect that in fact, we know what the.
Joseph Roger: The side effect in AE profiles are so we do not expect that you would see overlapping toxicities and I would just say that would hit two well.
builds: Those toxicities and Aes, if already been well defined by builds due to fan.
Speaker Change #127: What you primarily see is very manageable anemia.
Speaker Change #124: We've seen similar and even though we believe no. One fact that we're hitting the target harder.
Nature: Essentially natures built in a break because only so much gift too.
Speaker Change #124: Mediated equal.
Speaker Change #125: Depression is happening in the kidney and there is other.
Speaker Change #115: Other sources of.
Speaker Change #129: Of equal and we've seen this a safety profile that continues to look.
Jen: Very similar to what has been reported for <unk> defense. This is Jen noted we've actually even completed 150 milligram cohort that again, if you have not seen any dlp's to date.
Jen: Got it that's helpful. And then maybe a quick one regarding star one to 112 for first line non small cell lung cancer.
Jen: Primary endpoints of PFS and OS do you have to win on both and what are the expectations from the army.
Jen: How much variation from the control arm.
Speaker Change #133: And our ticket arm is acceptable.
Speaker Change #133: Yes.
Richard: Richard do you want to handle that question.
Richard: Sure Terry.
Richard: So.
Richard: The first question is relatively simple so.
Terry: Statistically speaking the way you've set up its a dual primary end point, meaning that either PFS or OS if either one of those is statistically significant it would be a positive trial.
Terry: I think we've been very clear in previous calls as well.
Terry: I mean lots of interactions.
Terry: That are in the public domain that from a regulatory perspective, OAS as really the registrational endpoint PFS is supportive.
Terry: And your second question can you repeat it please I didn't get the entire question.
Jen: Sure.
Speaker Change #138: Just wanted to get some so the PFS Nols are really comparing on the NBC is I believe keytruda combination, but there isn't.
Speaker Change #128: And then I was just wondering how much variation from that.
Speaker Change #140: You know control Keytruda arm market is acceptable.
Speaker Change #128: Yeah. That's a that's a hard question as the FDA will say its a review issue that arm.
Speaker Change #128: I think it's clear from the data.
FDA: The other day maintenance afford to afford a 401 randomization. So a very limited number of patients is going on to zoom in chemotherapy to establish contribution of components.
FDA: Based on FDA guidance I can share that contribution of components, mostly is established by looking at the response rate.
FDA guidance: And of course in a randomized fashion a time to event endpoints could also be assessed.
Speaker Change #142: There is no absolute guidance on what the variability can be.
FDA guidance: So the fuel issue I can summarize I am very confident with the data we've generated foreseeing that a positive trial, meaning that domain same combined with chemotherapy clearly beat keytruda.
FDA: The contribution of components.
I: Let's say discussion is a modest part of the discussion and I'm confident that we will be able to achieve that successfully with the study design.
I: That's very helpful and thanks for taking my question.
Speaker Change #137: Thank you <unk>.
I: The next question comes from Peter Lawson of Barclays.
Peter Lawson: Your line is open.
Peter Lawson: Great. Thanks, so much thanks for taking the question just around <unk> two alpha.
Peter Lawson: For the second half data.
Peter Lawson: Well, what the funds success for you for that.
Peter Lawson: Data set and could you remind us what gilead.
Speaker Change #136: The trigger points are for gilead to potentially update thank you.
Speaker Change #136: Yeah.
Peter Lawson: Sure. Thanks, Peter So on what defines success as we've articulated there's a number of variables.
Peter: And opportunities for differentiation from those who defend so starting with response rate right of primary progression.
Peter: The depth of response.
Peter Lawson: Even if we're.
Peter: If we have PFS by that point.
Speaker Change #141: We wanted to do better than those who defend our mind you in thinking about our overall program go based upon what we've already seen.
Jan: The data look good and we're full speed ahead to Registrational trial and keep in mind that we are not going to be developing this at least in the near term as a monotherapy and we also believe as Jan was discussing that will be combining with the better PKI.
Jan Smith: Then with that and if so that'll give us another opportunity for differentiation. So there is multiple places.
Speaker Change #144: When we think that we have an opportunity to beat those.
Jan Smith: On more than one of those in terms of the gilead opt in.
Speaker Change #149: Thats something that we would expect.
Jan Smith: Converged on what would define that opt in and we would expect a decision either towards the end of this year or early into next year.
Speaker Change #149: Great. Thanks, so much.
Speaker Change #149: Yes.
Michael <unk>: The next question comes from Michael <unk> of Citi.
Michael <unk>: Please go ahead.
Speaker Change #151: Hi, guys. This is al Mubarak al Thanks for taking my questions.
Speaker Change #147: A few on the edge the Asquith update I'd ask though and obviously based on the data you've already shared it looks like the top of milestones on PFS or all of them.
Speaker Change #155: <unk> go well beyond the seven to eight months hurdle I think decided.
Speaker Change #153: That's really where the small so I'm just curious how much greater PFS benefit really needs to be to Derisk Star 221.
Speaker Change #145: Most of your other quick question I guess, how long do you think PFS correlates with OS benefit.
Speaker Change #145: On the southern given.
Speaker Change #157: The primary end point and start to Q1.
Speaker Change #157: So thanks for the question.
Speaker Change #150: You are right on the sample size and I think.
Speaker Change #160: Youll be able to make your own call on that as you suggested.
Speaker Change #145: And actually.
Speaker Change #145: Right.
Speaker Change #152: Pretty tight so you know in addition to checkmate 649.
Speaker Change #163: There's been two other Registrational studies with anti PD one.
Speaker Change #166: Chemo with both come in in that roughly just under seven eight months PFS. So that's a pretty firm number we think our data will be quite meaningful I think one other thing to keep in mind when you.
Speaker Change #145: When you.
Speaker Change #167: Here, our datasets interestingly enough Checkmate 649 had 60 40 high PD L. One the low PDL, one and were actually $46. So pretty substantial difference then.
Speaker Change #145: As you saw even our numbers in the <unk>.
Speaker Change #168: All comer population look pretty good so we're three weeks away.
Speaker Change #159: We're excited about the data you'll make your own call.
Speaker Change #161: How much do you think.
Cost Book: De risked say interestingly enough as we also mentioned we're on the cost book that Registrational study.
Speaker Change #173: Being completed so.
Cost Book: You'll you'll see those data in a couple of weeks in terms of the correlation.
Speaker Change #156: As you know in general.
Speaker Change #158: PFS and OS, particularly in the context of immunotherapy are certainly qualitatively correlate.
Speaker Change #158: But I wouldn't necessarily think that you can plug aligned for them, but given our dataset I think.
Speaker Change #158: You'll clearly be able to.
Speaker Change #154: Form some speculation as to what might have been on the OS just like you formed some speculation.
Speaker Change #154: The six months.
Speaker Change #165: Landmark numbers, what might happen I think those thoughts are going to connect at least qualitatively in a direction that will be confidence enhancing and if you look at the checkmate 649 dataset.
Speaker Change #179: You could say that that PFS and OS benefit was pretty similar.
Speaker Change #165: Larry Thank.
Speaker Change #165: If you look at the hazard ratios.
Larry: Yes at least one data point that I think says that that correlation to be pretty strong between PFS and OS.
Larry: And this disease.
Speaker Change #169: Got it but if I had one more quick follow up I'm wrong, but I think you said the data stuff with data.
Speaker Change #175: Well only be from cohort one so I'm curious.
Speaker Change #164: Where things stand with the other cohorts, especially cohort <unk>, which is a plus.
Speaker Change #170: For smallpox.
Speaker Change #171: And obviously that will be important to helping understand the contribution of <unk>.
Speaker Change #176: With that cohort bearish in the seven to eight month number you're talking about so.
Speaker Change #177: I'm, just curious where things stand there.
Speaker Change #177: Sure so that cohort actually.
Speaker Change #177: Enrolled sequentially.
Speaker Change #164: So the first one so.
Speaker Change #164: The final patient actually just.
Speaker Change #172: Was enrolled a few weeks ago keep in mind, not only was it sequential but since it's essentially a single arm study. The fact that you don't have an experimental arm is another thing that probably slowed its enrollment so it's probably trending a year.
Speaker Change #181: Behind the initial cohort I'll also mention that as you.
Speaker Change #181: You've probably seen.
Speaker Change #178: Clinical trials Gov.
Speaker Change #183: Two additional arms.
Speaker Change #178: Probably more designed to take on the contribution of components that will be run in a randomized fashion.
Speaker Change #180: With a larger and the other thing that may be important about that cohort that you just referenced that we recognize it's a it's another opportunity, albeit a single arm non randomized data set.
Speaker Change #188: Give people another look at how Zim chemo compares to historical numbers for other anti PD ones, such as Keytruda or Knievel chemo. So.
Speaker Change #184: It will be an interesting data set as well, but it's at least a year behind.
Speaker Change #184: This cohort.
Speaker Change #184: Got it thank you very much.
Speaker Change #178: Thank you.
Speaker Change #178: Our next question comes from Jonathan Miller with Evercore ISI your.
Jonathan Miller: Your line is open.
Jonathan Miller: Alright, Thanks, guys a couple of hits two for me.
Jonathan Miller: Obviously, we're very excited to see the 100 milligram cohort release and get a better sense for you to efficacy here versus the competitor, but I'm wondering why it was.
Jonathan Miller: Specifically, the 50 milligram cohort isn't going to be part of that same release that was enrolled 400 milligrams no. So I understand 150, just got finished but why not include 50 in your end of year release.
Jonathan Miller: Okay.
Jonathan Miller: This quarter as well as last quarter.
Jonathan Miller: Already.
Jonathan Miller: Sure.
Jonathan Miller: Sure sure.
Speaker Change #187: To answer that because what you said.
Speaker Change #189: Your brain is younger and faster than mine. So I'll forget the first question. So let me just answer the first one and I'll take your second question. So the 50 milligram cohort was actually enrolled after the.
Speaker Change #193: The 100 milligram cohort and there was basically we added both 50 and then we wanted to go with the higher in the context of optimist. So the 50 milligram cohort just very recently.
Speaker Change #185: It was fully enrolled and in fact.
Speaker Change #194: It won't be part of the.
Speaker Change #191: <unk> Medical conference presentation, because clearly it will be.
Speaker Change #186: Mature, but whatever we know about it you'll be able to get that out of me without much.
Speaker Change #196: So we'll share whatever we know about it and in fact, when we first saw the very earliest data even when only 15 patients or so have been scanned. The data were looking interesting and to your point, it's actually even though it's 50 milligrams, that's two and a half the PD equivalent.
Merck: The Merck <unk> clinical dose the 150 milligram cohort is just starting as you noted so 50 came after 100.
Merck: Okay. It makes sense.
Merck: Last quarter and this quarter, both you highlighted that or are at the 100 milligram dose I assume is already similar to those you defend the implication there being that given those new defense time to response.
Merck: It could in fact deepen that as you get more scans under your belt. So in the intervening three months have you seen or our increase I noticed that in both this quarter and last quarter using similar language, saying that youre youre hearing similar levels to those units and they know that.
Merck: Presumably more scans on these patients do you see those late responses, especially the later responses more akin to W. Defense time to response.
Speaker Change #195: Yes. So if we were using the same language. It was because we were reiterating what we said.
Merck: At the end of the.
Merck: Yes.
Merck: When we gave the last update as opposed to like fresh description. So all we would comment as the data continue to look good on a longer trajectory of what we were seeing then and we have no plans to give updates until the medical conference and then Youll see.
Merck: See before.
Merck: The full picture.
Merck: Alright fair enough.
Merck: Yeah.
Merck: Okay.
Speaker Change #192: And you're right. This is a mechanism where the response kinetics on the slower side.
Speaker Change #199: And the average time to response was about four months and.
Speaker Change #201: I would like to work Saturday. So similarly, some of my responses may take more time.
Speaker Change #199: Okay makes sense.
Speaker Change #198: And then lastly, just as we think about the two different teekay is that you're exploring combinations here.
Speaker Change #197: Can you give us a little bit of color about what you are looking forward to pick between them and you've highlighted the importance of safety versus when veeva as a driver here. So are there clear knogo signals that would push you one way versus the other or is it something else that you're really looking at.
Speaker Change #197: Yeah, So I would say it's.
Speaker Change #197: It's more strategic.
Speaker Change #197: Timing and.
Speaker Change #203: We're thinking about different settings, I think what youre going to see and this is primarily for competitive reasons not not playing that game.
Speaker Change #197: This year goes along.
Speaker Change #205: We'll be very transparent about our development strategy.
We: Some of this it's not even that we are in the decision making process, we know, but we wanted to let play out a little as we get closer to those studies coming online and Youll see theres different lines of therapies. There is other combinations. We are thinking about in addition, you can imagine even stuff that we might go.
Speaker Change #208: In both directions and different things so we'll describe that as the year goes along.
Speaker Change #197: Alright, thanks, very much guys.
Speaker Change #197: Thanks, Jonathan.
Jason <unk>: Our next question comes from Jason <unk> with Bank of America. Please go ahead.
Jason <unk>: Thank you good afternoon, and congratulations on the progress really appreciate you taking our question.
Jason <unk>: Just to take a step back on the adenosine pathway.
Jason <unk>: Just starting development efforts it looked like the pathway it was up regulated across a number of tumor types.
Speaker Change #202: And while there is certainly a.
Speaker Change #207: Very encouraging signals in colorectal and pancreatic cancer there've been some admitted set X as well.
Speaker Change #209: Both in cold tumors like prostate and mainly at this point NSC us NFC.
Speaker Change #206: Well I'm curious have you crack the code at this point in terms of which tumors are likely to respond.
Speaker Change #210: Especially as your data sets emerge and mature are there additional signals that give you confidence in the mechanism at this point.
Speaker Change #202: Especially as you start to look longer term it may be some additional indications.
Speaker Change #202: Yeah. Thanks, Jason So I think what we're probably looking at right now when we think about.
Jason <unk>: Sweet spot from what we've learned and this was a big part of what we thought going in.
Speaker Change #202: Is.
Jason <unk>: Less the Oregon in more the biology, and therefore, the treatment and what I mean by that is if you. If you looked at the three studies that.
Speaker Change #202: We're pointing to right now.
Morpheus PD: Morpheus <unk>.
Morpheus PD: Our own pancreatic study.
Morpheus PD: The colorectal study they are both situations that were going right on top of immunogenic chemotherapy.
Morpheus PD: Going into this that one.
Morpheus PD: Was sort of down the middle of the fairway for us where you have a setting where youre killing cells.
Speaker Change #212: It's in this immunogenic way with chemotherapy.
Speaker Change #213: Whats extraordinarily well understood about those settings is that we have that ATP spills out from those initial sales buying you produce a ton of adenosine.
Speaker Change #220: And so if youre able to Mount any sort of immune response.
Speaker Change #216: Those T cells are hit.
Speaker Change #216: By identifying and Thats physics that added benefit there.
Speaker Change #217: A million papers that I can tell you if a T cell C is the debtor thing its going to sleep.
Speaker Change #211: The phenotype of the response that we're seeing in each of these studies is very similar so the places that we are thinking about beyond the current settings would be just those something where the standard of care is an immunogenic chemotherapy.
Speaker Change #219: But there is headed way above that to actually get the benefit of when you think about that.
Speaker Change #214: Immune response that might be induced by chemo that youre going to enhance that by mitigating the effects of the adenosine there for them. So that's the way we're thinking what's the most we've learned to date and there may be more you learn with time, but that's the primary learning go ahead sorry.
Speaker Change #215: I think the third element would be tumors that tend to be very high in CD 73 expression. So that's pretty much takes you to Gi tract.
Speaker Change #223: In long than a person all of those as the places where even if you have the convergence between a high level of <unk> 73.
Speaker Change #223: The agenda chemotherapy.
Speaker Change #223: Got it perfect. Thanks for the color.
Speaker Change #223: Thanks for the question.
Speaker Change #223: Our next question comes from Dana Graber of Leerink partners.
Dana Graber: Your line is open.
Jeff: Hi, This is Jeff on for Dana Thanks for taking our question. So we've gone on the cast and one on the <unk> I guess, starting with with Caf, We noticed novartis had an oral <unk> inhibitor.
Jeff Dana: Housecat differentiate from that molecule and in that context, what are your expectations for that asset presentation. How do you think novartis. His decision to discontinue further development has any read through to cash in your program.
Jeff Dana: Okay.
Jeff Dana: I don't want to comment.
Speaker Change #232: Comment on what we know about the molecule and I'll start off zero read through but I'll, let one comment on the novartis molecule or whatever so.
Speaker Change #222: In vitro.
Novartis: Evaluation of the compounds suggests that it's a.
Speaker Change #226: Reasonably potent <unk> inhibitor in our hands, maybe in order of magnitude weaker than.
Speaker Change #224: Then cash is.
Novartis: As you know there is much more that goes into making a high quality drug and what it does in terms of.
null: Pharmacokinetics retro interaction PK PD.
Speaker Change #238: We'll have to see but definitely going in it was.
Speaker Change #228: It's sort of not a great contender.
Speaker Change #237: Purely for potency standpoint.
Speaker Change #228: Okay, Great and then on the term.
Speaker Change #230: How is the <unk>.
Speaker Change #228: <unk>.
Speaker Change #234: <unk> data in the upcoming arc nine data change.
Speaker Change #231: Change your view at all extreme as potential therapy economy opportunity relative to cleanly.
Speaker Change #235: Put another way do you see any clinical settings that you'd expect to trim. It outperformed cleanly and do you anticipate anything any additional.
Novartis: Randomized phase two or phase III trials for a tremendous year. Thank you.
Speaker Change #241: So on the first question, while some people speculated otherwise we look at both molecules is sitting here today is great molecules and great potential and to be honest.
Novartis: If things continue along the way we've said this from the beginning once we start to get good data in the more good data that come from more of this as something one would contemplate you might even think about combining the two at some point because there are certain situations where you.
Speaker Change #233: May be able to generate that ethane.
Speaker Change #247: Through a mechanism that's non CD 73 mediated in which case blocking its action could be advantageous. So what we're going to see is as of today, we've just seen and youll see the data for yourself. So you can decide we think we've got very compelling data with both molecules.
Speaker Change #247: And going to your question about Novartis I'm, just going to use an opportunity. We've lived under an umbrella of some early studies done that frankly with very bad molecules and we always talk about it's a molecule quality. It's the combination of setting that make the difference and so we.
unknown: I think going forward there is still a whole lot more to be learned with these despite the fact that each of them could be on a trajectory. In fact, you know were starting the pancreatic trial.
Novartis: As late as early next year and as early as late this year and we do expect to do more with each <unk>. The only reason we.
Novartis: Sharing specific details of what the plan will be and obviously after you see the details of our data there'll probably be more questions about exactly what we're going to do in the future, but we're still working through those details together with gilead.
Gilead: We're preparing for discussions that we'll be having with the FDA, we want to think about exactly what would be the.
Gilead: Ideal control Vic.
Gilead: Vic Vic control and standard of care has evolved.
Gilead: When we started it was right around it now.
Gilead: Now it's moved much more to.
Speaker Change #249: And the direction of one surplus bad so theres number of things that we want to work through but you can definitely expect and when you see the data.
Speaker Change #239: You will expect that we'd be crazy to not be doing something.
Speaker Change #239: More with the molecule so we're working through that.
Speaker Change #250: I mean, obviously.
Oracle: It means a lot I think says a lot that I got at Oracle to get an oral presentation at ASKO to get any presentation accepted nasco.
Oracle: I have gotten to be a high bar so yeah.
Oracle: Hopefully the fact that we had an oral presentation accepted.
ASKO: <unk> tells you that the clinical community and elite finding the results in the study.
Speaker Change #251: Alright fair enough. Thanks for taking my questions.
ASKO: Thanks.
Speaker Change #256: Our next question comes from Lee of Cantor Fitzgerald. Your line is open.
ASKO: Hi, there. This is Rosemary all for me. Thank you so much for taking my question just a quick one on your next one program how are you thinking about prioritization.
Rosemary: You have all these late stage trials going on.
Rosemary: How does inflammation.
Rosemary: Thank you.
Rosemary: Yes, So I think if I think the question was sort of the early stage portfolio given that we have all these late stage things how do we how do we think about it so.
Speaker Change #244: We were talking about the collaborators and the collaboration and what it enables us.
Collaborator: Fact, it's another unusual aspect of <unk>.
Collaborator: <unk>.
Collaborator: The dynamic that we created with this collaboration.
Gilead day: When we set this up with Gilead day, one well.
Speaker Change #246: Well people don't always take these things at face value. It was really designed to be.
Speaker Change #255: And R&D engine type of.
Gilead day: Collaboration so clearly disproportionately given the number of late stage programs we have.
Rosemary: <unk> are being invested.
Speaker Change #260: Responded with that said we've continued and this was when.
Rosemary: When we when we discussed the most recent.
Rosemary: Equity investment the Gilead made one of the things that we discussed at that time and theirs.
Rosemary: $100 million.
Speaker Change #252: Feed that there'll be paying shortly that maintains.
Gilead: The relationship there was a big emphasis on continuing to enable the discovery part of it because clearly if you look at what we're generating we started as a blank piece of paper, we're generating what we believe are good high quality molecules for targets of interest.
Speaker Change #263: The most notable one that's moving along nicely and then we think is going to be a big deal as our excellent inhibitor, which recently has gone into patients.
Speaker Change #253: It performed well in healthy volunteers and generating some initial PK data and that will be the first excellent inhibitor that actually test the hypothesis, that's going to help the PK and the selectivity that won't be able to hit so hard and.
Speaker Change #265: See how that works out so the early stage portfolio continues with the same emphasis and investment than it has previously.
Speaker Change #254: To your question on the more immunological component that we haven't shared.
Speaker Change #261: The most recent targets that we're working on and we'll probably hold off on that for some time.
Speaker Change #264: <unk> within a year that will start to talk about that but we along with gilead increased our emphasis there as we built the company we have a very strong.
Speaker Change #269: Immunology Biology group and I think you'll slowly see the percentage of the portfolio.
Speaker Change #254: It looks like.
Speaker Change #268: <unk> immunology inflammation.
Speaker Change #257: Creasing, but it's not like we've defined some particular.
Speaker Change #258: Percentage, we'll still we're still at a stage of our evolution.
Speaker Change #266: The biggest driver would be best players so best target, we'll get the next emphasis in our.
Speaker Change #259: Drug discovery group, whether immuno oncology oncology.
Speaker Change #270: I'll use the term does your ini.
Speaker Change #259: Okay.
Speaker Change #267: Got it thank you so much.
Speaker Change #259: Thanks.
Speaker Change #262: We have no further questions in the queue. So this concludes today's call. Thank you very much.