Q3 2024 Arcus Biosciences Inc Earnings Call

Good afternoon. Thank you for attending today's Arcus BioSciences 3rd Quarter 2024 earnings call. My name is Tambia and I will be your moderator for today's call.

All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star 1 on your telephone keypad. I will now surpass the conference over to your host, Pia Eaves Vice President of Investor Relations. You may proceed.

Pia Eaves: Hello everyone and thank you for joining us on today's conference call to discuss August 3rd, Quarter 2024 financial results on pipeline updates including our upcoming presentation of Arc 10 data at 5th beat.

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 clinical development, milestones, and time-life.

Pia Eaves: All statements other than historical facts reflect the current belief and expectations of management and involve risk and uncertainties that may cause their actual results to differ from those expressed.

Those risk-good uncertainties are described in our most recent quarterly report on form-sandQ that has been filed by the SBC.

Today you'll hear from our CEO Terry Rosen, CMO, Dimitry Nuyten, COO, Jennifer Jarrett, and CFO Bob Goeltz. We'll also be joined by our President Juan Hayen for questions after the prepared remarks.

Pia Eaves: with that I'll turn the call over to Terry.

Terry Rosen: Thank you very much, Pia. Thank you all for joining us today. As we head into 2025, our highest priority is to launch our late stage development program for our HISTOLF and HITR test data fans.

Terry Rosen: As you know, just two weeks ago, we presented an initial data from our ARC20 study, the Valiway in Cats and Late Line Clear Cell RCC and an oral plunder session at the AEDNA meeting.

Terry Rosen: These data clearly validate our conviction that CAS will be a best-in-class HIF-2α inhibitor, demonstrating improvement in every key efficacy measure that we analyzed versus Belzudefen.

Terry Rosen: As you know, Belzuthin is the only HIF-2 alpha inhibitor on the market today. So let's go to slide 5, and I'll recap the highlights from our data set.

Terry Rosen: First off, the rate of primary progression in the 100 mg daily expansion cohort was only 19%, and it was similarly low in the 50 mg daily expansion cohort.

Terry Rosen: In fact, the rate of primary progression for the combined 60 patients in the 50mg and 100mg expansion cohorts was approximately half of what was observed in light SPARC 005.

Terry Rosen: Keep in mind that the Primary Progression Rate and Disease Control Rate, DCR, are the only data points that are fully mature and will not change. So this is really a huge difference for the molecule.

Terry Rosen: Second, we reported a 34% ORR and 25% confirmed ORR for the 100mg cohort with 2 of 3 unconfirmed responses.

Terry Rosen: pending confirmation.

Terry Rosen: and also multiple stable disease patients still on therapy. As of the data cutoff, every responder across both cohorts remained on treatment, with the exception of that one patient whose response did not confirm.

Terry Rosen: The belazudafam data actually provide good precedent for the kinetics of response with HIF-2-alpha inhibition. So this is important.

Terry Rosen: approximately 60% of responses occurred within six months of treatment and an additional 20% occurred in each of the ensuing six-month periods, so that goes out to 18 months.

Terry Rosen: These data illustrate why our ORR could, and in reality more likely should, further improve across both cohorts. Keep in mind, those follow-up times are 8 months and 11 months, respectively, for 50 and 100 milligrams.

Terry Rosen: The ARC-20 data also demonstrated that the activity of CAS is extremely durable.

Terry Rosen: As of the data cutoff, a median PFS had not been reached, even with that 11-month median follow-up.

Terry Rosen: Recall that Belzuthan was approved based upon its PFS of 5.6 months. And our median PFS, which we expect to report in early 2025, should easily exceed that benchmark.

Terry Rosen: Given that PFF is the registrational endpoint, this will be another important source of differentiation.

Terry Rosen: Our spider plots show multiple patients, either past or approaching, the 52-week duration of treatment, and you also see deepening of responses with time.

Terry Rosen: I want to emphasize that these data were generated in a heavily pre-treated patient population relative to that of LightSpark-005.

Terry Rosen: Specifically, approximately 25% of the patients enrolled in ARC-20 wouldn't have been eligible for late SPARC-005.

Terry Rosen: For the 50-milligram cohort...

Terry Rosen: Despite only eight months median follow-up at the data cutoff, we reported a 14% primary progression rate, a 25% ORR, and just over 21% confirmed ORR, with the one unconfirmed responder pending confirmation.

Terry Rosen: One of the confirmed responders was a complete response.

Terry Rosen: Beyond the responders, and again another important point, nearly 40% of patients still continued on therapy with stable disease, including a few whom are extremely close already to the 30% response threshold. And you can see that in the spider plots.

Terry Rosen: While this data set is still evolving and will continue to improve, we now have two different cohorts that are demonstrating clear efficacy differentiation relative to data bells to defend. So there's a lot more data to come.

Terry Rosen: On slide 6, we show the data that we expect to share for March 20, throughout 2025.

Terry Rosen: We plan to present additional data from the 100mg and 50mg cohorts of R20, including more mature ORR and medium PFS that will be early next year.

Terry Rosen: Later in the year, we plan to present initial data from the 150-milligram and the 100-milligram once-daily tablet expansion cohorts, so that's another 60 patients' worth of data.

Terry Rosen: We also plan to present initial safety data from our CASPUS-CABO expansion cohort.

Terry Rosen: To date, the safety data from this cohort, which we already shared with the FDA as part of our pre-phase 3 meeting, are consistent with the profiles of the individual drugs and the dose intensity of 100 mg of CAS and 60 mg of CABO has been maintained.

Terry Rosen: Given the importance of the ARC-20 data, and that's important to us, it's important to you, it's important to investigators,

Terry Rosen: The ongoing evolution of the data sets and the multiple cohorts that we've enrolled, we're considering additional opportunities to provide updates from this study in the more near term.

Terry Rosen: We remain full steam ahead towards the initiation of our first phase two study, Peak 1. The investigator enthusiasm for this study is incredibly high, which we believe will support rapid enrollment.

Terry Rosen: Now let me switch gears to domvinylimab, RFC silane antigen antibody.

Terry Rosen: just yesterday.

Terry Rosen: The SIDS-E abstract was released with data from Part 1 of our ARC-10 study, which evaluated

Terry Rosen: Dom plus Zimbarellamab, that's our anti-PD-1 antibody, versus ZIM, versus chemotherapy, and first-line PD-L1 high non-small cell lung cancer.

Terry Rosen: As a reminder, we terminated this study for strategic reasons to focus on STAR-121, our chemo combination study, but the early termination gave us both an opportunity to generate and now present a data set from a study that was conducted under Phase III conditions.

Terry Rosen: On slide 27, we summarize the abstract. We show that DOM plus XIM exceeded XIM monotherapy on ORR, PFS, and OS.

Terry Rosen: For both PFS and OS, we achieved a hazard ratio below 0.65, which is far better than the threshold considered clinically meaningful in this setting.

Terry Rosen: With median PFS of 11.5 months and median OS not reached for DOM-ZIM, these results are meaningfully above contemporary benchmark studies for anti-PD-1 monotherapy.

Terry Rosen: Dimitry is going to discuss these data in detail, but I want to make two important points. First off, these data reaffirm the growing recognition that FC silent anti-tiget antibodies have a differentiated safety profile relative to that of FC enabled antibodies.

Terry Rosen: There are only two Fc silent tiget antibodies in late-stage clinical development today. DOM and AstraZeneca's anti-PD-1 anti-tiget bispecific antibody.

Terry Rosen: In the last few months, AstraZeneca presented two data sets for their antibody in first-line non-small cell lung cancer and first-line gastric cancer.

Terry Rosen: Interestingly, both datasets look very similar to our own. Specifically, similar efficacy as well as AE rates that are in line with anti-PD-1 therapy alone. That's an important component of the profile.

Terry Rosen: In contrast, for the FC-enabled antigen antibodies, we continue to see reports of higher rates of immune-related adverse events and treatment-related discontinuations.

Terry Rosen: Combining the FC-enabled antibodies with chemotherapy absolutely seems to exacerbate these issues.

Terry Rosen: The second point that I want to make is that with this ARB-10 data set, which will be presented in more detail at CITSI,

Terry Rosen: the ARC-VII results in PD-L1 high non-small cell lung cancer that we shared last year, and the EDGE gastric data that we presented earlier in this year at ASCO, we now have three compelling data sets supporting the potential of DOMZEN in both lung and gastric cancers.

Terry Rosen: For our edge cancer study, we showed a median PFS.

Terry Rosen: of 13 months for DOM-ZIM and first-line gastric cancer which meaningfully surpassed the PFS

Terry Rosen: of seven to eight months seen in benchmark studies. And in the first half of next year, we expect to present mature overall survival from the study.

Terry Rosen: Meanwhile, we continue to execute on our three Phase 3 trials for DomZin. In first-line gastric cancer, with our STAR-221 study, we have the potential to be first to market with an NITGN antibody in this setting.

Terry Rosen: With this study fully enrolled, we're actively preparing for readout and potential submission to health authorities. We believe this setting alone is a three billion dollar plus opportunity.

Terry Rosen: In lung cancer, with our STAR-121 and PACIFIC-8 studies, the latter in partnership with AstraZeneca, we have a potentially differentiated anti-tiget combination in the two settings we're pursuing, first line and stage 3 non-small cell lung cancer.

Terry Rosen: We continue to evaluate our statistical analysis plans for all our DOMSIM studies to ensure that they're optimized for probability of success, but also while addressing the largest number of patients.

Terry Rosen: We also continue to advance the other programs in our pipeline. We've initiated PRISM-1, our Phase III study evaluating QEMLI plus chemo, that's QEMLI is our CD73 inhibitor, and first-line metastatic pancreatic cancer.

Terry Rosen: And with Taiho's opt-in to this program, they're executing the study in Japan. We believe this could be a transformative, first-line therapy in a disease, sure where, with dismal outcomes for patients.

Terry Rosen: Early next year, we expect to advance AB801, a highly selective axonal inhibitor, into expansion cohorts in non-small cell lung cancer.

Terry Rosen: Our relationships with Gilead, AstraZeneca, and Tyho are strong, and they've enabled us to aggressively advance all of our programs in a highly resource-efficient manner.

Terry Rosen: With $1.1 billion in cash and investments and runway into mid-2027, we're comfortably funded through multiple clinical readouts. Before we go to the ARC-10 results, I'd like to turn it over to Jen to discuss our development plans and the market opportunity for CAS.

Jen: Thanks, Terry. Starting with Peak 1, our first phase 3 trial for CAF and Clear Cell RCC, we expect to begin this study in the first half of next year.

Jen: The design is shown on slide 23 of our deck. The study will enroll approximately 700 patients and will compare CAF plus cabozantinib to cabomonotherapy and IO-experienced clear cell RCC.

Jen: Cabo is de-stated apparent in the setting to clinicians who are extremely comfortable administering Cabo and adjusting his testing to optimize the Cabo's efficacy and safety.

Jen: We believe that the vast majority of the second-line patient population, approximately 80%, will be eligible for PQA. Given this study only includes patients who received prior treatment with CABO in the first-line setting.

Jen: You can see on slide 24 that this study targets an approximately 11,000 patient population in the U.S. Assuming a treatment time in excess of 15 months, this is a $2 billion plus market opportunity in the G7 countries alone.

Jen: We are also excited to move into the IO Naive setting with our collaboration with AstraZeneca to combine CAF with their anti-PD-1 CTLA-4 bispecific Borustamib.

Jen: The anti-CTLA-4 PD-1 combination, IPI-NEVO, currently has about one-third market share in the first-line setting, and that share is growing, given a preferable safety and tolerability profile of IO-based regimens relative to those of TKIs.

Jen: By combining CAS with VOLRU, we have the potential to develop a first and best-in-class TKI sparing regimen.

Jen: This represents a patient population of approximately 12,000 in the U.S. alone, and assuming a potential median treatment duration of 20 months, the total addressable market would exceed $3 billion across the G7 countries.

Jen: Additionally, we are working to further expand the development program of CAF into other RCC subpopulations, and you'll see us add additional cohorts to ARC-20 in the coming months.

Jen: We remain confident in CAAS' ability to play a very meaningful role in the RCC market. Today, patients cycle through different treatment options for years, receiving multiple different TKIs with seven different TKIs on the market. But today, in the HIF-2-alpha field, it is just CAAS and Beltuzepam.

Speaker Change: I'd now like to turn the call over to Dimitry to discuss our newly released data for DonSim and blood cancer.

Dimitry Nuyten: Thanks, Jen. Our abstract for ARC-10 was released yesterday morning, and data will be presented in a late-breaker poster session this Friday at CITSE. ARC-10 was originally a global phase 3 study evaluating DOM and ZIM versus CIMP versus chemotherapy in patients with PD-L1 high, non-small cell lung cancer.

Dimitry Nuyten: This is important since the trial conducts with the same rigor as would be expected from a registrational phase 3.

Jen: Though ARC-10 was discontinued for strategic reasons, we continue to follow patients, and now, with over two years of media and follow-up, we are presenting our first overall survival data for DOM and ZIM in any setting. As you will see, the results are supportive of DOM's ability to meaningfully extend survival in patients.

Jen: Starting with the design on slide 30, the trial was randomized 2 to 2 to 1, so there were 38 patients in the DOM and SIM arm, 40 patients in the SIM monotherapy arm, and 17 patients in the chemotherapy arm.

Jen: Baseline characteristics were generally well-balanced across the arms, with some prognostic imbalances favoring the chemotherapy arm. The data cutoff for this analysis was May 17, 2024, and the median follow-up was 24.5 months.

Jen: On slide 31, we show the Kepler-Meyer curve for overall survival.

Jen: These results are quite impressive. In fact, even with two years of median follow-up, a median OS has not been reached for DOM and ZIM.

Jen: The hazard ratio for overall survival was 0.64, a result that is very clinically meaningful. Additionally, the SimControl arm performed right in line with the benchmark studies of febrilizumab in this setting, with a median overall survival of 24.4 months.

Jen: When compared to chemotherapy, Sim demonstrated a hazard ratio of 0.63 for overall survival. Again, this is right in line with Keynote 42 and other benchmark studies.

Jen: The poster presentation will also highlight additional data, including progression-free survival and overall response rates, which also showed a clear benefit for DOM and SIEM, over SIEM, and put SIEM performance in line with the benchmark studies for pembolizumab.

Jen: The safety profile was also consistent with prior observations for DOM and ZIM. Immune-mediated adverse events were similar for DOM and ZIM relative to those for ZIM alone at 23.7 and 20% respectively.

Jen: These results are substantially different from data reported from studies with the EF-C and abled anti-TIGID antibodies, where immune-mediated adverse events and treatment interruptions and discontinuations

Jen: have been meaningfully higher than the anti-PD-1 or PD-L1 alone are. In fact, it has been cited as the cause of trial failures.

Jen: The compelling data from R10, both for efficacy and safety, increases our confidence that combining Donovan-Zimmerman chemotherapy and STAR-121 will further improve outcome and provide lung cancer patients with the best chance of success in their first-line treatment.

Speaker Change: Now I'd like to turn the call over to Bob to cover our financials.

Speaker Change: Thanks, Dimitry.

Bob Goeltz: Our cash as of the end of the third quarter was $1.1 billion as compared to $1 billion as of the end of the second quarter. Our cash position was bolstered by a $100 million collaboration continuation payment from Gilead.

Speaker Change: Turning to our P&L, we recognized GAAP revenue for the third quarter of $48 million, which compares to $39 million for the second quarter of this year.

Jen: Our revenue is primarily driven by collaborations with Gilead and Taiho, and in the third quarter included $15 million resulting from the Taiho opt-in for Kremlin in July.

Jen: We continue to expect to recognize GAAP revenue of approximately $30 million for the fourth quarter of 2024. Our R&D expenses for the third quarter are stated net of reimbursements from Gilead and were $123 million as compared to $115 million in the second quarter of this year.

Jen: We continue to expect modest increases in R&D expenses for the fourth quarter of 2024.

Jen: G&A expenses were $30 million for the third quarter and were flat compared to the second quarter of this year. We expect G&A expenses to remain stable for the fourth quarter.

Jen: Finally, we expect our cash and investments balance at the end of 2024 to be between $950 and $985 million, as compared to our prior guidance of $885 to $925 million.

Jen: We expect these resources to fund operations into mid-2027. Our guidance excludes additional potential opt-in payments and milestones from our partners.

Jen: For more details regarding our financial results, please refer to our earnings press release from earlier today in our 10Q. I'll now turn it back to Terry for concluding remarks.

Terry Rosen: So, thank you all again for joining us this afternoon. As I mentioned earlier on the call, we have a lot coming, and that starts with our CITSE presentation for DomZim on Friday, followed by additional presentations from ARC-20 and the initiation of our first phase 3 study for CAS over the coming months.

Terry Rosen: And as we head into 2025, we'll be approaching our first phase 3 data set for STARV221 and first-line gastric cancer. We appreciate your interest and support of ARCIS, and I'll now open the call for questions.

Speaker Change: Thank you. We will now begin the Q&A session. If you would like to ask a question, please press star followed by 1 on your telephone keypad. If for any reason at all you would like to remove that question, please press star followed by 2. Again, to ask a question, please press star 1.

Speaker Change: As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question. The first comes from Igor Nochemovitz with Citi. You may proceed.

Igor Nochemovitz: Hi Terry and team, thanks for taking the questions.

Igor Nochemovitz: I'm getting a lot of interest in CAS, and people are asking about the potential for Gilead's opt-in. Can you provide any more color there as far as whether there's specified windows? Obviously, you mentioned that you need a qualifying data package. Does that mean it could be the monotherapy or...

Speaker Change: Iliad interested in seeing some of the combo data with VolRU or the initial combo data with CAS plus CABO coming up coming up soon That's the first question. Thanks

Speaker Change: Yeah, so we have aligned with Gilead on what data is needed for the qualifying data package. We're very close to meeting that data requirement so we will be delivering a package to them relatively soon and as we've been saying we expect a decision to be made like this year or early next year.

Speaker Change: Okay, thank you. And then, I'm just curious...

Speaker Change: Was there any preclinical work done with FOLARU and CAS to sort of just do a quick validation of the combo safety in, you know, NHPs or something before going into this collaboration with AZ?

Igor Nochemovitz: simply taking in to do those studies initially in human.

Speaker Change: Okay, and then our last one is...

Speaker Change: I'm curious about

Speaker Change: At Truman Dent, obviously you had the data with ASCO for the ARC-9. What are you thinking there in terms of the later development? There is the other cohort, which is the second-line cohort, cohort A. Is that what you're waiting for before you decide?

Speaker Change: with a registrational study given the obviously very very strong OS that you saw in the in the third line.

Speaker Change: To be honest, it's just a matter of us moving. So we're extremely excited about the data set. And we're just working through with Gilead. You can see, obviously, we're starting a number of.

Speaker Change: later stage trials, and we still have the full portfolio going. So we're working through what our next steps will be, and we'll share them once they're defined together with Gilead.

Speaker Change: Okay, thank you, Terry.

Terry Rosen: Thanks you guys, I appreciate it.

Speaker Change: Thank you. The next question comes from Leigh Wojcik with Cancer Fitzgerald. You may proceed.

Leigh Wojcik: Hey guys, thank you very much for taking my questions. I guess one, in the IO naive renal cell cancer setting, I understand AZ is running the study, but I guess what can you say about what the next step might be and the timing of a potential up-hip-toe trial?

Speaker Change: Yeah, so I'll comment there. We've agreed with AstraZeneca to not comment anything further than those initial plans and we'll say more once the study shows up on clinicaltrials.gov

Speaker Change: Okay, understood. And I know you mentioned on the call, it sounds like you're looking to optimize the step plan for the Phase 3 non-small cell lung. For Dawn, can you expand a little bit on that? What does that entail?

Speaker Change: Yes, so my comment was more general than that. We make that point for all of our studies that were continuously looking at the stat plans for all of our programs. Obviously in the anti-tidget field there's been changes made by others. There's been some

Speaker Change: comments or statements put forward from the ODAC with the FDA. So at this point we're not making any changes but we just wanted to acknowledge that we're always considering that possibility.

Speaker Change: that you are seeing for stable disease patients from the CAST study and it seems like you got a decent number of them still on study. So I guess how clinically relevant is disease control for these patients?

Dimitry Nuyten: Yeah, so this is Dimitry. I'll take the question. So it's very, very relevant for patients.

Speaker Change: Just imagine Rhesus was determined based on large data sets mostly for chemotherapy.

Speaker Change: There had been an effort to standardize assessments of treatment, and based on reproducibility, inter-observer variability, a threshold of 30% was set.

Speaker Change: I think everybody would agree whether or not you're at 25% or 35%.

Speaker Change: Having a tumor that doesn't grow and that has gone down in tumor volume is very important.

Speaker Change: And then the other point that is more, let's say, from a regulatory perspective, response rate is never, ever a registrational endpoint beyond accelerated approval. In this case, in kidney cancer, progression-free survival is the relevant endpoint, and everybody who does not progress.

Speaker Change: contribute to that and in a Kepler-Meyer estimate, the longer you are free of progression, meaning the longer your response is lasting or the longer your stable disease is lasting, the longer you are free of progression.

Speaker Change: contributes equally for each patient to the Kepler-Meyer estimate for progression-free survival. So both from a clinical perspective for patients and from a regulatory, registrational perspective, they're very important. And from a registrational perspective, it is equally important as a response.

Speaker Change: Thank you.

Speaker Change: We'd like to be able to get to everybody so if you have more than a couple of questions can you please hop up and join the queue at a later point?

Speaker Change: That would be great, thank you.

Speaker Change: Thank you. Our next question comes from Jonathan Miller with Evercore ISI. You may proceed.

Jonathan Miller: Hi guys, thanks for taking my question and reminding us to limit our questions just before I got my chance in the queue. Appreciate that. Can I start with some questions about HIF-2, please?

Speaker Change: I noticed in your prepared remarks you talk about two unconfirmed PRs that could still confirm. I'd really like to get some detailed color on that. We hear reports, there have been papers written that suggest that one of maybe, I think one of those two, based on how I'm counting, had a subsequent scan of stable disease. So can you comment of those two unconfirmed partial responses that you're talking about, how many of those have not had a follow-up scan yet, or might be expected to confirm based on one additional follow-up scan? And maybe building off of that.

Speaker Change: Given that a lot of the differentiation you're talking about compared to Belzodafan is in the PD rate, i.e. at the first scan here, how well do you anticipate that to translate to a better profile versus Belzodafan in a combo setting, especially combos with drugs like TKIs, which give their benefits rapidly at those first couple of scans?

Jim: Go ahead Jim Yes, so ...

Speaker Change: The first question kind of takes you through, there's a lot of different questions in there, but maybe just to jump to the back part of your question as far as who has not had a follow-up scan yet that was a responder.

Speaker Change: There was one patient in the 100-men cohort that had not had a follow-up scan yet.

Speaker Change: and one patient in the 50 MIG cohort. So their last scans show them as being responders for the first time, and they are waiting for their confirmatory scans now. And then as we said, for the 100 MIG, there is one patient.

Speaker Change: that did not confirm so far, only one patient.

Jonathan Miller: And in fact, as we mentioned in the script, out of all of the responders, every responder is still on treatment, with the exception of one patient that did not have a confirmed response in the Hydrobank cohort.

Jonathan Miller: Did that answer your question?

Speaker Change: We can go to that.

Speaker Change: I was thinking specifically of that 100 meg cohort. I'm just trying to count UPRs and try to get a sense for where the ORR could realistically get to at the end of the day. And in that 100 meg cohort specifically.

Speaker Change: We said that one patient will not confirm. That means the maximum confirmed donor are that we can get to.

Jonathan Miller: based on the current responders. So that's excluding stable disease patients that have also seen significant tumor reduction. So there can be

Jonathan Miller: and other stable disease patients that also contribute to the ORR.

Jonathan Miller: But based on the current responders, the maximum confirmed response rate we can get to is 31%. And then if just one of those pending responders confirms, then that would take the ORR to 28.3%.

Speaker Change: Great, got it.

Speaker Change: I can take the second part of the question about stable disease and the combination.

Jonathan Miller: So, a few things. So, of course, in the combination, we are going against Cabo and we're building up on top of Cabo.

Jonathan Miller: So everybody in the control arm would get CABO and we are doing the combination. If you think what the combination can do, it can actually help patients in different ways.

Jonathan Miller: On CAS we see both early responders, we have more than a few patients responding at the first scan at six weeks.

Jonathan Miller: We've also disclosed two patients now that responded respectively at 12 and 14 months.

Jonathan Miller: So, that's something that goes on top of the TKI response rate. The primary progression response rate for carboxanthinib is about 20% or a little bit less.

Jonathan Miller: and we hope to catch more patients from that 20% with a different mechanism for the combination. So, of course, we can't speculate what it would be, but we would expect it to also improve on top of the TKI.

Speaker Change: In comparison to the other F2 here, to BelzudaFan, if your differentiation from them is in PD rate, or at least a lot of it is in PD rate, how well would you be able to observe that differentiation in a combo setting where you have the TKI to pick up the slack on the first scan a little bit?

Speaker Change: So I'll comment there. I mean, again, you're purely speculating, but as you know,

Speaker Change: greater than 90% of those patients have some sort of HIF-2 driven component and so

Speaker Change: It puts more people into the queue, if you will. And I think that the place where you'll see that number of patients then leads into every other efficacy measure, whether it's

Speaker Change: ORR, PFS, and I have to say, you know, there's no reason to not start to think about why you may not see advantages.

Speaker Change: in OS, even though that's not the approvable endpoint at this stage. There's nothing intrinsic about ClearCell RCC that should suggest that you couldn't start to prolong OS as well.

Speaker Change: Thank you.

Speaker Change: Thanks, John.

Speaker Change: Thank you. The next question comes from Peter Lawson with Barclays. You may proceed.

Peter Lawson: Great, thank you. Just a couple of follow-ups on the opt-in. What drives that decision for Gilead between this year and next year? Is it something from your side, their side, or is it a different data cut? And then, if Gilead doesn't opt-in, what are the next steps?

Speaker Change: So I'll take that. First of all, there's nothing specifically driving it other than, you know, how long they take to make a decision. It happens to be that because of when we're delivering it, it's relatively near the end of the year. They have a certain amount of time that...

Speaker Change: could, in fact, creep into next year. It doesn't necessarily creep into next year. So that's the only component why we introduced that ambiguity in laying out a time frame.

Speaker Change: As you know, they could opt in yesterday if they wanted, so it sort of defines the latest point.

Speaker Change: of when they can opt in. The second question on...

Speaker Change: Right, if they don't opt-in, you know, there's not necessarily anything that we would do immediately, but it could be any of the three things that you might think of.

Speaker Change: We're very comfortable.

Speaker Change: Continuing with this one on our own, we...

Speaker Change: I love the program. I think it's a great opportunity. Secondarily, we've already had plenty of inbound interest.

Speaker Change: from others who recognize that there is an opt-in decision. I think most other companies have expressed the thought that they think Gilead would opt-in, but we could consider partnership with another company as well.

Speaker Change: Bob? Just on the economics, Peter, so it's $150 million opt-in fee should they decide to opt-in and then we...

Bob Goeltz: share costs 50-50 on the program going forward and then I don't know if you were getting at this with your question, but obviously if Gilead were to opt-in, then we'd work through the details of any additional studies we might want to add to our clinical development plan together.

Speaker Change: Great, thank you so much.

Speaker Change: Thank you.

Speaker Change: The next question comes from Astika Gunwaring Lutruwis. You may proceed.

Speaker Change: Hey guys, thanks for taking my question and I'm going to repeat what John did and ask a multi-part single question here.

Speaker Change: Thank you.

Speaker Change: So, on Paul Rostenberg plus Jeff Benefan,

Speaker Change: When you think ahead as the right comp for maybe some sort of a pivotal study down the line, what do you think the right comp is?

Speaker Change: And I ask because NEPO-EP makes...

Speaker Change: is the morphological comp, but obviously a very high bar.

Speaker Change: and related, the durable CR rate with NEVO-AP is something that is quite attractive about that combination in RCC, but how important is it for you to kind of replicate that or beat that specific endpoint adjacent to the regular primary endpoints that you would consider?

Dimitry Nuyten: Yeah, so this is Dimitry, I can take the question. So the relevant benchmark would be the CHECKMATE 214 study, although of course that is now somewhat outdated, but I think with the mature follow-up, the data has held up very well.

Dimitry Nuyten: in kidney cancer, and I think most people objectively would agree it looks at least as good or perhaps a little bit better than epinephro. Some of the toxicity is a little bit better. So we don't expect, let's say...

Dimitry Nuyten: to have to beat Ippi Nivo with CAS alone. We know we have a solid CTLA-4 PD-1 backbone and then build on top of that.

Dimitry Nuyten: The CR rate, indeed, the durable response rate is important. Obviously, we don't completely know, but I think it's reasonable to hypothesize.

Dimitry Nuyten: that, let's say, one of the things for ipinevo is the pragmatic PD rate.

Dimitry Nuyten: investigators typically will not use epinivo in the setting where they

Dimitry Nuyten: really need a fast response for a patient.

Dimitry Nuyten: So that's something we might be able to change, we might be able to get a lower primary PD rate when we build up on it. And every other benchmark we expect to be able to deepen or lengthen, meaning longer duration of response because we add a mechanism that really helps out in the long term, longer progression-free survival, and hopefully longer overall survival as well.

Dimitry Nuyten: And I think just to hit on the primary PD point, like that was, I think, what got AstraZeneca very interested is that you do have 25% of patients

Dimitry Nuyten: Yeah, and then lastly, to add on top of that, also the safety profile for HIF-2 targeting, specifically Cas-DataFan, would be far more favorable than adding a TKI on top of that regimen.

Dimitry Nuyten: So, that's what we refer to the TKI sparing approach because first-line patients can be on treatment for a very long time, which is cumbersome and, let's say, a burden on patients if they have to stay on a TKI for a long time.

Speaker Change: Great. Thanks so much, guys.

Speaker Change: Thank you.

Speaker Change: Thank you. The next question comes from Dana Graybosh with Lyric Partners. You may proceed.

Dana Graybosh: Hi, I'm going to follow up right along with what Estika just asked about the trial conduct for both PIK1, the combo with CABO and the combo with the CTLA-4 bispecific.

Dimitry Nuyten: And that we've seen in RCC that keeping patients on study seems to be really important, that if you have any toxicities, then managing those discontinuations can really drive the primary efficacy endpoints.

Dimitry Nuyten: Can you talk through your strategy in both of those trials to manage treatment exposure, particularly as you started with the 60 MIG dose?

Dimitry Nuyten: of Cabo, and they haven't always done that in their combination studies, and then also what you're doing with Astra to manage tox with a pretty toxic anti-CTLA-4 as well.

Speaker Change: And so I'll start with the gas combination. So.

Speaker Change: Good points. I see it as a benefit that we will be starting with 60.

Dimitry Nuyten: The trials where the TKI, in this case CABA, wasn't started at full dose was based on

Dimitry Nuyten: toxicities identified with a combination and therefore you give up on some early higher exposure for an active agent like CARBO. So I think it's important for people to be able to start at full dose.

Dimitry Nuyten: That's the safety data we are generating right now. We already have generated a lot of experience with gas by itself and how investigators manage the toxicity.

Dimitry Nuyten: I think the data that we've shown is very convincing that we have virtually no one discontinuing the drug for toxicity. We have some interruptions, and people are able to manage the toxicities and then stay on. So that's the experience we'll also use for the combination.

Dimitry Nuyten: The other thing that makes it a little bit easier in giving guidance is the specific profiles for toxicity for both casts.

Dimitry Nuyten: and for CABO are, let's say, CABO of course very well known and CAS relatively straightforward with anemia and hypoxia.

Dimitry Nuyten: No relevant overlapping toxicity, so giving guidance on potential dose reductions.

Dimitry Nuyten: will be straightforward, and to make it as clean as possible, the trial is what we call an active comparator placebo-controlled trial. So people on the control arm will be getting a CABO plus a placebo to take out all bias from investigator and patients on the assessment of the AE profile.

Dimitry Nuyten: When it comes to AstraZeneca, we can't comment as much on that trial. Obviously, that's currently in start-up and is led by AstraZeneca. Our colleagues at AstraZeneca have generated quite a bit of safety data. Some of that is in the public domain, as I referred to, from ASIMO 2023. And there's a lot more data that's not in the public domain. And with that, they've, let's say, generated a lot of experience in giving specific guidance.

Dimitry Nuyten: And the toxicities they are seeing, of course, are not new. Epinephril has been on the market for quite a while, and kidney cancer investigators are, let's say, very well aware and very experienced with the management.

Dimitry Nuyten: of the Toxicity Profile of Ipinevo and again, the lack of overlapping toxicities will make it easier to give specific guidance for each agent.

Speaker Change: Thank you. The following comes from Salveen Richter with Goldman Sachs. You may proceed.

Speaker Change: Hey, this is Mark on for Salveen. Thank you guys for taking our questions. We have a question on Tijia and Lung on the ARC-10 data at CITSE.

Speaker Change: It looks clear that TJIA is adding a survival benefit, but why do you think the benefit on ORR is less clear?

Speaker Change: And also, how do you expect this data to translate to the STAR-121 study, where it seems like OS benefit from the DomZim doublet is likely already above K-true to chemocombo? And when should we expect to see initial data from the STAR-121? Is it possible that we could see it in the second half of 2025? Thanks.

Speaker Change: So, let me start. I think that...

Speaker Change: OS, and it's durability, it's the tail, and that's why it's a profound.

Speaker Change: that we're seeing. O.R.R. is better, but what you really should be focused on

Speaker Change: The world uses ORR as a surrogate, for PFS as a surrogate, for OS, and

Speaker Change: don't think there's anything unusual about...

Speaker Change: the advantage on ORR. The second question that you asked was...

Speaker Change: How do you expect this data to translate to stock? So we think the translation, you know, we've already seen in edge gastric an advantage on top of chemo. The thing that, and this is where we think we actually have a huge advantage. When we think about

Speaker Change: Physicians are moving more and more from just using Keytruda to using Keytruda Plus Chemo, even in high PDL.

Speaker Change: One, what's become very apparent is that the FC enables anti-tidgets.

Speaker Change: have an issue with AEs in the context

Speaker Change: of Fundamentals to Conference.

Speaker Change: The underlying mechanism is that anti-TIGIT is enhancing the activity of the anti-PD-1.

Speaker Change: Same phenomena that we demonstrated in the context of GI cancers on top of chemo, and we've shown the data from

Speaker Change: What we're seeing consistently, again, is that we're not seeing any enhanced AEs, so you really get the full advantage of what the mechanism is.

Speaker Change: with the FC silent molecule. I think it's important to start to realize there's enough data out there to just bucket into two categories, the FC enabled and the FC silent. So AstraZeneca.

Speaker Change: and all the other later stage molecules are having issues consistently with those immune-associated adverse events.

Speaker Change: Oh, and then your next question was, when might we see, we haven't commented yet, the point that I would raise is that

Speaker Change: in the context of Edge Gastric, which was fully enrolled.

Speaker Change: I'm sorry, so R-STAR-221, which is the phase 3 correlate to that.

Speaker Change: The O.S. for the standard of care is about 13 months. As you know, in non-spoil so long there, it's going to be over 20 months. And so we'll give guidance on readout sometime next year.

Speaker Change: Sounds good. Thank you.

Speaker Change: Thank you.

Speaker Change: Thank you. The following comes from Jason Zomanski with Bank of America. You may proceed.

Jason Zomanski: Good evening. Thank you so much for taking our questions and congratulations on both the quarter and the recent presentations. I had a couple of quick follow-ups on the Peak 1 study. You know, in terms of primary endpoint, you have PFS. You know, Merck is advancing a number of similar studies with Belzodafan.

Speaker Change: with Ovatnib in a couple of different settings, including second line. Where the primary endpoint is PFS and OS. Just curious on kind of the decision behind making the primary endpoint PFS. And then just kind of fundamentally, what do you think you need to do to distinguish yourself from Merck's combinations?

Speaker Change: given their potential to kind of that first mover advantage, you know, particularly when, you know, if you look at, say, the first line setting, there are a range of different studies.

Speaker Change: that you might not have the same sort of efficacy, but kind of that inertia there keeps them.

Speaker Change: well used, you know, example, Keynote 426, looks like 17% still use it, even though it's maybe not as good. It's a, you know, Checkmate 214 or Checkmate 9ER. Thanks.

Speaker Change: Yeah, so when it comes to treatment preferences, that's the last part of your question. There's a lot of things that go into it. I actually referred to that earlier on. Ipinevo, for example, is very well recognized for very durable responses.

Speaker Change: and Long-Term Survival Benefit. The downside of this regimen is recognized as primary progression. So patients with Bokeh disease, patients who need a response immediately, they're typically not put on ipinevo. And based on early readouts, patients with favorable risk were also not given the opportunity. But with longer-term follow-up, it's now very consistent that the IDMC risk categories are no longer considered to be predictive of ipinevo benefit.

Speaker Change: So that's one of the reasons when it comes to differentiation, it's the question I answered previously. I think in this particular setting, Merck is not doing this trial. They don't have a TKI-free first-line trial, which from a physician-patient perspective, not having the TKI toxicity for the long duration of treatment in the first line by itself is already a very important differentiator.

Speaker Change: When it comes to the second line differentiation, PEEQ 1 versus LightSpark 11, having a far more preferred TKI as combination partner, CABO versus LENFA.

Speaker Change: The logical choice, because Merck owns Lempfauer, a part of it, for us is a major benefit. We consistently hear from physicians that CAVO is much easier to handle than Lymphednib. The dosing complexity of multiple dose levels for Lymphednib.

Speaker Change: The overall less, let's say, less well-perceived toxicity profile is an important differentiator. The other differentiator we have is, even though Merck was earlier with the trial, that comes with the downside that their experience

Speaker Change: in post-adjuvant patients by definition will be very limited to almost not existing. We will be able to capture those patients, so potentially we will get a broader label as well.

Speaker Change: And then the last part of your question about the dual primary endpoint, I cannot comment on why Merck is doing it. I can only speculate. The registrational endpoint is PFS.

Speaker Change: comes a little bit down to trial size efficiency. However, the only reason to do OS as co-primary, or better saying dual primary endpoint, is if you are not sure if you can hit PFS.

Speaker Change: So, if you hit PFS as primary endpoint, all the alpha goes to the secondary endpoint and you have an adequately powered overall survival analysis.

Speaker Change: So, in my, let's say, from my perspective, doing it as a dual primary endpoint unnecessarily makes the trial larger, but they might have done it because they didn't know what the trial readout would be. Obviously, we will have that advantage that the trial that they are doing will have read out before we get to our analysis.

Speaker Change: in a rare case that we would have to make updates, we can do so.

Speaker Change: Got it. So if I'm hearing you correctly, you think between Peak 1 and LightSpark 011, you'll have a tolerability edge. Do you think you can also have an efficacy edge as well?

Speaker Change: Absolutely. If you, let's say, if I just start with the low bar...

Speaker Change: If you can stay on a TKI longer because it's better tolerated, you have more benefit.

Speaker Change: Then, of course, we are generating the CAS data that starts to look differentiated from Bell's pseudophen on efficacy.

Speaker Change: notably the primary PD rate, but also other metrics that start to look better. So we are confident that both the combination partner, but also our HIF-2-alpha inhibitor, both will be part of the story of a better efficacy and a better safety profile combined.

Speaker Change: Perfect. Thanks for the color.

Speaker Change: Thank you very much.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: The next question comes from Eva Fortea with Wells Fargo Securities. You may proceed.

Eva Fortea: Hi, thanks for taking our question and congrats on the progress. A quick one from us.

Speaker Change: So for the Dom-Theme combo in the Phase 2-Edge gaffer, you guide it to OS Data in 2025.

Speaker Change: So if I recall correctly, you've only shown data for one arm, but the study included more arms. So I was wondering if you're going to share data from the other arms together in the same update or if this might come at a later time next year. Thanks.

Speaker Change: So the guidance indeed is correct. We have committed to the OS data for SGAS rate that's maturing right now for 2025.

Speaker Change: I think we've said it before, the enrollment in ARM A-1, that's the ARM we presented, and then A-2.

Speaker Change: is the contribution of ComponentARM for regulatory purposes was not at the same time. They were done sequentially. The data are maturing. And I would say it's unlikely we would present it all at the same time because these things don't mature at the same time. But at some point we will present the data if it's mature.

Speaker Change: Thank you.

Speaker Change: Our final question comes from Igor Notchumovitz with Citi. You may proceed.

Igor Notchumovitz: Yeah, hi, thanks for the follow-up. Just very quickly, I think, Terry, you mentioned in the prepared remarks that you may be in a position to provide updates in the more near term.

Speaker Change: Does that mean that we might get some of this data that's referenced in the release this year? Could you just clarify what you meant there? Thank you.

Speaker Change: Yeah, we didn't want to get too specific, but let's recognize, look at all those studies we have ongoing, or cohorts within the study.

Speaker Change: So, you know, we have a 150-milligram cohort, we have a 100-milligram tablet, we have the 50 and 100 that we've already talked about that are continuing to mature.

Speaker Change: And what we felt is, for sake of transparency and the importance of these data, that when we see something meaningful, we're going to look to find a way.

Speaker Change: to get it out there. But right now, we don't have any specific plans, but we recognize there's such a large volume of data. We see they're interesting. We want to make sure to take the opportunity to update whenever it might be meaningful.

Speaker Change: All right, thank you. Got it.

Speaker Change: Thank you. There are currently no other questions in queue. This concludes today's conference call. Thank you for your participation. You may now disconnect your line.

Speaker Change: Thank you.