Arena Pharmaceuticals, Inc.

Good day, everyone, and welcome to ARENA Pharmaceuticals corporate conference call. This call is being recorded. I will now turn the call over to Mr. Patrick Malloy, Vice President, Investor Relations at ARENA Pharmaceuticals. Please go ahead, sir.

Great. Thank you, Delphin, and good afternoon, everyone. Thanks for joining us today, and we hope you had a chance to review the press release we issued this afternoon announcing our first quarter 2021 financial results. Joining me on today's call are Amit Munshi, our President and Chief Executive Officer, and Lori Stelzer, our Chief Financial Officer. Before we begin, I'd like to remind you that we'll be making forward-looking statements that involve risks and uncertainties about our goals, expectations, plans, beliefs, timing of events or future results, including those risks and uncertainties related to our pipeline, financial projections, 2021 financial guidance, and the COVID-19 pandemic and its potential impact on our business. Forward-looking statements involve certain assumptions, risks, and uncertainties that may be beyond our control and could cause actual results to differ materially from these statements. A description of these risks can be found in our earnings press release and our latest SEC disclosure documents. All forward-looking statements are based on information currently available to ARENA and we disclaim any obligation to a to update these forward-looking statements. Now, I'd like to turn the call over to Amit Munshi. Amit?

Thanks, Pat, and thanks, everyone, for joining the call today. And again, as Pat mentioned, I hope you had a chance to review the press release outlining our strong progress during the last quarter. As we did last quarter, we're going to move directly to Q&A and have – I'm going to jump right to that and be able to spend more time there. So with that, I'm going to hand it back to the operator to open the Q&A portion.

Thank you, sir. Okay, just a reminder for our participants, if you need to ask a question, just please press star 1. Again, please press star 1. And if you need to withdraw a question, please press star 0. Now let's pause. for a few moments to compile the Q&A roster. Okay. And our first question, coming from Lethea Young from Canterfish, Gerald. Go ahead. Your line is open.

Hi, thanks for taking my question. This is Nina on for Alethea. So we are wondering, as you continue to monitor the elevate studies in UC, we just wanted to get your perspective on how you're navigating the COVID environment while running this trial, and have there been any items fine-tuned in light of that? Thanks.

Great. Hi, Nina. Thanks for your question. We've been monitoring it from day one. Some of you have heard me talk before about how we took our trials off of automatic and put them on the manual. We've had a team monitoring every patient, every day, every site across 40-plus countries and over 400 sites. And we've been monitoring for both patient safety, always our primary concern, and we've been monitoring for study conduct, study integrity, data integrity. So we continue to monitor that. We were able to complete the enrollment in UC52. We're on track on UC12. And as we have for the last, I assume, last 12, 14 months now, we continue to measure or monitor at a very, very patient level and site level. And that just ensures that any impact that COVID could potentially have is mitigated real time. So we haven't We haven't encountered the type of COVID impact simply not because COVID hasn't impacted trial, it's simply because we've been able to manage through the complexities over the last 15 months.

Okay, perfect. Thank you.

Yep. And our next question coming from Ken and McKay from RBC.

Go ahead. Hi, thanks for taking the question. Two questions, actually, and it's more around sort of the evolving competitive landscape in both UC and Atopic Derm. In UC, I was just wondering, you know, what kind of perspectives you had on sort of the potential impact of Ozanamod and, you know, an Ozanamod label could have on sort of future approvals in S1Ps. Is there any risk of a black box warning there, do you think? And, again, there are different properties, at least from where I'm sitting, efficacy doesn't quite look anywhere as good as what we've seen previously from Atrasimod. I'm just wondering if there's any worry that could color physician opinions. Separately in DERM, very similar questions, but much more so around the TIK2 and JAK inhibitors in the AD space, and whether there are any there to the S1P class. Thank you.

Sure. Hi, Ken, and thanks for the question. On the impact of ozonamide label, we haven't seen their full label in also colitis. They don't have approval yet, so difficult to comment on what it could be. The risk of black box is an interesting question. The S1Ps don't have a black box across the board, even the first-generation compounds. So I think Ozonamide does not have a black box relative to the MS label, so I find it difficult to believe that we would expect a black box in ulcerative colitis, nothing untoward happening in UC that hadn't previously seen in the MS setting. So across the board, the S1P modulators have a cleaner label than the JAK inhibitors. That's certainly true that we've seen so far, and we expect that to continue being true. We've also seen no differences in first-dose monitoring labels. Both ozonamide and symponamide do not have first-dose monitoring requirements, despite having pretty dramatic first-dose heart rate effects, as well as AV conduction abnormality. So we're encouraged by the way the agencies have viewed the S1P modulators relative to the JAK classes. And that bleeds really into the ear derm question, which is, you know, what are we seeing with the JAK inhibitors broadly, whether it's JAK1, JAK3, TIK2, all the various pathways within the JAK class. What we're seeing is a continued side effect profile that has discouraged physicians from large uptake in the ulcerative colitis and IBD space, despite initial strong progress in the rheumatoid arthritis-based. We know the dermatology community is very sensitized to safety profiles. So we were, you know, we'll see what those look like once those indications are up and running in those markets, and we'll see what those labels look like. But across the board, as you're well aware, the risk of malignancies, the black box warnings on VTs, malignancies, serious infectious events, those are pretty dramatic across the entire JAK class, and that includes JAK1, JAK2, 3, the TIC2s, they all fall in that same category. So, again, we're waiting to see how the agencies work through those issues in terms of labeling, and we'll be able to provide more color once we have more clarity.

Yeah, sounds good. Sounds like we're all thinking the same thing. Thanks, Amy. Great to hear from you. Thanks for doing this.

Thanks, Ken. Really appreciate it. And our next question is coming from Jason Gerberry from Bank of America. Please go ahead, sir.

Hi. This is Chi for Jason. Thanks for taking our questions. Maybe just a couple on the Subpart A of the Chrome Suite coming out later this year. I guess the first question is on the primary endpoint. Can you confirm you're looking at both the endoscopic response as well as the clinical remission CDI score and whether we can expect both set of data in the top line release or maybe it's a little too early to tell? If that's the case, which of the two endpoints do you feel is more important from a regulatory approval perspective and separately from a commercial perspective? I guess the second question on the same study is that based on the clinical mix of the clinical trial sites for the trial so far, what would expect the patient mix to be between biologic-naive and biologic-refractory at baseline? Would you expect that patient mix to be similar to 50-50 observed with phase two study of both animal and Crohn's? Thanks.

Hey, Chi, how are you? Good to hear from you, and thank you for your questions. On the primary endpoint, we are looking at both CDAI and endoscopic improvement. We'll be reading both of those out. As far as which one's more important from a regulatory or commercial point of view, I think that's probably the wrong question as it relates to a Phase II study. The right question in a Phase II is, which gives us confidence to move to that next stage of development? And in this case, it's really both. And we'll be looking at that relative to Other agents in the class, betalizumab, we'll be looking at this relative to the ozonamide data. And most important for us is the fact that we're taking two doses forward into Crohn's, and so we're going to be looking for dose response across both of those indications. So, again, the purpose of a Phase II study, especially a Phase II study as defined as our Substudy A, is really to help inform and guide the next stage of development for the study. As far as patient breakout, it's tough to tell. It's too early. The sites are relatively uniform, so we'll see what percentage of patients are naive and what percentage of patients are pretreated, but it's a bit too early for us to be able to comment on that.

Awesome. Thank you so much. Good to hear from you. Thanks, Gene.

And our next question is coming from Ms. Jessica Fay from JP Morgan. Go ahead.

Hey, guys. Good afternoon. Thanks for taking my questions. Can you give us a better sense of when in the back half of the year we should expect the sub-study A CRONS data? I'm trying to get a sense of how much time there will be between that update and the Phase 3 Elevate readouts. And then on the Elevate studies, can you remind us whether we should expect both Phase 3s to be released together? or if they'll sort of inevitably going to read out at slightly different times from one another. Thank you.

Thanks, Jess. We said before the end of the year simply because we don't know how the enrollment kind of evolves. But as soon as we complete enrollment in that trial, we'll announce that as we have historically, and that'll start the clock toward the subsidiary data readout. So all we've guided to right now is the end of the year, and that's probably the prudent thing to do. And then we expect to read out both 52 and 12 at the same time in aggregate and separately and with all the details that we've spoken about before. But we'll be announcing all of that together.

Great. Thank you.

Yeah, thanks.

And our next question is coming from Mr. Joseph Schwartz from SBB Lyric. Go ahead.

Thanks very much. I really like this call format focusing entirely on Q&A. Once again, you're innovating in so many important ways, guys. So maybe a couple questions on your ongoing alopecia areata study. Could you start by talking a little bit about this study and how you're thinking about the different patient types and how you'll be analyzing the data in order to determine who's the best to include in Phase 3.

Yeah, thanks, Joe, and thanks for the compliment on the format. We figured you guys are all completely able to actually read a press release, so we didn't need to have an entire script which basically reiterates the press release. The The AA study is a proof-of-concept study. Right now it's 36 patients. It's a single dose. We will be having both alopecia areata, totalis, and universalis patients, or all three subsets of patients in that. But it's a small study at 36 patients. Even with a randomization scheme that puts more patients in the treated arm, you're not going to have a lot of patients in each. So I think it's important to remember that in almost every one of these cases, it's the first time this class of drugs is going into these patients. So we want to make sure that there's a signal. We want to make sure that there's a patient benefit. And these patients do react very differently in these trials. The alopecia areata patients with SALT scores, you know, let's say in the 75% range, versus in the 90 to 95% or higher as with totalis and universalis, all react very differently. We've also heard experts in the field talk about how these might actually be slightly different diseases with different phenotypes underneath. So, again, when you're taking a new drug that's never been taken into a disease area into an exploratory Phase IIa study, it's directional. So I just want to set that expectation 36-patient trial in terms of what we'll be able to see out of that. But to your point, you know, if we start seeing effect across all groups versus effect after one group, that will begin to inform where we take our phase three study.

Okay. Thanks. That's helpful as we were wondering some of those things too. So if I could just ask one more on this program. Yeah. I was curious to what extent is the SALT score a subjective measure that might be that might just introduce some potential for natural variability due to different physician interpretations? Or are you doing anything to control for that potential confounder or anything else that you've identified going into the study or during the study that you might be able to control for? Sure.

Physicians that are used to doing AAH studies are used to doing SALT scores and understanding how to actually calculate percentage of body area that is subject to alopecia in whichever form. So we're less worried about that. And the bigger worry is if you push too far down on the scale, meaning more mild patients, for example, in the alopecia areata setting, you do get a lot of spontaneous remissions. There's more variability in that population. It's much more difficult to manage a placebo signal in that population. So that's why we've stayed to the more severe alopecia areata patients and then the universalis and totalis patients, which are, of course, the most severe. By doing that, you get a very good sense of whether the drug is active or not. And I think that's the right thing to do for a phase 2A proof concept study.

Very helpful. Thank you.

Yeah.

Thanks, Jill. And our next question is coming from Nina from Citi. Go ahead. Hey, guys.

Thanks for taking my question. So I'm just curious if you could talk a little bit about kind the next steps for the controlled release formulation of atrazumab and when we could see kind of some, you know, next steps with that program. Thanks.

Hi, Nina. Thank you. So the CR program, as you recall, was designed to further improve upon our best-in-class cardiac effect. As you saw from the atopic drum study, our heart rate effect placebo-adjusted in that trial is just under seven beats, mean change without a titration schedule. So we're already in a very good position. The original premise or the continued premise of this is that we can diminish that first-sus-heart rate effect even further without changing the overall PKPD and pharmacal effect of the drug. And we originally did the work with a series of liquid formulations. The next step in the process was to develop a whole slew of different solid dose formulations. And for patent reasons, we don't discuss all our various strategies in terms of how we're doing that. Those trials are ongoing. And as soon as we have a game plan coming out of those trials, we're looking at multiple dose configurations, release formulations. The exploratory group here is quite substantial in terms of the number of variables that we're looking at. And we're doing that to make sure that, A, there's some meaningful benefit and B, that it's something that we definitely want to spend money and go forward on. Everything so to date has been incredibly encouraging, and we look forward to sharing more data as these multiple experiments conclude.

Great. Thank you.

Yeah, thanks. And our next question is coming from Mr. Jason Butler from JMP Securities. Go ahead.

I just wanted to ask Jason, thanks for taking our questions. I just had a few on eosinophilic esophagitis. Just for the voyage trial, if you could give us any updates on the patient enrollment status. And then more broadly, just any sense of the mechanistic rationale for TRASMOD and EOE, predictive preclinical models. And then what's the market opportunity in your view?

Thanks.

Sure. So, a couple of things. Let me start with the enrollment. We don't provide enrollment updates as a general rule, and it's just a slippery slope, as you guys know. So, that study is moving forward and enrolling in the EOE setting. The reason we picked the EOE early on is really the same rationale as to why we picked atopic derm as potential indications And again, in both of these cases, to the previous question that was asked, this is the first time an S1P modulator has been taken into these settings. And it was really born out of a couple of key observations. One was the bidirectionality between atopic derm and ulcerative colitis. AD patients at a higher risk to develop UC and UC patients at a higher risk to develop atopic derm. So there was some clear bidirectionality. And as we went and ran a whole series of experiments, we we realized that the cell types that we were looking at and the cell types that the biology were perturbing, whether it was looking at IL-4, IL-5, eosinophils, mast cells, were very common to both atopic derm and EOE. And in both cases, these are diseases of degraded barrier function. We see the same type of barrier function degradation. You see some type of antigen challenge in the case of EOE food. In the case of atopic derm, probably a bacterial insult. You see dendritic cell uptake and dendritic cell migration, and we've shown dendritic cell migration reduction in both types of settings. You see the activation of T lymphocytes, CD4, CD8. Then you see the activation of Th1 and Th2 cells. And as a consequence, all the subsequent cytokines, and whether they're Th2 or Th1, the the pathology of both the diseases are actually strikingly similar. And the animal models showed reduction across all these very specific cytokines, as well as a set of activity on eosinophils and mast cells. So we've also tried a trasmod, a derivative of a trasmod in an asthma model. We've disclosed that previously. I believe that's been published. And that compound showed activity again against all the THC cytokines, eosinophils, and mast cells. So in all of these diseases that have this overlapping set of pathology, we've seen the same effect over and over and over. So it was provocative enough for us to kind of move in this direction. Today there's about approximately 150,000 patients in the United States, probably 300,000 to 400,000 patients. in addressable markets globally. With EOE, we think the incidence of that will continue to grow as the disease is better understood. We know that a disproportionate amount of GERD patients are recalcitrant and are no longer responsive to high-dose PPIs. And we think over time, a larger subset of those patients are likely to be EOE patients. And so again, as the disease is better understood, as diagnostics and diagnosis becomes better, I think you'll see more recalcitrant GERD patients actually have an autoimmune basis. And in many of those cases, we'll see something that fits the definition of EOE. So we're incredibly excited about it. There's several biologics being studied in this space. And, of course, for the once-a-day oral, we'll think we'll have a significant leg up there. Okay. That's great. Thank you.

Yep. Thanks. And our next question is coming from Ms. Patrick Truccio from H.C. Wainwright. Go ahead.

Thanks. Good afternoon. Just actually a couple of follow-up questions on EOEs. So I'm just wondering in the in the Voyage study, is there a particular level of knockdown of acinophils that you'd be looking for? Because, you know, in the context of we've seen with other mechanisms and biologics where we see the knockdown of the acinophils, but we actually don't see much of a benefit in some cases on symptoms. And then secondly, just on the DSQ score endpoint, is the study powered to show a certain level of improvement on symptoms? or what would you be looking for in terms of symptoms to give you confidence to advance to a Phase III trial?

Great. Thanks, Patrick. We haven't disclosed the powering assumptions around that study, so I'm going to steer clear of that one. But we are going to be looking at symptomatic scores. At the end of the day, I think it's far less important whether eosinophils are present and far more important whether you have a symptomatic relief in these patients. And I think... that's been the general consensus of experts in the field. Recall that eosinophils are thought to be one of the last cell types that are present into the space, and they trigger the THF beta cascade, which then results in the fibrosis that occurs in the disease. But well ahead of that, you've got a cascade that looks, again, very similar to the atopic germ cascade, where you've got some insults, you've got antigen-presenting cells, dendritic cells specifically. You've got the impact of T cells and then Th1, Th2 cytokines. All of that happens upstream of the eosinophils. And it's interesting, the disease called eosinophil esophagitis because you, on histology, you look for eosinophils and it's the diagnostic marker and the definitive marker literally counts the number of eosinophils. But what's much more important is the symptomatic relief. And if all of these other cell types are involved and the TRASMOD has an opportunity to work across all these other cell types, then, you know, it's our hypothesis going into the study that we'll be much more focused on symptom relief rather than just counting one specific type of cell type. And just because it's in the name of the disease doesn't mean it's the thing that's causing all of the upstream and downstream implications for the condition. I think you really have to take a much more holistic look. When you look at histology, you see CD4, CD8, T-lipocytes. You see macrophages. You see other types of cells beyond just eosinophils in this specific disease. So we think there's much more going on in this condition, and we think that'll play to Atrazimod's strengths in terms of its mechanism of action.

Got it. That's really helpful. And then just a follow up on the trust amount in UCN and Crohn's, you know, looking ahead a few years here, I'm wondering if you can just discuss the commercial launch plans, specifically in UC as this could be the first potential indication on the label. And, you know, just remind us again, the intention to is to launch this on on your own? Or would you or would you look to partner?

Yeah, so the intention and the game plan has been and will continue to be to launch this on our own. U.S. and Europe, and we're working through Japan plans now in terms of what our, you know, whether we need a strategic partner in Japan or a joint venture or whether we go it alone in Japan. These are open questions for Japan. But for the U.S. and Europe, we've stated previously that we intend to go it alone and It's been part of our game plan for quite a few years now. We've had a commercial team and a medical affairs team on the ground for upwards of three years now. I think it's important for companies who intend to do what we do, which is to build a company over a long period of time, to be able to build commercial infrastructure and launch. And what that means is that you have to start early. And we've had the luxury because of our cash balance sheet, to invest early. We've had 50 MSLs on the ground for almost a little over two years now across U.S., Europe, and Asia. We've had literally thousands of interactions with clinical sites, clinical investigators, experts in the field, helping them understand the role of Atrasmod S1P modulation broadly, Atrasmod specifically. We've used that MSL organization to help enroll our clinical trials, get people excited about ATRASMOD and why studying this in this context is important for the future of IBD. And we've had tremendous success in just being able to engage the market and engage the market at a very local level. And we think we made that investment early alongside building the commercial, parts of the commercial organization, getting deep insights into into the market, which led to the building of the Gladiator program, for example, as a Perry approval study. Those are examples of investments in long-term commercial success that most small companies don't have the luxury of doing, and we've had the luxury of doing, and it's really critical. It's absolutely critical, and we see so many small companies that really won't hire or begin to hire commercial infrastructure until post-phase three, and it's really too late. The success or failure of a launch happens years before the product actually gets to the market. We've had dozens of peer interactions. We're working with multiple peer groups around the country and academic organizations using artificial intelligence systems to build value-based systems and understand how we would launch from a value perspective in the marketplace. Again, those aren't things you can just turn switches on and turn switches off. They take years to build those relationships. So I'm really pleased as to our market prep, and we look forward to sharing lots of details around what we're doing as we get closer to launch. Terrific. Thank you so much. Thanks, Patrick. Appreciate it.

And our next question is coming from Yatin Saneja of Guggenheim Partners. Go ahead, please.

Hey, guys. Thank you for taking my question. I just wanted to get a sense of where the atrazumab 3-milligram dose or how the 3-milligram dose fit into the development strategy. Is that a dose in consideration for the atopic dermatitis study? And what are some of the gating factors for the Phase III AD program If you can give some color there, when could that start? Thank you.

Sure. So we're hopeful to start that study by the end of the year. We're in multiple regulatory discussions around the world, and that's really the gating factor is just concluding those regulatory interactions, gaining alignment on study design, study size, duration, As we've spoken to before, we would like to explore three milligrams in the overall program. How we do that is a point of discussion with the regulators around the world. So as soon as we have clarity from all those various moving parts, we'll be in a position to share those details with you guys. I'm really excited about it. We're pending timing of all the regulatory interactions, some of which we can control and some we can't. we still do expect to start the study before the end of the year. Got it. Thank you.

And our next question is coming from Roger Song of Jefferies. Please go ahead.

Great. Yeah, thank you for taking the question. So I have two. So the first one is, Armand, can you remind us about your CV assets in terms of the hot failure and the CNDO?

Sure. Um, so as, as some of, you know, uh, arena has had a long standing history, um, in the cardiovascular research area, it started with real in a peg. Um, and, uh, Linda Peck was designed to be a once a day world that mimicked intravenous prostacyclin, uh, with three and a half fold the half-life of, um, Jane J's, uh, selects a bed compound. and six and a half to tenfold the potency on the IP receptor. That drug had landmark data in their phase two study. And, of course, we found a fantastic partner to move that compound forward in United Therapeutics. That same group has developed multiple other compounds that have applications in other cardiovascular indications. The two that we're progressing are APD418 and Tamantogrel. APD418 is a beta-3 antagonist, and the application is acute decompensated heart failure. Here, we believe we have a compound that, at least in animal setting, suggests improving cardiac function, ejection fraction, cardiac output, with no change in hemodynamics, which would be really the holy grail in acute heart failure, should that hold up in humans. And so we're very excited about that. We do have fast track designation for that compound. The second compound is Tamantogrel. Tamantogrel is a 5-HT2A inverse agonist. By blocking the 5-HT, 5-HT2A interaction, we believe we can actually blunt vasoconstriction and platelet aggregation distal to the site of a PCI in STEMI and non-STEMI patients. So this drug also has a fast track designation. Both the compounds are moving into phase two. We expect data late in 2022 for both the compounds. So we're very excited about this. We think it's foundational for the company long term to continue to progress novel assets in white space areas where there's tremendous unmet medical need. And we think eventually it will form another leg of the stool for the company. So early days, we're through the Phase 1s and building Phase 2 programs out, and we'll continue to give everyone an update on them. But we're extremely excited about what this means to the company over the next couple of years.

Awesome. Yeah, excited to hear about that. additional asset outside of a charter mod. Um, so that's great. Um, and, uh, another question, which is about the finances. Um, so understanding you're having the phase three readouts next year, um, and, um, and of course into your, they prepare the commercialization just to, uh, help us kind of, uh, maybe guide us. So what, what are the potential kind of ramp in terms of the commercial and R and D, um, from next year into the following year?

Sure. Lori is on the call, our CFO. So, Lori, let me hand that to you.

Sure. Hi, Roger. You know, we did guide last year and landed on our guidance at about $350 million in cash burn. We haven't given guidance for 2021. But what I can say is, you know, we are seeing our programs advance. And so, you can imagine that, you know, we'll have continued and increased spend as we advance our UC programs. We began our AB phase three, as Amit said, you know, toward the end of the year. We're seeing progression in our CV, our AA, our EOE, and our CV programs, and so that whole portfolio is continuing to progress. So we haven't given guidance yet, but, you know, we 350 last year, and, you know, we are seeing progression in all our studies.

All right. That's helpful. Thank you.

That's all from me. Thanks, Roger, and thanks for asking the CV questions.

And our next question is coming from Joseph Stringer from Needham and Company. Go ahead, Jared.

Hi, everyone. Thanks for taking our questions. Sorry if I missed it earlier, but a follow-up on Al-Attushi Ariyadah's results. In terms of responder rates for the SALT score, would it be a fair comparison in terms of when the data come out to compare to some of the JAK data that's been reported. Thanks.

Yeah, thanks, Joe. I think the safety profiles of the JAKs and the S1Ps are so vastly different that I think I would encourage caution in terms of what we think the JAK ability to penetrate that market over the long term will be. Clearly in universalis and totalis patients where there is no other potential option. Patients might be willing to take the risk of the malignancies and the VTE risk and the increase in MACE events. That might not be the case broadly for alopecia areata. So we think there's kind of a different risk-benefit profile with S1P modulators. If we're able to show an effect that's meaningful to patients clinically and that physicians believe is something they would choose to use in clinical practice. That combined with the safety profile of S1P modulators relative to JAKs, I think create a completely different risk benefit profile. So again, very early to tell because we're breaking new ground here as we did with atopic derm and as we are with the OE, we're breaking new ground in atopic derm. So early days, I think we'll know more as we move to read out that study. and in terms of what that risk-benefit profile looks like. But I'm always leery of being able to just talk about the benefit without talking about the risks, because that's really how physicians and ultimately patients will make decisions. So I think that direct comparison is always a little difficult because the risk-benefit profiles could look very different.

Great. Thanks for taking our question.

And again, as a reminder, to all our participants, if you wish to ask a question, please press the star 1 now. And our next question coming from Prakhar Agrawal from Jones Trading. Please go ahead.

Hi. Thanks for taking my question. I had a couple. First on seminar to recently started. So just curious on your thoughts on the key elements of the trial design that we should focus on. relevance of the primary endpoint of change in IMR, and what could the development path look like in this indication? And secondly, as I think about the commercial opportunity for gladiator trial in the moderate UC, what could be the barriers when you're thinking about the launch? Is it predominantly going to be access? Will there be some sort of awareness that needs to be generated? I'm curious on your thoughts. Thank you. Great, great questions.

So, on Tamantagril, the focus is in this initial phase two study, as you mentioned, look at the index of microcirculatory resistance, or IMR. It's a quantitative measure. We'll be able to understand actual rates of reperfusion in these patients. It, by itself, is not a regulatory endpoint. And because we're breaking new ground here, I don't want to speculate in terms of what the Phase III and registrational trial will look like. If we see activity here, we will go have a more robust conversation with the agency. They've been incredibly supportive in terms of us moving both our cardiovascular assets forward and allowing a fast-track designation, simply because we're exploring these areas one of these drugs and indications, but there really are very few options for patients. So IMR will be the first time we've seen something quantitative here. Recall that a older agent no longer available in the United States, ketanserin, a 5-HE2A antagonist, has been tried post-angioplasty, specifically looking at perfusion distal to the site of the injury. And we've seen an improvement in vasoconstriction. So we've seen an improvement using this class or a similar class of drugs, or importantly, maybe saying it a different way, hitting this specific mechanism. So it gives us good reason to go run the experiment. And then from there, we'll go have a series of agency conversations, U.S., Europe, Japan, to ascertain what a global phase three program would look like. In terms of Gladiator, flipping back, Gladiator addresses about 150,000 patients that are currently unaddressed in the UC space. These are patients who have very active disease but don't meet the criteria for, you know, we'll call it the more moderate, the steep end of the moderate to severe range for these patients. These are patients on 5-ASAs for the most part, maybe pulse with steroids and still experiencing significant disease. They tend to not meet inclusion criteria for existing studies, but they have, they definitely have very active disease and it very much impacts their life. So we think there's a real opportunity here with the TRASMOD, given our risk-benefit profile, to address these patients. From a launch and access perspective, we think this actually helps our broader access and One of the things that we have already been doing is talking to future potential payers about the role of Gladiator and how it would help in terms of an overall value story for Trasmod. So that work, as I mentioned early on, talking about commercial preparedness, we've been spending a lot of time in the market talking about Gladiator, specifically talking to payers. And we don't think it will be a barrier. In fact, we think it will be a potential benefit in terms of treating these patients. These patients cost the system a lot of money, and they're currently excluded from the current standards of care that are available. So it expands the pool, and for many payers, specifically folks like Integrated Delivery Networks, will actually reduce the overall cost of care for these patients.

Operator, can we move to the next question?

And our next question is coming from Mr. David Wong, SMBC. Go ahead.

Hi. Thanks for taking the questions, guys. Just had a couple. So just in terms of helping to set expectations for the open-label sub-study A in Crohn's later this year, with the 3-milligram dose, I was wondering if you know, there's any specific safety events or things that you would see that might lead you, you know, that would preclude further development of that dose. Is there anything, you know, that would be a red flag for essentially wanting to take that dose forward?

Sure. Again, it comes back to risk-benefit. So, the safety profile of that dose will have to be married with the the efficacy that we see in 3 milligrams versus 2 milligrams. If we see higher rates of adverse events in 3 milligrams and no efficacy, then definitely we'll just move forward with the 2 milligram. You know, there's a strong argument from a cost and time perspective to take a single dose forward. On the other hand, there's a strong competitive advantage to having multiple doses. Clinicians love the idea to be able to throttle a dose up and throttle a dose down. So it's all going to play out on the risk-benefit side. What we know so far is we see on a mean lymphocyte change count, we see about a 12 to 15% decrease in the additional decrease in lymphocytes. Again, these are means from three milligram, two milligram, and it's in healthy. So as we look to patients, we'll be looking at lymphocyte counts, aggregate lymphocyte counts. We'll be looking at a percentage of patients at a grade three lymphopenia. We'll be looking at cardiac, any cardiac issues or serious infectious issues. You know, I will point out that in our healthy volunteer studies, we have to get to five milligrams before we see any of the types of cardiac conduction issues that are seen with some of the other S1P modulators out there. So we do have a lot of room to play from two milligrams up. We think three milligrams is a safe place to go and expose patients. And, you know, the question, again, we'll come back to whether we see the right risk benefit in those patients or not.

Got it. That's great. That's really helpful.

Yeah. Great.

A question that builds off of that a little bit. So, you know, we know as a class that with S1P, there's lymphocyte depletion that's an on-target effect. However, it does not seem to translate to opportunistic infections. And so, you know, I think that's been the case consistently through your trials. And even with grade three events in, you know, in the phase two AD, you know, you weren't seeing any opportunistic infections and things of that nature. Is there anything in the literature to suggest, you know, why that might be, you know, something about S1P where it's more inherently safe than Jax, for example, where it might affect, you know, less immune subsets or spare some, you know, some of the immune system?

Yeah, I think that's spot on. The S1B class are not broad immunosuppressors. With the JAKs, you're essentially, you know, bringing the whole system to a halt, which results in the malignancies and results in the serious infectious events that we've seen across the entire JAK class. With S1P modulation, you're turning down one very specific area, which are T lymphocytes, and and all the subsequent downstream cytokines. But you're not shutting everything down. You know, I think the best analogy I've heard on this is, you know, we're using a screwdriver where a screwdriver works and not pulling out the hammer where you get a lot of collateral damage. It's more specific. Immunosurveillance is maintained in these patients. We haven't seen the serious infectious events across the board. And frankly, I think across the entire class has not been an issue for S1P modulators. So again, it's just a more specific class. And it's interesting to think about a TRASMOD with its unique features in a class that really hasn't had an optimized compound. historically and where TrasMod could go in terms of its broad clinical utility is really quite astounding. But it comes back to this point. A TrasMod can't be used everywhere. But in the subset of diseases where we think a TrasMod can be used, we think it's just a better fit for patients. A single once-a-day oral with the opportunity to regulate disease without all of the broad immunosuppression of the JAK. And there is quite a bit of literature, and offline we're happy to share some references with you, but there's quite a bit of literature suggesting that immune surveillance is maintained with the TrasMod specifically.

Okay. I say thank you for providing context. Really, really helpful again.

Thank you.

That's it from my end.

All right.

Thanks.

And that is our last question for this Q&A session. And at this point, I would like to turn over the call to Mr. Amit Munshi, the president and CEO, for closing remarks.

Great. Hey, thanks, everyone, for jumping on the call today. I hope that was useful moving to the Q&A forum again. And we look forward to continuing to provide updates as we continue to make progress across the entire pipeline. So look forward to chatting next quarter. And I hope everyone stays safe. Look forward to seeing everyone live soon. Thank you.

And this concludes today's conference call. Thank you for participating. You may all now disconnect. Thank you so much.