Arvinas, Inc.

Thank you for standing by. At this time, I'd like to welcome everyone to our Venus third quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to redraw your question, again, press the star one. I will now turn the conference over to Jeff Ball. Please go ahead.

Good morning, everyone, and thank you for joining us. Earlier today, we issued a press release with our third quarter of 2024 financial results and a corporate update, which can be accessed in the investor section of our website at our venice.com. Joining the call today are John Houston, our Venice Chief Executive Officer, President and Chairperson, Noah Berkowitz, Chief Medical Officer, and Andrew Sake, Chief Financial Officer. Angela Cacchetti, our Chief Scientific Officer, will join for the Q&A portion of the call. Before we begin, I want to remind you that today's discussion will contain forward-looking statements that involve risks, uncertainties, and assumptions. These factors are outlined in today's press release and in the company's recent filings with the Securities and Exchange Commission, which I urge you to read. Our actual results may differ materially from what is discussed on today's call. I'll now turn the call over to John Houston, our CEO, President, and Chairperson. John?

Thanks, Jeff. Good morning, everyone, and thank you for joining us for our inaugural earnings conference call. So, why are we starting earnings calls now, some six years after our IPO? Well, we have a truly exciting year ahead of us, and we are on the cusp of a huge transition for the company as we await our first pivotal data readout coming by the end of 2024 or the first quarter of 2025. In addition, we continue to make significant progress with a novel approach to discover, develop, and commercialize a new class of medicines for the treatment of cancers and neurodegenerative diseases. As we look now forward to providing updates each quarter as we move closer to our goal of becoming a multi-product commercial stage organization with a robust pipeline across several indications. We have a lot to discuss this morning, so I'd like to provide an overview of the topics we'll be covering. I'll begin with a brief overview of our VINUS, our ProTac discovery platform, and an update on our pipeline. Noah will then provide an overview of our expectations for the variant TAC2 trial and discuss our confidence in the combined ability of VEP-Degastrant or VEP-Deg with other metastatic breast cancer treatments. And finally, Andrew will provide an overview of our third quarter financial highlights. I'll add some closing remarks, including what we believe is the opportunity for VEDVEG, both as a combination and monotherapy, before opening the call for Q&A, when, as Jeff mentioned, we will be joined by our Chief Scientific Officer, Angela Kikasi. In the 11 years since our founding, we have taken major strides towards our mission to improve the lives of patients with serious diseases. Our pipeline of proteolysis targeting chimeras or protein degraders have been designed to harness the body's natural protein disposal system to selectively and efficiently degrade and remove disease-causing proteins. This groundbreaking protein degradation platform has enabled us to create an exciting pipeline driving some of the most significant breakthroughs in targeted protein degradation in the industry. These breakthroughs include designing degraders with drug-like properties that are orally bioavailable and, when needed, able to cross the blood-brain barrier. Very soon, we'll have in hand the first-ever Phase III data readout for a ProTag. While the majority of our call this morning will be focused on our progress with VetDag, we will also briefly cover the advances we've made with our other clinical programs. In future calls, we will provide a deeper dive into our exciting pipeline that spans oncology and neuroscience. Our most advanced program, VetDeg, is an orally bioavailable protein degrader specifically designed to target and degrade the estrogen receptor for the treatment of patients with ER-positive, HER2-negative breast cancer. VETDEC works by degrading the estrogen receptor to block signaling through the ER pathway. By degrading the estrogen receptor, we believe VETDEC could potentially benefit patients with breast cancer who have ER-positive HER2-negative disease. As a reminder, in 2021, we entered a global 50-50 collaboration agreement with Pfizer to develop and commercialize VEDD-EGG as a potential next-generation ER-targeting backbone therapy of choice in breast cancer, as both monotherapy and in combination with other therapies. Together with Pfizer, we initiated the first-ever phase three trial with the PROTACT, the VERITACT2 trial. This is a randomized, open-label, multi-center trial of VET-DAG versus Fulvestrin in patients with ER-positive, HER2-negative advanced breast cancer whose disease progressed after prior endocrine-based treatment for advanced disease. The readout of data from this pivotal Phase III clinical trial will be a landmark event for Arvinas. We are on track to share top-line data by the end of 2024 or the first quarter of 2025 based on timing of events. If positive, these results will support our first new drug application and our potential transition to a commercial stage company. If proven effective, VETDIG can offer an oral monotherapy treatment in the second line setting, which could be a promising option for appropriate patients progressing on a CDK4-6 inhibitor-based regimen. For context, approved ER targeting treatments provide a few months of progression-free survival in this setting. a once-daily oral monotherapy that offers a clinically meaningful improvement in PFS and is well-tolerated, could be an important advance for patients and commercially very attractive in a highly fragmented second-line treatment landscape. Additionally, we continue evaluating VET-DEG in combination with other agents, including the approved CDK4-6 inhibitors, ribocyclib, and abemacyclib, in the ongoing Phase 1b2 TACTIV-U umbrella trial. We look forward to presenting initial Phase 1b data from the Abema Cyclob substudy of TACTIV-U in a poster at the San Antonio Breast Cancer Symposium later this year. The TACTIV-K trial, which is evaluating VetDeg in combination with Pfizer's PDK4-selective inhibitor, Atiramosaclib, continues to enroll patients. I will now turn to our earlier stage programs where we see exciting potential opportunities for PROTACs across oncology and neuroscience targets. First, neuroscience is an area where the unique properties of PROTAC degraders are particularly well suited, especially given the potential drawbacks of other drug modalities like antibodies and antisense oligonucleotides. Our most advanced neuroscience program, ARV102, is a novel oral prototype designed to cross the blood-brain barrier and target leucine-rich repeat kinase 2, or LARP2, which is a large multi-domain scaffolding kinase. We have shown that ARV102 achieves deep brain region penetration and degradation of LARP2 in non-human primates. We've also observed differentiation from inhibitors by showing improved effects on lysostomal dysfunction and movement of disease-relevant biomarkers in the central nervous system in preclinical studies. We intend to explore the potential of ARV102 in two severe neurodegenerative disorders that are linked to LRRK2 dysregulation. Progressive supernuclear palsy, a disease with a strong genetic link implicating LRRK2 with faster-progressing disease, and Parkinson's disease, where LRRK2 has been shown to contribute to the pathology of the disease. Earlier this year, we initiated dosing in a first-in-human phase one clinical trial of ARV102 in healthy volunteers. This ongoing Phase I trial is primarily designed to establish the safety of ARV102, but will also measure LRT2 degradation in the periphery and cerebrospinal fluid, or CSS, to establish the ability of ARV102 to cross the blood-brain barrier and degrade LRT2 in humans. The learnings from this Phase I trial will be valuable as we strive to address the incredibly high unmet needs in neurodegenerative diseases. We look forward to sharing initial data for ARV102 in 2025. We are also working with the Michael J. Fox Foundation's Parkinson's Progression Markers Initiative to identify novel LART2-dependent proteins that are altered in non-human primate CSF following administration of ARV102. We recently presented at the Michael J. Fox Foundation's annual Parkinson's Disease Therapeutics Conference where we disclose new preclinical biomarker data for ERV102. To our knowledge, this is the first data set to demonstrate that the degradation of LRRK2 in just these changes in pathway biomarkers of liposomal function and inflammation in the CSF of non-human primates, an exciting discovery suggesting that the PROTAC mechanism may lead to differential outcomes versus LRRK2 inhibitors. The presentation is posted in the scientific publication section of our website. Turning now to our third clinical program, we are also pleased with the preclinical profile of ARV393, a PROTAC designed to degrade B-cell lymphoma 6 protein, or BCL6, a transcriptional repressor and a major driver of B-cell lymphomas. The BCL6 protein facilitates B-cell tolerance of rapid proliferation and somatic gene recombination through the repression of cell cycle checkpoints, terminal differentiation, apoptosis, and the DNA damage response, which become dysregulated in several types of non-Hodgkin lymphomas. Protact-mediated degradation has the potential to overcome the traditional undruggable nature of BCL6. We are recruiting patients with non-Hodgkin lymphoma in a phase 1 clinical trial of ARV393 and look forward to updating you on our progress next year. Finally, we are preparing to file an investigational new drug application in 2025 for our KRAS G12D program. KRAS is a driver oncogene in several major tumor types and is associated with poor prognosis and resistance to standards of care. We are also developing a novel pan-K-RAS degrader and look forward to sharing more about this as we progress the promising program. With that, I'll turn the call over to Noah for a more detailed overview of the VETDEG program. Noah.

Thanks, John, and good morning, everyone. I'm happy to provide an update on the progress we and our partner Pfizer have made with our VETDEG program. Let me first note that even with the recent advances in treatment options, there is still a high unmet medical need in ER-positive HER2-negative metastatic breast cancer. Despite the availability of multiple therapies, as patients move into the late line setting, most will experience disease progression within a few months of initiating treatment. Also, the tolerability and the route of administration of available therapies may adversely affect patients' quality of life. We believe DepTec has the potential to become a best-in-class backbone ER targeting therapy with superior efficacy and tolerability, which could support its becoming a preferred and valuable treatment option for physicians and their patients. This is why I'm excited to discuss the VERA-2 trial, our second-line plus phase three trial with DepEd, which is on track for a top-line data readout by the end of 2024 or in the first quarter of 2025, with timing driven by accumulation of PFS events. The trial is evaluating the efficacy and safety of DepEd compared with fulvestrant in patients with ER-positive HER2-negative advanced breast cancer. The patients enrolled in Veritech2 have previously received and progressed on a combination of CDK4-6 inhibitors and endocrine therapy. Veritech2 has two co-primary endpoints, progression-free survival, or PFS, in the ITT or intention-to-treat population, and PFS in the ESR1 mutation subpopulation. PFS will be assessed by blinded independent central review. Secondary outcome measures include overall survival, anti-tumor activity, including the objective response duration of response and clinical benefit rate, and safety and quality of life assessments. Although important progress has been made in treatment of metastatic breast cancer for patients who have received prior treatment with CDK4-6 inhibitors, the most recently approved oral agent has an approval limited to patients with ESR1 mutations and has shown a median TFS of 3.8 months. The Veritech 2 study of DepTec is in CDK4-6 inhibitor-experienced patients and was designed to demonstrate a benefit over fulvestrant in both the ITT and ESR1 mutant subpopulations. Now let's discuss our expectations for the Veritech 2 trial. Based on our study design, we expect to show a meaningful improvement over Fulvestrin. We look forward to sharing top-line data in the coming months and submitting this for review to health authorities. If successful, this may result in the first-ever regulatory approval of a protractor grader and act as the first step in establishing VEFDAG as a backbone ER therapy of choice. In addition to the Phase III Veritech II trial, as John mentioned, we and Pfizer continue to evaluate data from several additional studies to inform the design of the potential Phase III combination trials that we anticipate will start in 2025 pending regulatory feedback. One is the second line plus setting, and the other is in the first line setting. We will evaluate data from TACTIV-U, TACTIV-K, and the study lead-in portion of Veritec3 to inform our decision about which agents can be combined with DepDeg. Preliminary data from the combination of DepDeg and Avemacyclib will be presented at the San Antonio Breast Cancer Symposium in December. We believe these data will show a manageable safety profile at the full doses of both agents. and that the preliminary PK safety and early efficacy will reinforce the potential of VEFDAG to be used in combination with standard-of-care breast cancer agents. With respect to other sub-studies within TACCID-U, enrollment is ongoing, and we anticipate that initial data from the ribocyclic combination will be available next year. We expect these data will further show VEFDAG's potential as an ER backbone therapy of choice. We are also making progress in the Phase 1-2 Active K Trial, which is evaluating Depdeg plus Pfizer's novel CDK4 inhibitor, a termocyclic. We in Pfizer look forward to evaluating data from this trial later this year, which we will use to inform the design of our Phase 3 trial in the first-line setting. Overall, we believe Depdeg has the potential to provide superior efficacy and tolerability, both as a monotherapy and in combination, for patients with breast cancer who are in need of new treatment options. With that, I'll now turn the call over to Andrew for a review of our financials. Andrew?

Thanks, Noah. I'm pleased to share financial highlights for the third quarter ended September 30th, 2024. As a reminder, detailed financial results for the third quarter are included in the press release we issued this morning. As we near our first phase three trial readout, we are in a strong financial position with cash on hand sufficient to support our operations into 2027. At the end of Q3, we had $1.1 billion in cash equivalents and marketable securities on the balance sheet. This allows us to progress all of our key strategic objectives, which include progressing the BEPTED clinical program, including two expected phase three programs starting later next year, preparing for our first launch of a commercial product, and advancing our promising portfolio of pro-tech degraders. Let me now turn to financial highlights from the third quarter. During the quarter, we recorded $102.4 million in revenue. That was compared to $34.6 million in revenue for the same period in 2023. The increase of $67.8 million was primarily due to revenue from the Novartis License Agreement of $76.7 million, offset by a decrease in revenue from the DepTec Collaboration Agreement with Pfizer of $7.6 million, and a decrease in revenue from Bayer of $1.1 million. General and administrative expenses were $75.8 million in the third quarter compared to $22.6 million for the same period, 2023. The increase of $53.2 million was primarily due to the termination of our laboratory and office space lease with 101 College Street of $43.4 million, as well as increases in personnel and infrastructure-related costs of $5 million. Research and development expenses were $86.9 million in the third quarter compared to $85.9 million for the same period in 2023. The increase of $1 million is primarily due to an increase in personnel-related expenses of $2.8 million, partially offset by a decrease in program-related expenses of $2.2 million. As we embark on a pivotal year for Arvinas, we are focused on making strategic investments in programs that are meaningful to patients and truly differentiated. I'm confident that a strong balance sheet will enable us to accomplish our objectives. With that, I'll turn the call back over to John for closing remarks. John? Thanks, Andrew.

This is clearly an exciting time for Arvinas. We are well on our way to becoming a commercial-stage organization with strong leadership and a rich pipeline across multiple therapeutic areas. In partnership with our colleagues in breast cancer at Pfizer, we have an exceptional team of experienced leaders who stand ready to bring VEP-DEG to breast cancer patients in need of new treatments. We believe that the upcoming top-line data from the Phase 3 VRTAC2 trial will be the first step in establishing VEP-DEG as an ER backbone therapy. First is a monotherapy, and over the next few years, in combination with other treatments. Every year, nearly 40,000 patients with metastatic breast cancer are treated in this second-line plus setting, with approximately one-third receiving monotherapy treatment. In the first-line setting, another 40,000 patients are treated every year, and most of these patients will receive an ER therapy as part of their treatment. By establishing VetDag as a monotherapy in the Second Line Plus setting, we have an opportunity to lay the foundation to potentially change the treatment paradigm for many thousands of patients with advanced ER-positive, HER2-negative breast cancer. In addition to VetDag, we're advancing a broad pipeline of product candidates across several therapeutic areas, including hematology and neurology, with our ProTac discovery engine. Before opening the call to your questions, I'd like to thank the patients and physicians who are participating in our clinical trials. I'd also like to thank our talented and dedicated Arvinas team and our partners in breast cancer at Pfizer for the hard work and passion they bring every day. Our progress would not be possible without their commitment. And lastly, I'd like to thank our shareholders for their continued support. With that, I'll now turn the call over to Jeff to begin the Q&A portion of our call.

Jeff? Thanks, John. Before I turn the call over to the operator, I'll ask that you limit yourself to one question per cycle to make sure we're able to give appropriate time to everyone. Feel free to rejoin the queue for any follow-up questions.

And with that, operator, can you please open up the queue?

Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to redraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. And your first question comes from the line of Akash Tiwari with Jefferies. Your line is open.

This is Manoj in for Akash. Thanks for taking our question. So just one. Should investors' base case be that Pfizer moves with their CDK4 combo with the WebDAX, not only for the first line, but also for the second line? Why would iBrands or any other CDK4-6 combination be used at all in your pivotal studies if CDK4 inhibition shows meaningfully better heptoxy?

Thanks for the question. Could you just repeat the beginning of the question?

Should the base case be like Pfizer-Mose with the CDK4 inhibitor combo with Webdeg in the first line and like second line?

I see. So you're asking whether or not our base case should be in the first line should be CDK4 plus Webdegastrant. Yeah, no, it's a great question. And clearly, first of all, we're very excited about the fact that our data is right on our doorstep. So by the end of this year, beginning of next year, we'll have our pivotal data. We're also excited by the fact that we have a combination ongoing with a thermocyclic. Clearly, that's a very exciting asset. I think if we end up choosing, as with Pfizer, that that is the combination partner, I think that would be a great step forward. But obviously, we've got data ongoing with our Palbo-Cyclib combination. We'll have that data this year and allow us to make decisions next year with Pfizer and the combination. But yeah, I think we'd be very excited if the data tells us that the CDK4-Fib-Degastrant combination is the right one. We'd be very excited. Yeah, thank you.

Thank you.

Next question comes from the line of Brad Canino with Stifle. Your line is open.

Good morning, and thank you for the updates. Question for me on the upcoming abemacyclid combo data. Could you help frame that expectation relative to the Pelbo combo data you presented last year, where you had the 11-month PFS, the strong response rates, activity in both ESR1 mutant and wild type? Is that the bar as we think about additional DDK combos that you will be unveiling over the next several quarters in these pre-treated phase 1B populations? Thank you.

Yeah, thanks. Great question. Clearly, we were very, very excited about our data set with the palpable combination. I'm going to hand this over to Noah in a second. The thing to remember is that data set, that was not 100% patients that were CDK4-6 experienced. 86% of the patients in CDK4-6 experienced And then 14% didn't. In this trial with abema cyclib, when you see this data, it's 100% post-CDK4-6. So just with that caveat, I'll ask Noah to make some comments.

Sure. So we had the benefit when we reported the results of the PALBO-VEPDA combination last year to have long follow-up of patients. And so that's why I think you referenced the median PFS we observed there. But in addition, as you suggested, we were able to look at response rate and safety in that population. So we view this smaller data set that we're going to be presenting from a bemacyclib with shorter follow-up. as a data set that can inform about the efficacy of the drug, but looking at things like the response rate, which can mature further and similar for CBR. And then on top of it, the safety profile, which will include actually even more recently treated patients and will be a larger data set. And then you can make that type of comparison.

Got it. Thank you.

Next question comes from the line of Ed Serdarro with BMO Capital Markets. Your line is open.

Great. Thanks for taking the question. Thank you for the updates today. Just a question around the fall vestment control arm for Veritac, too. We've gotten questions on that. If you could maybe frame your expectations, and do you think there's any Anything we can read through to the Lilly upcoming data sets around sort of, you know, where sort of that control arm lands and how it actually could perform for Veritas. So anything incremental on your expectations around that? Thank you.

Yeah, great question. And again, I'll be handing over to Noah just to give you some detail in terms of the answer there. Clearly, the design of our VRTAC2 trial was based on standard of care, which was fulvestrant and still is. And our design is to show that we can be superior to Fulvestrin. We're also very excited to see what the EMBR3 data will show when it comes out. And clearly, we want to be able to look at the different patient populations there. Again, Vertac2 will be 100% CDK4-6 experienced patients. And when we look at EMBR3 data, you want to be able to look at that data and be able to do the kind of like-for-like comparison. Noah, do you want to say any more about the fulvestrin control arm and how that might be compared to what Lily might do? Sure.

Thanks, John, and thanks for the question. So overall, it's difficult, obviously, to predict exactly what we're going to see from the fulvestrin arm. We expect that given the prior treatment that patients have experienced, It'll be somewhere in between what was observed in the Emerald study and what was observed in the post monarch study. So we would expect it to be somewhere in the three, four month range, you know, and, uh, by comparison, we would, uh, hope to see a few months better for the VEPDAG arm. And, um, In terms of that second part of your question about EMBR 3, we don't know exactly what to expect from that. What we'll be looking at is what is the safety and tolerability of that combination and also in what patient population. There is some, when you look at the inclusion criteria for Ember 3, it looks like patients who were not CDK4-6 exposed could be enrolled in the study. So we'd have to understand the results in the context of prior CDK4-6 exposure to draw any comparison to our study.

Great. Thank you.

Next question comes from the line of Ellie Merle with UBS. Your line is open.

Hey, guys. Thanks for taking the question. So I guess into Veritac 2, how are you thinking about the potential for success in the non-ESR1 population? And if you could sort of review the reasons you think that this could be successful. And then what do you think is the minimum threshold for success here on PFS to be able to get this broadly across ESR1 and non-ESR1 patients. Thanks.

Thanks, Ellie. That's a great question. And again, I'll be handing over to Noah for the specific answer. Clearly, in this second-line plus patient population, we are fighting against the biology of the disease. Obviously, a significant part of the disease is driven by ESR1 mutation. We think around 40% of the patients will have tumors that are still endocrine sensitive. And then there's a large group of patients with tumors that have got well-type and other driving mutations. And we think a slice of that patient population will also be able to react well to Vibdegastran. So just remember that there's that biology there, the disease that we're fighting against. But, yeah, Noah, do you want to be specific about that? Sure.

Not a lot to add there because I think you addressed it, but I would say that our expectation is, as you know, we have co-primary endpoints in the study. We're looking at the ESR1 mutant and ITT population. So, our expectation is that we're going to be successful with those primary endpoints. Our base case for what will be approved is the ESR1 mutant subpopulation more than anything else because that's the precedent that's been set at regulatory bodies. What we have to see, though, in the non-mutated patients, would be some type of, you know, I assume regulatory bodies will want to do some post hoc analysis, and we'll be looking at that with them. And we'd want to see some benefit, though I'd remind you that the study is not powered for that population. We believe that it would be successful, as John outlined, because the underlying biology of the wild-type population is is that many of those patients are still endocrine sensitive and don't have alternative driver mutations that might limit their responsiveness to febdegastrin. So we remain pretty confident that we can see a positive result for ESR1 mutant and for the ITT population. Thanks, Ellen.

Great, thanks.

Next question comes from the line of Derek Arkela with Wells Fargo. Your line is open.

Good morning. This is Evelyn for Derek. Thanks for taking our question. One from us, can you help frame a little bit the market for Vestec, assuming you hit StatsVic in both ESR1 mutant patients and wild-type? And what if you only hit in the ESR1 mutant patients? Are there any good analogs there? Thanks, Mark.

Yeah, thanks for the question. And clearly, we think there's a significant opportunity here, specifically for monotherapy, then even bigger opportunity as we move into second-line combination and first-line combination. I think, as I said earlier, nearly 40,000 patients with metastatic breast cancer are treated in the second-line setting. And right now, about a third of them are getting monotherapy treatment. And then in the first-line setting, it's another 40,000 patients that are diagnosed every year, and the majority of those patients will receive an ER therapy as part of their treatment. So we believe the game plan of establishing Vibdegastran and its potential as a monotherapy in that second-line plus setting will give us the opportunity to lay that foundation to potentially change the treatment paradigm for those many thousands of patients that have got PR-positive HER2-negative breast cancer. And of course, if we can show a PFS in line with combination therapies, we believe we can grow the monotherapy opportunity significantly.

I just wanted to offer one comment, not addressing the underlying market question, but you had mentioned STAT-SIG for wild type and for ESR1 mutant. So again, I wanted to remind that the study design is to look at and we'll be doing our statistics on the ESR1 mutant and for the ITT population. We're not doing stats for the wild-type subset of the ITT population. I just wanted to make sure that was clear.

Next question comes from the line of Lee Wacek with Cantor. Your line is open.

Hey, good morning, guys, and thanks for taking our questions. I guess for the Phase III combo trials in frontline and second line, Wondering if you can elaborate a little bit on the key regulatory inputs that you still need before you nail down the final design and how much of that is still dependent on the data that you need to generate.

Thank you for the question. Yes, the question is about the key regulatory thinking in terms of the path forward for our first-line and second-line combos.

Noah, do you want to talk to that? So again, these are ahead of us. So after the Veritech two results, which we're expecting in Q4, Q1, we head into the planning for next year that I think you're alluding to, which is combinations for first and second line. Each of those requires a health authority discussion. You've seen in our guidance, that we heard in our conversation a moment ago that we're looking to combine in the second line with Palbo and or another CDK4-6 inhibitor. And in first line, we can be combining with the Termo or Palbo. And we've also shared that we're very excited about that opportunity if we can combine with the Termo. There are different considerations for each. It depends on what is the comparator arm in each of these studies. We haven't announced that, so that would be a discussion point with regulators, the exact patient population that's being chosen. And particularly in first line, there's no doubt we'd get into a deeper conversation about contribution of components if we're using two novel agents. but we believe that there are a lot of supportive data that will allow us to navigate that discussion. But at this point, that's probably the most guidance we can offer about what the regulatory discussion might look like for combinations in those settings.

Next question comes from the line of Ted Tantoff with PayPal Sandler. Your line is open.

Great. Thank you very much, and thanks, guys, for hosting this call today. It's nice to get to hear from you and get the update. I know there's a lot going on. I know most of the questions have been on VEPDAG, but just to ask with Novartis and 766, what's the latest there and how do you and they anticipate advancing that in prostate cancer? Thank you.

Thanks, Ted. Great question. Yeah, as you know, we did the outlicensing of 766 earlier this year, and we spent the last several months in the process of handing over data, materials, all the information that's needed to get Novartis up and running to progress ARV 766. Clearly, the excitement for us in terms of doing that outlining thing was Novartis' commitment to go into early prostate cancer. And that is the game plan that they still have. So they'll be looking at early and late stage prostate cancer using ARV 766. And we think based on the interactions we've had, they're well on track for that. Obviously, now with it being outlicensed, all of the kind of significant updates will come from Novartis themselves. But we are really pleased with how the transfer of information material went and the game plan that Novartis has actually shared with us on 766. And, of course, we'll be able to share in the future scenarios for 766 as it progresses, and we're looking forward to getting updates from the parties as it does.

Thanks, Tom.

Thanks, Ted.

Next question comes from the line of Tazin Ahmad with Bank of America. Your line is open.

Thanks. Good morning. Maybe they switch topics to ARV102. Can you talk about the size of the PD population that you're specifically examining that have this elevated LRRK2? And how are you going to use the biomarker to determine segmentation of the population?

Thanks, Tati. Great, great question. We have in the room here with us Angela Kekesi, our chief scientific officer, and I'll hand directly over to her to talk about the answers to those questions.

It's a great question. So, you know, the estimated size of the population that's believed to have, you know, elevation of LRRK2 is about a third of the idiopathic Parkinson's disease population, pretty sizable. And so, you know, it is still under active investigation how you would actually employ the biomarkers that we've recently described at the Michael J. Fox Foundation Therapeutics Conference. And so, you know, we're partnering with that group, so both the Parkinson's Progression Marker Initiative, as well as their LRRK2 Initiative. to really understand how do you stratify patients, but we're really encouraged by the data that we have that suggests that we can study both inflammatory markers as well as lysosomal markers to stratify the patients appropriately to conduct a reasonable clinical trial.

Yeah, and I might build on what Angela said, just reminding you that we are currently running a a study with ARB 102. We completed the single ascending dose portion of the healthy volunteer study. We're currently in the multiple ascending dose portion, but the take-home message is that in this study we're looking at all comers and these are healthy volunteers. They don't necessarily have elevated LRRK2. We're going to move next and look in patients who have Parkinson's disease. you heard from Angela that we expect a third of patients will have elevations. There's going to be no selection at the start of that study, but we're going to learn from doing these, from looking at our degradation of LRRK2 at various doses of the drug and looking at those downstream biomarkers what our overall approach. And I think at this point, there's a wide open field. We can end up being not selective of patients at all, or we could end up choosing to look at patients with elevations. It will all depend on the data that we generate and how we interpret it.

Next question comes from the line of Michael Smith with Guggenheim. Your line is open.

Hey, thanks for taking my question. I just had a follow-up on ARV1 or 2 and the Phase 1 study. How should investors interpret the Phase 1 data in Healthy Volunteers next year? Are there specific PD markers, perhaps, other than LRG2 degradation that you're assessing? And how predictive are those for potentially improving outcomes longer term?

Right. So the healthy volunteer portion of the study is really designed to understand the PK-PD relationship of the drug and track what we're doing peripherally and, more importantly, in the central nervous system, you know, is monitoring the drug and the LRRK2 expression in the CSF. We don't expect that healthy volunteers will have elevated downstream biomarkers that are associated with the neurodegeneration that's seen with this disease. that's something that we'll be looking at more confidently, obviously, when we move to patients as opposed to healthy volunteers. But I think that what we can walk out of this confident about, you know, if things are successful, is that the modeling that we did to predict dosing of the drug and its impact in the CNS compartment, the modeling we did in the synos that is so promising that that can be recapitulated in human beings, that this can drive the right dose selection, and then that sets us up for success when we move to, you know, when we're looking for this on-target activity at the right dose in patients with PD. And I think that's quite a lot right there.

Next question comes from the line of Tyler Bamburen with TD Cowen. Your line is open.

Hey, guys. Thanks for hosting the call. I just want to follow up on your response to an earlier question for the Veritac 2 trial readout. So if the control fulvestrin arm does three to four months on medium PFS and you hope to see a few months better per your earlier comment or a three-month-plus delta in the ITT population, or a near doubling, how do you expect median CFS to improve for both arms for the ESR1 population analysis?

Thanks, Tyler.

Sure. Well, I just want to, going back to the earlier comments, I think what we said, I said part of that, but I'm not sure. all of it. You know, our expectation is three or four months in the fulvestrant arm, a few months better on the treatment arms. We haven't differentiated what we're going to see for the ESR1 mutant or for the for the total population, we would expect that ESR1 mutant patients will do a little better because they have this dependency on the ligand-independent estrogen receptor-driven binding estrogen receptor-driven proliferation for their tumors. So we just haven't gotten into those specifics or gone through the operating characteristics of the statistical plan, but suffice it to say, you know, a few months better, as I outlined.

Next question comes from the line of Jonathan Miller with Evercore ISI. Your line is open.

Hi, guys. Thanks for taking the question. I'd like to talk more about the VEPDAG combo phase threes that you're talking about getting started next year. Can you contrast Vertac phase three portion with these new phase threes that you're talking about? And it seems like the PR suggests you're focused on Palbo and CDK4. It seems like you're not pursuing Ribo or Abema combos in first line, at least it wasn't called out. So can you talk a little bit about how the data from what you're still waiting for from the TACTIV trials to make the decisions about ultimate combo partner A, and B, given the CDK4 combo data you mentioned will be available internally this year for use in deciding about those combination phase three, is it fair to expect that you'd give some key details on the CDK4 VEPDAG combo data? data when you decide on a phase three course? Because I noticed you haven't given guidance on when we could see that TAC2K update.

Yes, thanks. Yeah, great question. And I think clearly there's a number of different trials we have ongoing that are going to generate data that's going to really influence our decision making. We have Veritac2. We have the Abima combo. We have the Atiramo combo. We have the Palbo SLI. We also have the Ribo combo ongoing as well. So there's a whole bunch of data that's coming out now and through into the early part of next year that sitting down with our colleagues with Pfizer, we'll be able to decide what is the right combination. Obviously, there's preferences there, but we'll wait for the data to actually drive that decision. But, Noah, do you want to go into any more of the specifics?

Yeah, maybe we could dive in a little more, and thanks for the question, Jonathan. So let's look at first line, and then we can look at second line. So first line, I think the original intent some years ago was to go with a VETDEC, PALBO, and first line, and that was an obvious choice. Palbo was the most prescribed drug in that, CDK4-6 in that setting. Pfizer is our partner, and so they could supply it. And unfortunately, we weren't able to roll straight into that because we were challenged to find a lower dose of Palbo that would satisfy benefit risk from the perspective of health authorities. And so we started the Veritech 3, which is... The SLI portion of is reading out as John mentioned But in in the meantime we have we will have the fullness of the that data set But also have now done the work for a termo and we're very excited about it in the term of combination the first line because it would be a very differentiating combination, you know possibly a best-in-class CDK4 or CDK4-6 drug combined with what we believe would be a best-in-class PROTAC in this setting, you know, which would be superior to the SIRT alternatives, and it would fit perfectly in this partnership as well. So we're waiting for that study, but we weren't considering things like Ribo and Abema because I think they don't really solve for those problems, right? Termo gives us that differentiation, and Palbo was... ease of use. In the second line setting, we've guided to either using a palbo combination because we have great results in this setting that we've already shared, and maybe offering some choice to prescribers or to investigators in this case by allowing another CDK4-6, which could be presumably something like a BEMA. We're not guiding specifically to this. But the idea is that we may end up doing it, you know, and you should just look forward to the San Antonio breast cancer data to make your evaluation of this a BEMA-VEFDAG combination and the viability of that in the second plus setting. What we really like, of course, about all of these opportunities is that VEFDAG is a very combinable drug. While we did see that there was more neutropenia for the, you know, with full-dose PALBO and VEFDAG in the original dataset we performed, we will now be sharing more data about the broad combinability of this drug. You know, you'll see the ABEMA data set. You'll see some work about better understanding of metabolism with the midazolam study. And then, as we've said, next year we'll provide some updates as the data mature for the ribocyclic portion of the TACTIV-U as well as the termocyclic combination seen in TACTIV-X.

Next question comes from the line of Paul Choi with Goldman Sachs. Your line is open.

Hi everyone, this is Khalil calling in for Paul. Thank you so much for taking our question and congratulations on the first earnings call. I guess a quick modeling question from us is, one I guess real quick is, as you have a lot of these earlier stage assets entering the clinic or IND filings, how should we think about the cost ramp for next year, maybe the year after, and then just on the Novartis agreement, Given the revenue recognition that you had this quarter, are we correct in thinking there's about $930 million in additional payments, or is that, like, how do you actually think about, like, the cadence of that going forward? Thank you so much.

Yeah, thanks for the question. I'll hand over to our CFO, Andrew, to answer these questions.

Yeah, thanks for the question. Yeah, look, we haven't given specific guidance on our expense structure, and we're not planning on doing that in the near term. Obviously, the mix of projects that we have, programs going out, is changing, right? So previously, the company had the two phase threes. We've outlicensed the one to Novartis. That was done consciously by the company to manage expenses and manage our burn. As we have these other programs coming through the clinic, Clearly, they're going to start costing a little bit of money. We're well aware of what we're going to be spending on them, and we're very confident in the guidance that we've given in terms of cash into 2027 with our current balance sheet. I think you had another question on Novartis. Can you just repeat that? I'm not sure if I heard that.

Yeah, of course. So just given that we assume that the $150 million upfront payment has already occurred, and then you reported today like $67 million or so in revenue from that agreement. Our understanding is that there's a total of about a billion-ish in payments that are contingent on certain milestones. Obviously, those I don't think have been disclosed, but we were just wondering if you could share any color on how we should think about the cadence of revenue from that agreement, like, in 2025?

Yeah, so the revenue that you're seeing on our P&L right now is all deferred revenue from the upfronts, so that doesn't have anything to do with, you know, future milestones, et cetera. We amortized the upfront from the Novartis Agreement over this year because that's the period during which we were handing over, you know, responsibilities for the trials, and so we still have responsibilities. With Pfizer, it's much longer. So we obviously had the large upfront from them, and that's a deal that's a 50-50. So we're actively engaged in that. So we're amortizing those revenues over a longer period of time. So you'll actually see the Novartis drop off this year. The Pfizer will continue on for some years.

Got it. That's really helpful. Thank you so much.

Next question comes from the line of Yigal Nokomovitz with Citigroup. Your line is open.

Hi. Thank you for taking the questions. And I just wanted to follow up on some of the questions regarding the frontline strategy and the comments Noah was making on contribution of components. So if it turns out that you pick, and you and Pfizer pick, a termo plus VEPDEG, are you going to be able to do a trial where it's a termo VEPDEG versus palbo fulvestrin, or... Given the consideration of contribution of components, is it going to potentially be more complicated with including a PALBO VEPDAG arm as well as an ATERMO fulvestrin arm? I'm not sure how that would work. If you could comment. And then I'm just also curious if you've generated data today to support the fact that you won't have a DDI with ATERMO and VEPDAG. Thanks.

Thanks, Shigal. Great questions.

Noah? Okay, I'll try and tackle this. You know, let's jump in with a follow-up if I missed part of that. So first of all, so in first line, we're not guiding to the exact design of the study, but I think we're going to be, I think you can be confident that we would be focusing more on an AI combination in that setting rather than fulvestrant, or that's the initials. Whether it's PALBO alone or CDK46 choice on the part of physicians, these things are not defined, you know, haven't been, you know, resolved with regulatory authorities yet.

In terms of, but I think that kind of addresses what you asked, is there something

That's related to the design part. Yeah. I think you got the second request. Do we have any idea we have a DDI with a termocyclope? I mean, what I would say about that is we believe that the data, which you'll start to see from the San Antonio Breast Cancer Symposium and onward, will show that the degastrant is the compound that is going to be very broadly combinable with any of the kind of medications in the breast cancer space. That would include a thermocyclic. Clearly, in all of the studies, we're tracking this now. And as I say, the data will come out and show that this is a non-issue from a clinical perspective.

Okay. I appreciate it. Thank you very much. Thanks, Yago.

Next question comes from the line of Bila Jangangiri with Tourist Securities. Your line is open.

Hi. Thanks for the call. This is Bill on for CRIPA. We were wondering what's going to be the final deciding factor or maybe factors on choosing which combo to take forward? Is it strictly on efficacy or is there some sort of strategic IP factor involved too that you're thinking of as well? Thanks.

Well, it is. Obviously, it's going to be based on all the data that we're going to be generating and are generating. As I mentioned earlier, we have ongoing combination trials with abemacyclib, with eteromacyclib, with ribocyclib, and the SLI data in palbocyclib. All of that data will be in our hands. tail end of this year, first half of next year. And that will really drive the data-driven aspect of our decision-making. It won't all just be looking at the efficacy. It will be looking at safety tolerability. So we'll get a true gestalt view of our overall data set. So I think we'll actually be in an incredibly good position to make a really smart decision about the combinations. As I said, there's clearly we have some biases, but the biases will be influenced completely by the data set.

Yeah, and I would just add a small point, John, that when it comes to efficacy, look, we're sharing data about what we see in the second line setting, and I think the efficacy there is characterized by things like ORR and CBR. In first line, the efficacy that would be at our disposal is probably those type of data points. We're not going to wait for medium PFS. Obviously, in first line, where you have medium PFSs that can exceed two years, one wouldn't wait for that. We would use other signals when looking at efficacy, you know, and obviously then safety to make a decision.

Great. Thanks. And is there any...

Next question comes from the line of Matt Bigler with Oppenheimer. Your line is open.

Hey, guys. Thanks for squeezing me in. I realize we're at the top of the hour. It's like covering a large cap with the number of analysts here. I just wanted to ask about the statistical plan for Veritech 2 to the extent you can tell us. Is it hierarchical testing or are the co-primary endpoints like effectively the alpha split between them? between the ESR-1 and the ITT population? And secondly, do you think a 0.7 hazard ratio would be good enough for an all-comers label? Thanks. Okay.

So thanks for the question, Matt. In terms of the hierarchy, we have two co-primary endpoints, and we can win on either one of them. We're going to, but for all purposes, we think that the ESR1 mutant is obviously going to be even more likely than the ITT. That's just the nature of the disease we're treating in. There is some hierarchical testing that goes on from there, the specifics of which we haven't defined yet. In terms of, what was the second part of your question? Remind me. It was about the hazard ratio? Yeah. So we haven't gone to the specifics of the hazard ratio. I will say that we would expect a better hazard ratio or are expecting to achieve a better hazard ratio in the ESR1 mutant than in the ITT population, but more specific than that I won't go into.

Appreciate it. Thank you.

Next question comes from the line of Michael Smith with Guggenheim. Your line is open.

Oh, hey, guys. Thanks for taking the follow-up. I just had a clarification question regarding your earlier comments on Veritech 2. I think you said you expect about three to four months PFS for pro-restaurant in the control arm. And, yeah, I was just wondering what are or are there any major differences in enrollment criteria relative to the post Monarch trial where Full Western obviously did much better than that?

Yeah, well, the Fulvestrin didn't do much better than it, a little better. There was four months in the interim analysis, and I think 5.3 months in the final analysis. People are hard-pressed to understand why the median PFS improved, and was there a change in the patient population between those two analyses, which were both presented at the same time at ASCOE. But the differences are that we have the ability to have patients that were treated like with an endocrine therapy twice. They may have had an eczemestine, let's say, after an initial treatment with a CDK4-6 and an AI. So we will have some patients that are third line, technically. Not a lot of patients will be second line, but I think the large majority will be. And they were a pure second line study.

Is that helpful, Michael? Yeah, it makes a lot of sense. Yeah, I really appreciate the clarification. Thank you.

Next question comes from the line of Jonathan Miller with Evercore ISI. Your line is open.

Hi, guys. Thanks so much for squeezing in my follow-up here. I figured since nobody's asked about it, I'd love to ask one question about the upcoming KRAS pro-tech programs that you're working on, the G12D and the pan-KRAS that you discussed during your prepared remarks. Can you compare these programs to other G12D or pan-KRAS and how do you think a degrader is going to be better suited than some of the other approaches, notably the inhibitors? How will a degrader compare to like a RevMed-like molecular glue and RAS approach?

Yeah, great question, and thanks. And, yes, we're very excited about our KRAS programs, GDLT and the PANC KRAS. And Angela and Noah can discuss the answers to the questions you're posing in terms of the profile and what it looks like in terms of the competition.

Sure. We've been actively comparing both our G12D ProTac lead degrader to the inhibitors that have been described and have shown superiority, and we've disclosed some of those data. But we've been also actively comparing both our G12D and our pan-protact degraders in a range of non-clinical models to examine the known inhibitors that are out there. And so, you know, generally we're looking really very favorable with respect to our non-clinical profiles. And we're very encouraged to pursue these molecules in clinical studies. So I'm going to hand it over to Noah for further commentary.

Thanks, Angela. So, you know, I guess I can address just the comparative part. But look, we haven't entered the clinic yet. That's forward-looking and something we're excited about for next year. But I think what we've seen from the competition is suggest that there still is opportunity. So when we look at the first data, for example, I won't address the revolution, but you look at a cellist's KRAS G12D degrader, and we see that there's modest ORR, and there are some liver toxicities at higher doses. These are opportunities for us to catch up, differentiate, and demonstrate first in class, which would be needed in this space. And I think we could go through those types of specifics for other agents, but probably a little premature for us right now.

And this concludes our question and answer session. I will turn the call back over to John Huston.

Thank you, and thanks, everybody, for calling in to our first-ever earnings call, and hopefully we'll be able to give you updates over the coming months of the very rich data sets that we'll be getting from the various clinical trials. But thank you for your time this morning. Appreciate it.

This concludes today's conference call. You may now disconnect.