Jounce Therapeutics, Inc.

Good morning, ladies and gentlemen, and welcome to the Jones Therapeutics Fourth Quarter and Full Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will fly at that time. As a reminder, this conference is being recorded at the company's request. I will now turn the call over to your host, Eric Loft with Jones Therapeutics. Please go ahead.

Thank you, Operator. This is Eric Welb, Vice President of Investor Relations at Jounce Therapeutics. Good morning and welcome to the Jounce Therapeutics fourth quarter and full year 2021 financial results conference call. This morning, we issued a press release which outlines the topics that we will plan to discuss today. The release is available in the investors and media section of our website at www.jouncetx.com. Speaking on today's call will be our CEO and President, Dr. Richard Murray, who will review our pipeline progress and key milestones, followed by our CMO, Dr. Beth Trehu, who will provide an update on our clinical activities. Our CSO, Dr. Dimitri Wiederschein, will then discuss our discovery programs. And lastly, our CFO, Kim Drapkin, will review our fourth quarter and year-end financial results. We will then open the call for your questions. Before we begin, I would like to remind everyone that today's discussion will include statements about our future expectations, plans, and prospects that constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including the risk factors discussed in our SEC filings. In addition, any forward-looking statements represent our views only as of today, March 2, 2022, and should not be relied upon as representing our views of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so if our views change. With that, I'll now turn the call over to Rich.

Thanks, Eric. Good morning, and thank you for joining today. 2021 was an important year of remarkable execution for us at Jones as we advanced our two wholly-owned proof-of-concept stage clinical programs, JTX 8064 and Bopratilumab, advanced our fifth internally-derived development candidate into IND enabling studies, and continue to drive exciting new programs from our discovery engine. We anticipate 2022 to be a pivotal year as we look to report clinical data from innate and select and advance our discovery pipeline. Our teams continue to stay focused on making a significant positive impact on the lives of cancer patients, especially in the settings where patients have few therapeutic options. On that particular note, As the use of PD-1 inhibitors continues to grow and expand into earlier lines of therapy, including non-metastatic settings, the size and scope of the PD-1 inhibitor resistant market continues to grow. While recognizing the important impact of PD-1 inhibitors, more patients are resistant to the therapy than benefit from it. In many tumor settings, the only next option for these patients is either chemotherapy, which is not particularly effective, or an experimental therapy. We believe PD-1 inhibitor resistance defines one of the most challenging problems as well as opportunities in IO research. Scientific data continues to mount that specific immune cell types, myeloid cells as an example, may be key to the mechanisms of PD-1 inhibitor resistance. This highlights the importance of our translational science platform whereby we are able to interrogate and deconstruct the complexity of all the immune cell types in human tumors, allowing for a systematic way to prioritize discrete cell type associated mechanisms. As such, our efforts into the myeloid system have led us to the low receptor, or ILT, family, with LIL-RB2 in the lead. JTX 8064 blocks the function of low RB2 or ILT4 on tumor-associated macrophages and other myeloid cells and aims to convert immunosuppressive macrophages to an anti-tumor state and initiate T-cell responses. We believe it may create a bridge between the innate and adaptive immune systems. This is something T-cell checkpoint inhibitors cannot do alone, and the science tells us it may result in the potential to reverse PD-1 inhibitor resistance. We've stayed true to our initial scientific mission of investigation, discovery, and development of therapies that target different cell types in the tumor microenvironment. And our growing pipeline reflects this differentiated approach. We believe this is the best way to bring a positive impact to the particular challenges that cancer patients face. As we reflect on the highlights of 2021, we began the year with the initiation of the innate trial of JTX8064 in dose escalation as monotherapy and in combination with our PD-1 inhibitor, chemovalimab, or PIMI, in advanced solid tumors. In April, we presented the preclinical data at AACR, which supported our thesis that JTX8064 has the potential to reverse PD-1 inhibitor resistance. In June at ASCO, our teams presented trials-in-progress posters on INATE, as well as our Phase II select clinical trial. Also in June, we earned our first milestone payment of $25 million under the Gilead License Agreement with the FDA clearance of the IND of GS1811, formerly JTX-ATE11, an anti-CCR8 antibody. We also announced continued pipeline expansion with the addition of two new programs targeting LIL-RB4 and LIL-RB1 at our R&D date. In October, we announced the completion of both the mono and combo dose escalation portions of the innate study. We initiated the mono and combo expansion cohorts at the recommended phase two dose of JTX8064. Currently, there are eight Phase II tumor-specific expansion cohorts ongoing, one monotherapy, and seven combination therapy cohorts that make up the innate trial. It's our intention to announce a meaningful body of data from the innate trial this year. We've also continued enrollment in our randomized Phase II proof-of-concept trial of volpratilumab, or Vopra, in combination with PIMI. The SELECT trial is a randomized phase two study and on small cell lung cancer with a stringent biomarker selection of patients that we believe to be the most appropriate for both the VOPRA and PD-1 inhibitor mechanisms. It's a direct result from learnings from our clinical trials, and we believe best position in io-naive patients. We expect the clinical data readout from the full trial in the second half of this year. Our discovery team has advanced our new LRB4 program, now called JTX1484, into IND-enabling studies, and we are targeting an IND submission for this program in 2023. Our discovery engine continues to target the low-receptor family and other myeloid-based targets, as well as creating additional opportunities from other immune cell types. We're also excited by our new efforts to leverage our robust discovery of highly specific antibodies into the discovery and development of rationally designed bispecific and multispecific antibody formats, which may ultimately further enhance clinical benefit. We ended 2021 in a strong financial position and are situated to fund jounce past the proof of concept inflection points of innate and select while continuing our robust novel discovery efforts identifying and progressing new mechanisms. 2022 is expected to be an important year for John's and for the patients we hope to help. We head into the year with the momentum of both the innate and select proof of concept trials and expect data from both trials this year. I'll now turn the call over to Beth to provide a clinical pipeline update.

Thanks, Rich, and good morning. I'm extremely pleased at the progress we have made in both our innate and select clinical trials in 2021, and I look forward to updating you as we continue to advance both trials this year. Let's start with the innate trial of JTX8064, our LIL-RB2 inhibitor. Last year, we completed the Phase I dose escalation for both monotherapy and combination with PIMI, selected 700 milligrams as the recommended Phase II dose, and initiated the Phase II expansion cohorts for both mono and combination treatment in seven different indications. Each of the expansion cohorts is a Simon II stage design. Once we enroll the first stage of the Simon II stage, cohorts must meet pre-specified response criteria before further expansion. Once the pre-specified criteria has been satisfied for an individual cohort, enrollment of additional patients in the second stage of that cohort may commence. The monotherapy cohort can expand to up to 47 patients, and each of the combination cohorts can expand to up to 29 patients. We selected seven different tumor types, starting with the biology of LIL-RB2 and focusing on those that have a high percentage of immunosuppressive macrophages. The next steps in our indication selection process were an examination of the unmet need and evaluation of opportunities across three major groups of patients. The first group is PD-1 inhibitor naive patients who have tumors for which there are approved PD-1 or PD-L1 inhibitors where some patients achieve durable clinical benefit, but there is still much room for improvement. Developing JTX8064 in this setting would give us the opportunity to treat frontline patients in combination with PIMI or approved PD-1 inhibitors, and we are starting with PD-L1 positive frontline head and neck squamous cell carcinoma in innate. The second group is PD-1 inhibitor naive patients who have tumors for which there are no PD-1 or PD-L1 inhibitors approved and because they have generally not demonstrated much efficacy to date. If JTX8064 can reverse this type of primary resistance, a combination with a PD-1 inhibitor could make immunotherapy a therapeutic option in this area of high unmet need. This also represents an opportunity for JTX8064 plus our PD-1 inhibitor, PIMI, due to the lack of approved PD-1 inhibitors in these tumors. The tumor types in this group that are enrolling in innate are third and fourth line platinum-resistant ovarian cancer and two subtypes of sarcoma, second to fourth line undifferentiated pleomorphic sarcoma and liposarcoma. The third group is patients who are PD-1 inhibitor experienced and whose tumors are now PD-1 inhibitor resistant. This represents a large and growing area of unmet need in which a drug that reverses PD-1 inhibitor resistance could make a great difference for patients since chemotherapy is the predominant and not very effective standard of care. Importantly for Jounce, there are no approved PD-1 or PD-L1 inhibitors in this patient population, giving us the opportunity to develop two wholly-owned Jounce products, JTX-8064 and PIMI, as a combination approach. We opened four expansion cohorts in this group, in second and third line cutaneous squamous cell carcinoma, second and third line non-small cell lung cancer, second and third line clear cell renal cell carcinoma, and second to fourth line triple negative breast cancer. We have recently opened a new cohort in this patient group, adding second and third line PD-1 inhibitor experienced head and neck cancer. Addition of a PD-1 inhibitor experienced head and neck cancer cohort will add valuable insights to our understanding of the tumor microenvironment and the role of JTX8064 in both PD-1 inhibitor-naive and experienced patients with the same tumor type, and will also address an area of high unmet need. This PD-1 inhibitor-resistant category of patients represents a growing and severe unmet need, an opportunity for both of our antibodies in the combination to continue to approval upon positive results, and follows an initial clinical signal from a third-party antibody. Staying true to our focus on high unmet need in INAT, we have decided to close the triple negative breast cancer cohort for now. The pace of enrollment in TNBC has been much slower than in the other cohorts, and investigators have told us that they no longer have many patients who meet the eligibility criteria for INAT. This is due to a change in the treatment paradigm since INAT started, related to the unexpected withdrawal of Dicentric's frontline accelerated approval in the U.S. and approval of Tredelvi in second- and third-line triple negative breast cancer. With the addition of the PD-1 inhibitor-experienced head and neck cohort, we maintain four cohorts focused on PD-1 inhibitor-experienced patients with a high unmet need. We have included all three categories of patients in our expansion cohorts, to determine the best opportunities for JTX8064 to make a difference for patients with cancer. As part of the trial, we will be evaluating pharmacodynamic biomarkers and we'll also be collecting data on archival and pretreatment tumor samples to identify potential predictive biomarkers. The findings will help us guide further development and are an important part of Johnson's philosophy of providing the right immunotherapies for the right patients. We are pleased with the pace of enrollment and are on track to report preliminary data from INAT in 2022. Therefore, our intention is to obtain sufficient enrollment and clinical data prior to providing specific guidance on data timing in 2022. We are frequently asked about the scope of data that we expect to present this year from our INAT trial. Our intention is to provide a robust, meaningful, and interpretable data package. This will include complete Phase I monotherapy and combination dose escalation data, including the respective safety PKPD biomarker and preliminary efficacy data. In addition, we expect to include safety, preliminary efficacy, pharmacodynamic, and potential predictive biomarker correlative data from at least the first stage of the Simon 2 stage from multiple Phase II expansion cohorts, both on an individual cohort basis and in a cross-cohort analysis. Now, on to our other Phase II program, VOPRA, as a select trial, our randomized Phase II proof-of-concept trial of VOPRA, our ICOS agonist. We are studying VOPRA in combination with PIMI, compared to PIMI alone, in approximately 75 biomarker-selected patients with metastatic non-small-cell lung cancer who are PD-1 inhibitor-naive and have progressed on a platinum-based chemotherapy regimen. The key feature of this trial is the predictive biomarker selection of patients utilizing TIS-VOPRA, an 18-gene signature that includes genes relevant to both PD-1 CD8 and ICOS CD4 T cell biology. Only patients with a value above the biomarker threshold are enrolled, and the trial is powered to show the statistical superiority of VOPRA plus our PD-1 inhibitor, PIMI, versus PIMI alone. As a reminder, the primary endpoint is the change from baseline in tumor size averaged over 9 and 18 weeks. We chose this endpoint because we believe it may be a better predictor of overall survival than resist response criteria in early studies, and because as a continuous variable, it provides the opportunity for statistical significance with a smaller number of patients than the categorical variables of resist. It is also uniquely suited to immunotherapy, in which durable tumor reductions can lead to long-term clinical benefit. We will provide more insight into interpretation of the primary endpoint as we get closer to data readout. We will also be reporting secondary endpoints, including overall resist response rate, progression-free survival, overall survival, and duration of response, to help with interpretation of the data in the context of more familiar endpoints. A positive result in SELECT may lead to biomarker-directed development in multiple potential tumor types. We look forward to reporting the clinical data from SELECT and providing guidance on next steps for VOPRA and TIS-VOPRA in the second half of 2022. As many of you know, SELECT is enrolling in Russia and countries in Eastern Europe, including Ukraine. We have some active patients and sites in Ukraine and are in regular contact with our study personnel in Ukraine. Our thoughts are with the patients, their families, and those who provide their care as they navigate this tragic situation in the Ukraine. Our first priority is to make sure that patients are able to receive their study treatment. As of now, we do not believe there will be an impact on timing of the select data readout, but there may be an impact on the data if patients are not able to complete all planned study visits. We will continue to monitor the situation very closely. I would like to take a moment to thank our valued investigators and, most importantly, the patients who put their trust in our medicines to make a difference in their lives. I would also like to thank our team at Jounce and their dedication to advancing these critical programs. We look forward to reporting on our continued progress this year. With that, I will now turn the call over to Dimitri to discuss our ongoing discovery efforts. Dimitri?

Thanks, Beth. We focus on the utilization of our translational science platform to address the problems that patients with cancer are facing today. namely resistance to T-cell checkpoint inhibitor therapy. We believe that our ability to dissect the tumor microenvironment at the molecular level using immune cell type-specific gene signatures will lead us to targets that may be important for overcoming resistance to checkpoint blockade. A growing body of data points to suppressive myeloid cells, including tumor-associated macrophages. and their contribution to resistance to PD-1 or L1-directed therapies. JTF-8064, which targets immunosuppressive macrophages and other myeloid cells in the TME, serves as an example of our patient-centric, biomarker-driven approach in discovery and through development. This approach is key to the value-generating programs we are pursuing. We're very excited about our discovery activities and have announced our most recent advancement, having selected JTX1484 as our newest development candidate. IND enabling studies are well underway, and we hope to submit an IND next year. JTX1484 binds to and inhibits LRB4, ILT3, another LRB family member, that is highly expressed on some of the key myeloid cells, including myeloid-derived suppressor cells and telogenic dendritic cells that orchestrate immune suppression in the TME, including resistance to checkpoint inhibitors. The LUL-RB4 target is distinct from other LUL-RB family members with respect to its ligand specificity as well as temporal and spatial pattern of expression on immune cells. Therefore, we see this program as complementary to our ongoing efforts to target LRB2 with JTX8064. Our pipeline of monospecific LRB-targeted antibodies is further strengthened by the ongoing efforts to develop potent and specific blockers of LRB1, an inhibitory receptor that is expressed not only on myeloid cells, but also on certain subsets of T and NK cells. Having these high-quality building blocks to target three important members of the LLRB family has enabled us to explore multi-targeted approaches preclinically by leveraging our knowledge and growing expertise in LLRB biology. We are confident that the LLRB family, as well as other targets that we are currently pursuing, represent attractive opportunities in immuno-oncology. with the potential to improve upon and restore responsiveness to PD-1 or L1 inhibitors. I will now turn the call over to Kim for a discussion of our fourth quarter and year-end 2021 financial results. Kim?

Thank you, Dimitri. As we reported in this morning's press release, we ended 2021 with cash, cash equivalents, and investments totaling $220.2 million, compared to $213.2 million as of December 31, 2020. The increase in cash and cash equivalents and investments was primarily due to the receipt of $90.9 million in net proceeds from the following public offering and sales under our at-the-market offering program completed in the first quarter of 2021 and receipt of a $25 million milestone from Gilead in the third quarter of 2021, offset by operating expenses incurred. Turning to the P&L, license and collaboration revenue was $26.9 million for the full year 2021 compared to $62.3 million in 2020. Revenue recognized during 2021 was related to the Gilead milestone achievement and completion of revenue recognition related to the Gilead upfront license fee. Revenue recognized during 2020 was related to the Gilead upfront license fee. Research and development expenses were $89 million for the full year 2021 compared to $78.7 million in 2020. The increase in research and development expenses in 2021 was due to $5.1 million of increased expenses primarily associated with manufacturing activities for our development programs, $2.9 million of increased employee compensation costs, and $2.6 million of increased clinical and regulatory expense primarily attributable to our innate and select clinical trials. General and administrative expenses were $29 million for the full year 2021 compared to $28.8 million in 2020. The increase in general and administrative expenses for full year 2021 was primarily attributable to increased administrative costs. Net loss was 90.9 million for the full year 2021, resulting in basic and diluted net loss per share of $1.82, as compared to the net loss of 43.8 million for the full year 2020, resulting in basic and diluted net loss per share of $1.24. The increase in net loss and net loss per share was attributable to increased operating expenses and reduced revenue recognized under the license agreement with Gilead during the year ended 2021 as compared to 2020. Based on our current operating and development plans, we reiterate our financial guidance for 2022. We continue to expect gross cash burn on operating expenses and capital expenditures for the full year 2022 to be approximately 115 million to 130 million. Given the strength of our balance sheet, we expect existing cash, cash equivalents, and investments to be sufficient to enable the funding of our operating expenses and capital expenditure requirements through the third quarter of 2023. We continue to have the financial flexibility to drive our innovative immunotherapy pipeline while efficiently executing against our strategic plans and goals. With that, I'll hand the call back to Rich for final comments.

Thanks, Kim. The combination of our experienced team, innovative science, and financial resources puts us in a strong position to move beyond the next set of inflection points and continue to execute our strategic plans. Johns continues to focus on patients first, and we're proud of the IL pipeline we're building to address the growing unmet medical need faced by cancer patients. In summary, we look to address multiple large market opportunities driven by a productive discovery engine. We've built a compelling pipeline with next generation IO agents and continue to develop additional therapies addressing the significant unmet needs of cancer patients. Importantly, we have several important catalysts coming up in 2022 and the financial strength that's underlying our ability to take these through the inflection points over the next few years. Before closing, I'd like to take a moment to recognize the efforts our team makes every day and congratulate them on the advances we've made across our pipeline in 2021. We look forward to updating you on our programs as the year progresses. With that, we would like to now open the call for your questions. Operator?

Thank you. Ladies and gentlemen, if you'd like to ask a question at this time, you will need to press the start and the one key on your touch-tone telephone. To withdraw your question, you may press the pound key. please stand by while we compile the Q&A roster. Now, first question coming from the lineup, Ted Tenthop with Piper Sandler, Yolanda Salfin.

Great. Thank you very much, and I appreciate your comments about what's going on around the world. I hope you're all keeping well during these crazy times. Looking forward to a really busy year for you guys. I wanted to get a little more color, not to focus on the TMBC, but Just to get a sense and make sure that I'm understanding correctly, so we now have seven cohorts that are enrolling in NAIT. And, Beth, I appreciated your commentary about the fullness of data that you hope to present. Would that be at a medical meeting? Would that potentially be at an R&D day, just because it sounds like there's going to be a lot of data to unpackage? Thank you.

Sure. Thank you very much for the question, Ted. First of all, we have seven combination cohorts actively enrolling and then the monotherapy cohort in ovarian cancer as well, so eight total. Our preference is, yes, always to present at a medical meeting. We are on track for having all of the data that I described this year. As you mentioned, it is a lot of data. It's the entirety of the dose escalation data for mono and combo, and then importantly, safety, efficacy, and the biomarkers for at least the first stage of multiple expansion cohorts. So we believe it will be a meaningful body of data, and our goal is to present something that's really interpretable. so that people can see, you know, oh, okay, I see what this drug is doing. Did that answer your question?

Sorry, just to confirm, so did you discontinue TNBC then, and does that mean you failed?

Oh, yes, yes.

I'm just trying to make sure I understood correctly.

Yeah, so we had seven combination cohorts, and we decided to... stopped the triple negative breast cancer cohort for now, and we have added a PD-1 experienced head and neck cancer cohort. So we still have four cohorts enrolling in patients who are PD-1 inhibitor experienced. And the head and neck is actually really interesting. It's because of the standard of care changes in treatment paradigms for triple negative breast cancer, It just didn't seem that there was quite as much of an unmet need there, but there's a huge unmet need in PD-1 experienced head and neck cancer. And so, you know, we decided to open that and that will give us the opportunity to look at the tumor microenvironment in both PD-1 naive and PD-1 experienced patients and look in the same tumor type and be able to look at the efficacy in two different lines of therapy in the same tumor type. So we think it will be a really nice addition to the study.

Yep, awesome. That's super helpful, and I understand clearly. Thank you. Thank you.

Our next question coming from Delana Boris-Peaker with Colin Yelanis-Alpin.

Great. My first question is on 8064. Can you comment how different or similar it is to Merck's 4830, and what can we learn from the Merck drug to date in terms of their expansion, in terms of their, those expansion arms to your strategy?

Sure. Oh, go ahead. Yeah, yeah. Hi, Boris. Yeah, sure. Yeah, so just in terms of how we look at the antibody and the, both antibodies and their properties, And this is really looking at our data that we've put up on posters and presented, as well as separately looking at MK4830 that's been up on separate posters. So we continue to describe the antibodies as... You know, more similar than different in the sense that there's a particular region of the receptor that's involved with interaction with the ligands, and the purpose of the antibodies, of course, is to inhibit that interaction. So that's very common in terms of what each of these antibodies is intended to do. They're both IgG4. These are straight-up blocking antibodies. We're trying to block this interaction, not impart effector function through the FC. So, you know, we have noted in our studies as we look at, you know, potency curves and where we hit the kind of plateau in terms of the dosing, you know, there may be some – maybe there could be some opportunities for differentiation there. But generally speaking, we see, you know, similar properties, more similar than different. So moving to the ongoing trials, you know, there's a, as we see it from the outside looking in, you know, considerable continued expansion of studies off of the Phase I of MK4830. That's, of course, in combination with Katrina, and those coming off that kind of phase one, we're continuing into 13 expansion cohorts that we're tracking. In addition, and again, to us, this is, you know, monitoring this carefully, there's the phase two studies that now are being set up that 4830 is kind of participating in, So that's also in combination with Keytruda. And there are, you know, multiple of those, I believe now seven of – I'm sorry, eight of those that have an arm of MK4830. So, you know, there's a kind of continued progression as we see it. Of course, we don't know the data, but we'd be, you know, looking forward to the future here where we get another look at the Merck data as well as Jounce.

Great, thanks very much for taking my question.

Our next question coming from the line of Corey Kustamov with JP Morgan. Your line is open.

Hi, this is Kevin on for Corey. Thanks for taking our question and all the details on it. I guess we had a two-part question on 8064, the mechanism of action. First, curious if little BR2 has a higher acidity towards a particular HLA. And the TAM signature from your AACR 2021 presentation demonstrated higher RIL-BR2 expression in PD-1 non-responders. So just curious about the role of RIL-BR2 conveying resistance versus the potential of varying HLA expression levels in patients driving that resistance. Thank you.

Yeah, thanks for the question, Boris. This is Dimitri. So as we have presented in our posters, AD64 is a potent disruptor of both HLA-G binding to little RB2 as well as more classical HLAs. And we really believe this is a very important factor in restoring the ability of macrophages and other myeloid cells to effectively present antigens to T-cells. in addition to disrupting this inhibitory signaling through LRB2. And so we continue to carefully study this in the labs. And with respect to the elevated expression of LRB2 in PE1-resistant cancers, what we have found and others have also confirmed is is that the ratio of LRB2 to interferon gamma signature, which represents inherent inflammation in the tumor, is in fact a negative predictive marker for response to PD-L1 blockers. And so our hypothesis continues to be that we believe disrupting and inhibiting LRB2 would restore responsiveness to these PD-L1 checkpoint inhibitors.

Okay, great.

Thank you.

Our next question coming from the lineup, Steve Seedhouse from Raymond James, your line is open.

Good morning, everybody. Ryan Deschner on for Steve Seedhouse. I was wondering what specific types of biomarker data will be reported for the EMA trial later this year and how big of an impact the recent Omicron wave has been on enrollment in the NAVE at this point?

Sorry, can you repeat the question?

Sure, wondering what specific types of biomarkers will be reported for later this year?

Sure, sorry. So we have both pharmacodynamic biomarkers, and then we also have a panel of potential predictive biomarkers. Some of the ones that we've already mentioned have been gene signatures such as LIL-RB2 itself, our tumor-associated macrophage gene signature, interferon signatures, and then also we have IHC, for example, CD163. Obviously, we'll be looking at PD-L1. So we have quite a nice panel. I think it's one of the strengths of the study is that we're exploring so many potential predictive biomarkers, and our plan is to do analyses of the correlation of these biomarkers with clinical outcomes both by cohort and then in a cross-cohort analysis.

Excellent.

Oh, and did you also ask if COVID, yeah. So I would say, you know, across the healthcare industry, hospitals are understaffed. That's probably the biggest impact, but we're really pleased with the rate of enrollment of the trial. So I would say, you know, in general, COVID is having a, some impact, but it's hard to measure because the trial enrollment is going well.

That's helpful. Thank you very much. And then real quick, can you also comment on how you see OPEX evolving in 2022 relative to 2021? Thank you.

Okay, OPEX. So in terms of, you know, our burn this year, we projected at $115 million to $130 million, so that is an increase from the prior year where it was you know, approximately $110 million. And that increase really relates to the expansion studies we have going on with innate as well as our efforts in CMC to make sure that that's not a mitigating factor as the trial progresses. And beyond that, we continue to have a robust discovery effort, but a lot of our, you know, the majority of our expenses are really in line with our priorities. And, you know, the largest increase really has to do with innate and preparing for future studies as well as the ongoing studies.

That's great. Thank you very much. Thank you.

Our next question coming from the line of Colin Cussey with Baird. Your line is open.

Yeah, good morning. Thanks for taking our questions. So following up on a previous question, helpful comments on the comparison of Merck's antibody. I'm curious, can you speak to how you're dosing PD-1 in combination and how that compares to Merck's development plan in terms of, you know, frequency or if it's before, during, or after?

Yeah, sure. Sure. So, Pimavalimab and Keytruda are both dosed every three weeks. And, you know, we're using a dose of Pimavalimab that in our phase one study showed complete receptor blockade. So, you know, Once you achieve steady state for a PD-1 inhibitor, you have total blockade of the PD-1, PD-L1 interaction. So there's really no difference, I would say, in that respect.

That's helpful. And so are patients on PD-1 typically for the same amount of time? Like, do you have similar protocols for when they would stop receiving PD-1?

Yeah, that's a great question, Colleen. I believe in many trials the PD-1 inhibitor is discontinued after two years if patients remain on treatment that far. We've actually allowed patients to stay on as long as they're receiving benefits. So we have patients from ICONIC on over four years at this point, and we have patients from the Phase I trial of pimovalumab who have been on well over two years. So right now, we allow patients to stay on as long as they're receiving benefit. So there's no cutoff for the PD-1 treatment.

Okay, great. That's helpful. Thank you. And then for SELECT, assuming data there would be positive, what would next steps of development look like? I think you mentioned there might be potential for other tumor types that you might go into as well. If you could elaborate there.

Sure, sure. So, you know, if, as we believe, TISVOPRA, is able to select the patients who not only will have a better response to a PD-1 inhibitor, but also have an enhanced response on top of that because of BOPRA, we think there's a lot of opportunity in places where PD-1 inhibitors are approved, but there's a need for better response rates and also addition of something that doesn't add any toxicity. So we believe After SELECT, the next study will be a Phase III registration study, and, you know, we're looking at a number of different tumor types where that's possible. Obviously, lung cancer would be the most obvious one going into frontline since the current study is a proof-of-concept study in second-line IO-naive patients, but we believe the data both because we have data on levels of TIS in other tumor types and because we believe that the mechanism is not really that tumor-specific. You know, it really can be applied across a number of different tumor types, but there are many different options based on a positive select trial.

Great. Thanks for the question.

You're welcome.

Our next question coming from the lineup, Nick Abbott with Wells Fargo. Your line is open.

Well, good morning. Thanks for taking our questions. Just going back to the select trial, you mentioned the situation in Ukraine. There are sites in Belarus. There are several sites in Russia. Given the number of sites, can you say what proportion of patients are enrolled from those countries? And if you have plans to increase enrollment at sites outside those countries, In case, you know, you're told you're not, you have to start operations in those countries.

I mean... Sure. Yeah, I guess I think we're far enough along in the study, Nick, that there's not any need to open new sites or go to new countries. You know, as I said, there may be, this isn't, we don't believe this is going to affect our ability to report data in the second half of the year from this study. I would say, you know, my major concern is there may be some missing data if patients aren't able to, you know, to attend all of their visits. But we have drug in the country sufficient for now. And, you know, we think we've put, you know, really good, safeguards in place, and it's now just a matter of the patients getting to the sites.

Okay. Thank you. And then, you know, just on the end point, you provide us some guidance on, you know, how you define success on this average change in lesion size. And just to be clear, then, development of a new lesion or growth of an existing lesion over 25% still would be defined as progressive disease even if the average lesion burden decreases substantially?

Yeah, so by resist criteria, we will be reporting overall response by resist criteria. So, you know, a patient could be classified as having progressive disease even if they had a large reduction in their, you know, one target lesion. If they had growth of a new lesion in resist, that is counted as progressive disease. However, what we've heard from a lot of physicians, and we've seen in some of our trials, sometimes these new lesions are very small. They really have very little to no impact on the patient's well-being, and so many physicians keep patients on PD-1 inhibitor therapy after they are technically progressive, and then you can still continue to see very long-term clinical benefit. So it's one of the reasons that for patients an early proof-of-concept trial like this, we believe our endpoint is a better predictor, and there are papers that actually support this, a better predictor of overall survival than just resist response rate because that patient would still be categorized with their total tumor burden as having quite a nice reduction in the tumor. And we believe that that's what's most important, the overall tumor burden for the patient and particularly in I.O., where the responses can be so durable. So we think it's a really good endpoint for I.O. and, you know, should be a better predictor of survival than just a resist response rate.

Okay. But moving to innate, you're using, I'm not sure, actually, if you did say what the stage one endpoint is for enabling that. more traditional or the same metric?

Sure. So in innate, we are using resist response rate. The end point in select would not really be that useful in a single-arm study. You know, it's appropriate for a randomized study like select is. And we also chose it because it's a continuous variable, so it allows us to get statistical power with a much smaller sample size. Now, in innate, you know, this is our first study with this drug. We're using all the traditional endpoints. You know, the Merck data using resist response rate was encouraging, so we believe that that's appropriate at this stage in time.

Okay, great. Thanks, Beth.

Thank you.

Our next question coming from the line of Jack Bejalo from Broad Capital Partners. Your line is open. Thank you.

Good morning. Thanks for taking my questions. I just wanted to ask a couple of quick things based on the updates provided.

I think the first for us is as you're thinking about the efficacy of AD64 across the various tumor types, I know the tumors were selected based on the existing myeloid cells present, but we're just kind of wondering how much consideration is probably given to the T cell signature because, you know, back to the play, I mean, you won't then the potential to kind of achieve some sort of tumor reduction?

Yeah, that's a great question, Zegza. Thank you. So our selection of the tumor types was based on a composite ranking that included not only LIL-RB2 and the tumor-associated macrophage signature, but also interferon gamma. So exactly for that reason, we do believe that, you know, particularly when we're developing it in combination with a PD-1 inhibitor, that that T cells are going to be an important part of the equation as well. And so we'll be looking at those predictive bio, all of those gene signatures also in our analysis of potential predictive biomarkers.

Perfect. Thank you. And then just a follow-up here as well. Just regarding the involving treatment landscape in oncology, I was just wondering, you know, how are you thinking about the benefits of even pursuing a monotherapy option versus just going forward with the because I imagine that they'll probably be better, you know, based on what we've seen. And then just also kind of a follow-up to that as well, and as you're thinking about the time to respond for a single agent versus a combo, do you expect there to be a difference based on the mechanism of action?

That's an interesting question. You know, I think it's clear from the cohorts in our study that we are placing the greatest emphasis on combination therapy. You know, we have seven combo cohorts and one mono cohort. We felt it was worthwhile to explore monotherapy. Obviously, a significant benefit there, significant clinical benefit would be a home run and would be the fastest path for us to get the drug approved as a single agent. Also add to proof of concept, However, we really do believe the future is in combination therapy, so that's why seven of the cohorts are combination therapy. With respect to the time to response, so I don't know how that, I don't have any data to suggest how that would differ between mono and combo. but we did note that many of the responses in the MK4830 study, actually the first response occurred not at the first CT scan but at the second CT scan, and that could be consistent with, you know, taking a little more time for the macrophages to actually get activated before the T cells are then activated and working.

Thanks, Beth. That's what I was thinking. And then, Rich, you know I love combos, obviously. So I've been asking about when are you guys going to do more combos, even with the programs you have. But you also mentioned perhaps wanting to pursue bispecifics or trispecifics. And so I was wondering how you're thinking about the advantage of that or advantages of that relative to just doing the combo strategy. And then maybe you can comment on some of the targets that you might consider and then maybe leveraging some additional insights. How are you guys going to go about picking those combinations?

Yeah, sure, Segba. Thanks for that. Yeah, we're really excited about using kind of what we are referring to as kind of our highly specific kind of building block binding sites from the model-specific agents, which deserve their attention. own path forward, and then formatting that into the by and multi-specifics, but ones that really hit a certain kind of criteria that we're shooting for. So let me hand that to Dimitri to continue that answer.

Yeah, thanks for the question. You know, this is a very active area of investigation for us. You know, we are exploring a variety of partners for LLRB targeting arm in a multi-specific, including, you know, different LLRB family members, but also other both well-characterized as well as novel targets in immuno-oncology. So, again, a very active area. When we have more data, we would be more than happy to share with you. I think as Rich said, you know, we've established a fairly stringent criteria for the advancement of our multi-specific and this is what's being tested in the labs as we speak.

And as a reminder, ladies and gentlemen, to ask a question, please press star 1. Our next question coming from the line of Ramakan from H.C. Winwright. Your line is open.

Thank you. Good morning, folks. A couple of quick questions. The first one is on 1484. Just trying to think about preclinical data presentations during 22. Should we expect anything at, you know, at AACR or any other conference down the year? And also, in terms of getting ready for the IND filing in 23, what sort of work needs to get done still so that you'll be able to file that IND?

Yeah, thanks very much for the question. As we said, we're very excited about having advanced 1484 now into IND-enabling studies. They're all underway, as you can imagine. It's a fairly typical set of studies that we're conducting, assessing safety, further developing our biomarker strategy, and developing clinical plans for 1484. So all of this is ongoing. We do plan to present preclinical data on this molecule later this year, most likely. It's one of the fall scientific meetings, and really looking forward to that. We believe this target is important and is quite distinct from BIL-RB2, As we mentioned in our presentation this morning, it binds to LLRB4, which is highly expressed on these myeloid-derived suppressor cells and telogenic dendritic cells. And signatures of these cell types have been detected in a significant proportion of PD-1, PD-L1 non-responder population. So we do believe this could be one of the mechanisms overcoming resistance to PD-1, PD-L1 inhibitors.

Thanks, Dimitri. The second question is on the discovery engine. I know you have stated that every 12 to 18 months, but I'm just trying to understand how soon should we expect another curtain raise and also what sort of targets would you be going after?

Yeah, that's a great question. So we did disclose at our R&D day last year, RK, that we have also an active program targeting LULARv1. We briefly touched on this target this morning. We believe it to be very exciting because it takes us outside of the realm of the pure myeloid biology and into subsets of lymphoid cells, T and NK cells, potentially even B cells, which could be very important to antitumor immunity. So this program is advancing well. Once we have further updates, we'll certainly share them with you. And, you know, I think as we also said during R&D day, we continue to apply this unique approach of dissecting the tumor microenvironment using our proprietary gene signatures, focusing on specific immune cell subtypes. And, you know, again, a little bit probably too early for us to share more at this stage, looking forward to describing these programs and exciting targets in the future. Thank you.

Thank you. Thanks for taking my questions.

We are currently showing no remaining questions in the queue at this time. Ladies and gentlemen, that's the conference for today. Thank you for your participation. You may now disconnect.