Molecular Partners AG

Good day and welcome to the Molecular Partners Publication of Full Year Results 2022 Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on a touch-tone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Seth Lewis, Senior Vice President of Investor Relations. Please go ahead.

Thank you, Betsy, and welcome everyone to the Molecular Partners 2022 Full Year Results Conference Call. My name is Seth Lewis, Senior Vice President of Investor Relations, and I'm joined today by Patrick Amstutz, CEO of and Robert Hendricks, Senior Vice President of Finance. If you have not had a chance to see the press release issued yesterday evening highlighting these results, it can be found on our website, www.molecularpartners.com. Before we begin, I would like to remind you that this presentation contains certain specific forward-looking statements, beliefs, and opinions. Such forward-looking statements are subject to known and unknown risks, uncertainties, and other factors which may result in a substantial divergence between the actual results, financial situation, development, or performance of Molecular Partners AG and investments, and those explicitly or implicitly presumed in these statements. If you haven't accessed this morning's presentation, it can be found on our website, molecularpartners.com, under the Investors tab, News and Events, and Presentations tab. If you're listening to this on replay, this call was recorded on March 10, 2023. Please refer to our latest news and filings as results may differ in the future. With that, I will pass the call over to Patrick Amstutz. You may begin.

Thanks, Beth, for the nice intro and making everybody aware how it goes. So we'll start with a few slides. I will then hand over to Robert, and I will summarize with an outlook and then open for questions. And I think that's the reason for the call, that we can get your questions. So a warm welcome and an exciting call for us, as we will have the backward-looking and the forward-looking into 2023. Thanks also Seth for pointing out the disclaimer. I ask that I'm just off the plane, so a bit of jet lag, so any unclearty I would assert to that jet lag.

So hopefully I didn't put you to good side. I didn't make you fall asleep too bad.

You did not, and I'm back from the Cowen conference, so also a good chance to maybe follow up in the Q&A a bit on investor sentiments, the questions we're getting. and how we present also in the field with other biotech. But let's kind of first zoom out and kind of what is this all about. It's the breakthroughs of tomorrow that link back to the company purpose, building value for patients where value today is not possible. And so we have invented the DARPIN technology to bridge the gap between the small molecules and large molecules And we have validated the DARPEN approach in over 2,500 patients with seven clinical stage compounds. And I think it is important to stress that, that this is a proven technology and that all of these compounds, one, not yet because it just went in, but six of those are really showing the exact activity in patients that they were designed for by our protein engineers and biologists. What is our strategy or how do we apply it? We have a very high bar on the unique DARPN solution. You can also call that differentiation. So every product we make should solve the problem that is not easily addressable with other technologies. The second is the true patient value. That's clear. I mean, we want to solve a meaningful problem and we want to see an early clinical readout. The early clinical readout goes to the return on the investment because if we don't see it, we can stop it. And that was one of the learnings that some of the earlier programs did not have that built in and led us then to also the ungood moment that we had to stop programs for strategic reasons as we could not further invest in them. That's where the partner comes in. We have and will partner and always to generate patient value. for products that are not best in our hands, but where we see the value and where a partner can help us bring it forward. It can be early partnerships, it can be biology partnerships, it can be technology partnerships where the payload, let's say a radionuclide to a darpin, we all classify that as partners, and we are always open to partner to bring our breakthroughs forward. Now I'm going to slide number four that gives you an overview of how we think or structure our approaches. In the center of this picture you see a DARPIN and what I like to say the DARPIN is a therapeutic modality. It's not in itself a platform. It is larger than the platform. But we have built sub-platforms and there's different ways you can classify. The way we like to do it is On the one hand, the multi-DARPIN platform where we have 533 or also in Solibet, our COVID DARPIN was part of that. Then we have the radio DARPIN therapy platform. That's something I will also talk about. And the newest addition is the switch or the either or or gating platform that we have built. And that's sort of the basis for then the product and the candidates that we move forward. Let's move to the candidate level and look back, look into 2022. I would like to start with, let's say, the poster child of last and this year, and that is 533. It's a novel tri-specific T-cell engager in AML. We have those, the first patient, and we have a lot of preclinical data that supports the mode of action, and we will also generate more of that. I will have a slide later on and also touch on it in the outlook. MPO317, that's the local CD40 agonist, proud to say that we have the safety that supported dose escalation. We're now at the highest dose and have not found any dose-limiting toxicities supporting the mode of action of local immune stimulation over systemic immune stimulation. Then a platform. So here we have not yet defined a candidate. While we have defined the first target for us, But it's done with a Novartis collaboration with two targets. And in their radiodarpan therapy platform, that's where it's all about reducing kidney uptake, as that is for many protein-based approaches or even peptide-based approaches, the dose-limiting organ, the problem zone. So if you can reduce the kidney uptake with a high tumor uptake, you are in business. Virology here is open-ended. A year ago, we were very heavily invested in virology. And so we bet that actually had great data, right, a year ago. Went to EUA, but then we all know that from variants of SARS-CoV-2 virus came along and made the medical need much lower. So that program is quasi on hold. hopefully not ever to be used but would only be used if a new variant of higher virament would appear again. At the same time it did open the path for discussions with Novartis and we have a letter of intent to look into a research framework agreement also to establish pandemic preparedness. Next slide. In a way, the similar overview. So you see here the stages, the programs, this is the pipeline view. We will talk about 317, 533, the DARPA platform, virology I did touch on, and the immune cell engagers you can put equal to the switch platforms as those are likely going to be switched. So that's an area of activity on switch. We also have the BICIPAR and Insolvibet. We list them below the active pipeline. We see them as options, optionalities that can happen, but we are not building on them as the future basis of the company. Let's take the time and just quickly talk through our key few programs that will be of interest in 23. I'll start with 533 in AML. What is the problem in AML? And AML is one of the most deadly liquid cancers that there are, liquid tumors, they are. The problem in this disease is there are no clean targets like CD20 or CD19 on B-cell malignancies, but there are targets. And you see three of them here, CD33, 70, and 123 or 123. The problem of these targets is that they are also expressed on healthy cells. But our scientists found that they could, with a lot of bioinformatics work in many databases, establish that mostly they are co-expressed, three of them or at least two of them. So what we built is a tri-specific T-cell engager with long half-lives. And this will kill preferentially the dual and triple expressors, but not the healthy cells with mono-expressing one of these targets. This phase one is ongoing, and we are extremely kind of pushing forward to get the results. We're guiding towards more the second half, first safety, but also initial efficacy. And let me point out, we do expect on this one that we will see single agent activity. We added the preclinical work support further development, so that is maybe a bit cryptic, but you can think if the first phase one looks good, you will want to go into different settings, different lines, also different combinations, so that line is hinting to additional work we're doing also for combination settings pre-clinically. Moving to slide eight. Here I'll speak about 317. It's CD40 by SAP. CD40 is a new stimulating target. It activates the immune system. It, in simple terms, could turn a cold tumor into a hot tumor. And when targeted systemically, meaning with systemic antibodies, you get those limiting toxicities. So the highest dose you can reach is still below one milligram per kilogram. We have built a molecule that is SAP gated. It goes to the tumor, it localizes, it clusters, it locally activates. We are now in our highest dose, far above the antibody doses, even with smaller size. So the molar dose is like 30 times higher at least than what you see with antibodies. And we don't see the toxicities. So it seems that this texture really solves that problem. We have presented data showing localization, initial data on activation. We'll do more of that, complete the dose escalation, and then, depending on the data, obviously, enter partnering discussions. Here, I would also point out the indirect value inflection point, as Roche has a similar molecule. I'll also come to that in the outlook. And the data of the SAP 10 CD40 of Roche will obviously have an impact on this one. If that data looks good, obviously there is a cross-validation of the mode of action. Let's go to slide number nine. Now I'm a bit in the conceptual part. So here you have a cartoon. You see three DARPins. You have a green DARPin that targets the tumor antigen. You have a blue dark pin that is an effector function, in this case CD3, and you have a gray dark pin that has two binding sites. It was made from two dark pins, actually a yellow and the dark blue one, and they were put together into this gray dark pin that is now called 2-in-1. The blue part binds the CD3 dark pin and with a very low affinity, but a high local concentration of the linker. You can think of the blue dark pin and the blue part of the gray dark pin as on-off, on-off very fast, but mostly off in circulation. So if on healthy cells, you would even find the target, the green target, nothing would happen as your CD3 is off. If you're now in the tumor, the green dark pin will accumulate this drug in the tumor. There is a yellow antigen, The gray darpin with its yellow binding site will bind the yellow antigen, release the blue because there cannot be simultaneous binding, and with that, set that activity free and recruit T cells for local pilling. For us, this is the first time we have seen or this has ever been described as such a mechanism. All others rely on protease cleavage like Cytonix. They were a pioneer in this local activation field. This is entirely based on binding, and we're excited to move this forward with one or two programs and also in our pipeline. With that, I'll switch to radiodarpin therapy. This is, let's say, a link to radioligand therapy, but we want to expand the ligand space with the darpin space, so ligands can maybe target a set of targets that are on tumors, but DARPNs can expand that set dramatically. It started with a collaboration with Novartis, as they are the leader in the field, and with us, recognize the potential of DARPNs as delivery agents or vectors. We did a deal a bit more than a year ago with the 20 million upfront, 560 million in potential milestones, and double-digit, up to double-digit royalties. And this is for two targets. So two targets are exclusive for Novartis. At the same time, there's many more targets out there. And one of those is DLL3 and that's what we have selected for our first in-house target. And we are expanding to additional targets. The second one is being done and more are being evaluated. And as we don't have the radio ligands or the radionuclides at our disposal. So we are looking into partnerships to get access and partner with companies that have radioisotopes. Also, this will be one of the activities that you will see this year, and we definitely want to sign one or two agreements with these companies. Let me show you some data. We wanted to make sure that our investors know off. Last time I presented, that was the red part. That was at JP Morgan and we did show that. And what you see here on the left-hand side is the kidney and the bars should go down. Lower bars are better because it shows how much of your drug is in the kidney. Lower is better. You see the solid, the red solid, that's the parental darpin. Then you have the striped red, that's a different approach, on top of cells. That's now blue. And it again reduces by 60%. So we are working on a suite of ways to reduce kidney cancer. They are additive treatments. At the same time, if you look at the tumor side, you see the tumor accumulation stays the same, so we have no impact on that. So what we're doing is we are moving the tumor to kidney ratio into a favorable direction. And now switching a bit here, going from science to corporate sustainability. And corporate sustainability is, maybe a large abstract word, but it is something that we at molecular partners always live. So our company is almost 20 years in existence and really with this purpose drive and this understanding that we want to do good for patients. We want to do good for society. We want to do good for the world. ESG or corporate sustainability was always part of our culture. and in our DNA. And now with the, call it a bit newer trends of ESG and reporting, we went back and we really were able to bring out what we always have in the company. And it also is very much carried from our employees. So this is not just a tick box exercise, but it really makes visible what is here. And you see there the different pillars that we're moving forward. And some of them, like human capital management, I mean, for us, people, talent, that's our coworkers. It sounds a bit dry, but for us, it's not. But those are the titles that one uses in the ESG exercise. But believe me, these titles are really full of life and full of passion for our coworkers. And the same is for access to medicine, for product safety, service and safety, business ethics. These are really dear and core to our hearts. And we fill them with life at molecular partners. And it is really that what also makes up our culture. So for us, this slide is not just a dry tick box slide. It really shows what is dear to our heart, where we also are willing to show what we're doing and kind of be a role model for the industry. With that, I'll pause. I'll hand over to Robert, who will lead us through the numbers. I think he also said an exciting year that we had, and happy to hear him talk about the numbers.

Great. Thank you, Patrick. Currently on slide 13, just to discuss some of the basics here, the numbers that we will present will be stated in million Swiss francs. Of course, the rest of the details will be in the press release, as well as in the appendix of the presentation, and the presentation is clearly also available on our website. To finish this one, my name is Robert Hendricks and I'm the VP of Finance here, and I'd like to take you through slide 14 on the financials. When we are looking at these financials for the past year, I'd like to focus your attention to three numbers in particular. The first one would be the revenue number, almost $119 million in 22. and I will, on the next slide, provide more detail, but it's clear that this was largely driven by the funds that we received early 22 from Novartis. The second number I'd like to draw your attention to would be our operating expenses. The guidance that we provided during last year consistently was in the 70 to 75 range, and the 73 million ended up right in the middle of the guidance And these costs have been stable over recent years. Combined, these two numbers clearly lead to the positive results that we achieved in 22. The third number I'd like to draw your attention to would be the cash balance of almost 250 million. This is the cash on the bank account, including the short-term deposits that we have with banks. close to 250 million. We think that this will carry us into 26. And this puts us in a privileged position in the industry. So these three numbers, the revenue, the expense, and the cash, are important to note as they tell the financial story of MP in 22 and fully reflect the healthy financial state of the company. Moving to slide 15, if we Then look in more detail to the revenue numbers. It becomes clear what a remarkable year 22 was, with the revenue close to 190 million. You can see that in the recent years, the revenue mostly related, if not all related, to the Imgen collaboration. And in 22, we see the impact of the Novartis collaborations. If I break down 190 million, 173 of revenue relates to Novartis, and this can be broken down in a few buckets. The biggest bucket would be 163 million that were triggered by the exercise of Novartis under the NCOVID license agreement, and this happened in the first week of January. The further 10 million of revenue then comes from the December 22 collaboration on LIBR, on RLT as discussed earlier. Here we can break that down into 2 million of FTE recharge and 8 million of the recognition of the upfront payments that we received following this agreement. The balance of the upfront on the NIVA collaboration will be recognized inter-review in 2023 and 2024. Then following the notice from MGM on MP0310, we were able to recognize in full the remaining contract liability or deferred revenue of 10 million that we still had on the books. This number is actually in line, as you can see, with most recent years where it comes to MGM revenue. Then finally, and that's the yellow bit on top, So we were able to recognize 70 million into revenue from the amounts that we received from the Swiss government. Uh, the day I gave as per the, uh, reservation agreements that we concluded with them in 2020, uh, that agreement transitioned to Novartis upon the exercise, uh, uh, the option exercise. Uh, so we were able to recognize the community revenue. Um, this revenue, together with the operating expenses clearly resulted in a positive net result of 118 million in 22 and a cash balance of just shy of 250 million. This then leads me to slide 16 on the guidance on operating expenses for 23. In line with the past, we will not guide on revenue. For the year 23, we guide the total operating expense of 70 to 80 million. Operates around 9 million will be non-cash. And as always, this guidance is subject to the progress and changes of our pipeline. So in summary, I think with almost 250 million in cash and no debt, we are in privileged position. We are funded into 26. And this is without clearly taking into account any possible money coming in from collaborations and future partnerships. I think that these numbers show the healthy financial base of us entering into 23. It will allow us to continue to invest and to bring drugs to patients in need. Thank you for your attention. With this, I'd like to hand back to Patrick, who will tell you more about the R&D and scientific outlook for this year.

Thanks, Robert. Really a lot of numbers, impressive numbers, and I can only echo the health of the company, which is not a given in the current setting where not all biotechs can build on such a strong balance sheet. Before we open for questions, let me just quickly walk through the outlook. What can you expect from us in 2023? What to look into? I'm now going to slide number 18. I do start again with 533, and that is the key driver where we are focusing heavily on the execution that we are able to present you with safety and initial efficacy results in the second half of this year. Again, additional preclinical work, especially for combinations, but also understanding the drug, where to develop it further is ongoing and will be presented over the year. 317, that's the completion of the food escalation and safety trial, first half of this year, and initiating and partnering discussions on the back of that, and stressing again the indirect catalyst by the Roche FAP CD40, that's Roche 6189, if you want to look it up. that would have a direct recoup to 317 in good, but also obviously in negative data. Radiodarpin therapy platform. So we will definitely advance the platform working on that kidney to tumor or tumor to kidney ratio. It is about selecting targets and candidates. So that's an activity ongoing and which of these kidney reduction approaches we build and put in that candidate. And last but not least, very importantly, the collaboration with radionuclide companies that we can secure access. It is a crosstalk. The better our results, the better our arguments with these companies are. The aim is one to two of collaborations in that space. On the further opportunities, we have switched DARPN, so immune cell engagers, where we are aiming to move a program forward for ourselves, but there is also partnering optionality there as these are platforms and we have a rich pipeline and we could add more in some partnerships on the switch platforms. And also update you on the virology projects that's kept a bit open because there is in-house activity and partner activity with Novartis. Let's see where that goes. That's definitely worth an update over the year. With that, I would like to echo what Robert said. We're well funded into 26. Nothing we take for granted, but we really take that as a mandate to work hard to push forward and generate the value for patients and then shareholders as we invest that smartly in our pipeline. With that, happy to end the formal presentation part and open for questions. I'm happy to take those as they come.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. The first question today comes from Joe Walton with Credit Suisse. Please go ahead.

Thank you. I have a few questions, but your line did seem to cut out a bit, so I do apologize if I ask you to repeat some stuff that you have already said, which wasn't available certainly to us. But firstly, can I ask just how many people, just some idea on the recruitment and any update on the size of your studies for MP0533 and 317? You last said that you would be looking at something like a 25 to 45 patient size. start and that those patients would start to be recruited in the back end of 2022 for 533. So just some updates there. On the Novartis radioligand collaboration, have you, the what you had done for Novartis cut out for me. So have you delivered any targets to them or are you still trying to sort out this issue of the kidney accumulation before you can go much further. Could you also just expand a little bit more on the sort of partners that you want? Are you absolutely confident you can sort out the targets and the linkers yourself? It's just you need help with the actual radioactivity and you can do everything else yourself. We're very mindful that it's taking Novartis a huge amount of time to actually sort out their Pluvitco, etc. The manufacturing is so incredibly complicated. Just wondering how you're looking at that. My final question on the funding side of things. I absolutely appreciate that if you keep at your current level of spending, you're funded through to 26. But given the progress that you're making and the extra people that you've taken on board, Presumably, you would be looking to accelerate this level of spend over the next couple of years against which you would need to get some partnership income. Those are my questions. Thank you.

Joe, very good questions. And let me kind of go through. And I think your last and the first one were sort of linked. So maybe I'll actually take that one last, which is like FTE guidance. spending guidance, I'll take that last, but I'll start with the 533 trial. As you said, we guided 25 to 45 patients. That is absolutely correct. There is a slide on those escalation. I think the one thing to point out there is that we have to start with low doses as we do not have thin or cross reactivity. So we're in a Mabel setting. So we have few patients, low doses, then expand to higher doses and can recruit more patients. So that's kind of the one end. We definitely want to, and pending also obviously on the success and the progress, we can include more. It is definitely something we want to do, especially then at the higher dose levels to include more patients. At this point in time, For this year, just given the time, we will have initial safety data of a good handful. I think it's 10 plus for sure patients. I mean, we are recruiting now. And then we will also see initial efficacy results, as this cannot drag on for months. The activity has to show itself in the first weeks when you apply the drug. The caveat we want to give here, and just to be also clear, is There has been success in AML where some drugs have shown early results, but it didn't last very long. So even if we see an early response for the real value that we are aiming for, and because we're targeting also the leukemic stem cells, we want to see activity beyond just one or two months. It's really the three and plus months we want to see. There's biomarkers to sort of predict that, but the data is the data. So there will be more safety and initial activity data that we show this year, and then more to come on the durability of the response. As we cannot foresee at what dose level we see activity, it's difficult to guide on timing, but second half of the year for initial results is good. And then the Novartis collaboration, what happened? Yeah.

Yeah. Seth, please follow up. Thanks, please. Maybe to the Novartis collaboration as well, I was just going to point out one thing in the way that the question was. So, Joe, for your benefit, the deal when we did the two targets with NIBR, these are two targets that they had asked us to build. which, as we said at the time, were not things that we were actively prosecuting at that time, so we were very interested and happy to do so. But the comment and the consideration around the kidney accumulation issue, that's a systemic problem for all protein therapeutics and one that we're now showing that we can potentially, and it looks very encouraging, work around. But that was not and is not a rate-limiting step for us in our relationship with Novartis. So they aren't waiting for us to do anything on that. They will profit from it because we want them to profit as a partner and we want them to succeed. But I don't, I just want to be sure that there wasn't any confusion in the question that there was somehow this kidney toxicity accumulation consideration was somehow rate limiting to our work with Novartis or anything else. It's a systemic thing that we look like we believe at this moment with our scientists that we're going to be able to overcome and we're very hopeful for it. But go ahead, Patrick. Sorry.

No, absolutely. I echo what you say. So, Joe, when we signed the agreement with Novartis, there was no stealth DARFing whatsoever, no orthogonal approaches. So this is all on top. I think it is fair to say that we are delivering or have delivered initial DARFing to Novartis, so there is absolutely no setback there that's going as planned. But the timelines from binders to candidates to clinical trials, that's a question you'll have to ask Novartis So we can only guide on our own pipeline and we hold true that we want to see the first radio therapy in the clinics next year in 24. That's an aim we have. Um, you asked a very good questions about what, for what do we need a partner? And you made it also, I think very clear that, I mean, there is more to, uh, just link the DARPN to a linker chelator and put a regular isotope on and you have your product. I think what I just described, so the chemistry, that is actually quite simple. So we have done that several times. That is not the difficult part. The difficult part is the logistics in the clinic, is the quality of manufacturing, is the global distribution. And that's where we want to also then work with the leader in the field or the leaders in the field, maybe one, because that race is ongoing, a race, that establishment of this drugs class as a drug class that can be really in patience. We see the problems. We see the problems Novartis has. So we don't want to do that alone. We need partners who can do it. And we will likely do collaborations, maybe more of the shape of a 50-50, that we co-own a product with such a company that actually has radioisotopes and is building the delivery and the logistics around it. So that you understand how we see that. So not alone, but real partnerships. And while the chemical or the technical part that we have or are mastering well, we don't see any limitations so far, not at all. At the same time, the complexity of the value generation chain, yes. And that's where we want to team up. And that's where you should see, hopefully, the collaboration agreement this year. Then I think the funding, let's go back to that, and acceleration, I think it's true. So what we have at the cash reach is built on a, let's call it, scenario, on a conservative scenario of a rather steady cash burn. And if a program is stopped, obviously, then the cash burn will be longer, which is in a way not good. If things go really well, if 533 looks great, then we want to accelerate, you're right, then also our cash flow would have to change. At that point in time, but also our stock price should change, so there's different optionalities there, or partnerships. So to do a partnership or whatever on good data is a totally different game than now. So for us, it's really bringing the good programs forward, collecting the data, and then see what is the best way to bring it forward, alone or in partnerships. 533, the setup is that we want to do it alone, and if that is possible, that is plan A. I hope that answers part of your funding question. We have not grown massively last year. We did not give the exact FTE numbers. We also don't plan to grow massively this year, so we see this rather steady, a bit up and down. We need the resources to progress the pipeline, I think we're at this point in time more on a steady state than a growth trajectory, also given the market and the state of the company or stage of the company where the programs are. I hope we could answer your questions, Jo.

Yes, thank you. You have given us your FTEs. You increased your staff by 7% on page 14, but thank you very much.

Yeah, but what that's going to be next year, if it is, I mean, seven is more or less almost equal. Depends really how things develop, yes.

Thank you.

Thanks.

The next question comes from Georgie Yordanoff with TD Cowan. Please go ahead.

Hey, guys. Thank you so much for taking our questions, and congratulations on the progress. So maybe on the topic of durability for 533, maybe can you, I guess, talk about when can we expect some initial insight into that? And then maybe also what have you seen from your preclinical data in that respect in terms of are you seeing certain mechanisms of resistance that evolve over time? How should we be thinking? What does the data suggest? And then on the radioligand therapy issue, Maybe can you just talk about how you made the decision to select the tumor-specific antigen here? We've seen other companies go after targets like Claudin. So maybe can you just talk about how did you decide to, why did you decide to take a slightly different approach? And what do you think is differentiated about a DARPA platform that could allow you to have differentiation on that market?

Hey, thanks, Georgie. Both great questions. Happy to answer. So let's stay on the durability of 533, and it is actually the key design feature of this drug. And the problem of durability is also of other drugs' clonal escape, because you're not killing all clones. That means you might reduce the tumor mass, but if 10% of your tumor cells are not killed there you have your population that just grows back, and two months afterwards, you're at the same starting point that you were. And so this monotargeting is actually exactly leading to these short-lived responses. We are trying to go broader with our tri-specific approach and include, and there is a bit of debate, we call it the leukemic stem cells or the precursor cells, because if you really get to them, if you really can kill those cells upstream that are causing the problem, you have at least the belief and the hope to have a much longer durability of your response because A, you don't have clonal escape because we're targeting three targets, and B, you're sort of drying up the, what's it called, the free at the source. so that you really could kill those cells that are responsible for the relapse. And that is what we designed the molecule for. That's where we have a lot of preclinical data that was presented at ASH, and that's what we want to show in the clinics. Now, as I said, the holy grail is obviously to follow the patients and see the non-relapsing patients or follow the time they don't relapse. What you can also do is you can do bone marrow aspirates and check for MRD positivity or negativity, so many more residual disease. And if you are MRD negative, meaning there's no disease, that is a good, call it biomarker for your durability of response. So that is something we are looking into as early as we can when we see a complete response. So to have a complete response, MRD negative, that's the first thing we're hoping for. and then obviously looking that that translates into durable responses. And all on the design of the drug, so this is not by chance. If this happens, this is because we designed it to happen. On the DLL3, and I'm also glad about that question, now we're going to radiotherapy. Most of our competitors are working with ligands. That's why it's called radioligand therapy. And take PSMA, that target, or other targets you were hinting to. These are targets that have grooves where ligands can bind really well. That's one reason these companies that have radioligand therapy are all going against the same targets. With the dark pins, we are rather agnostic. As long as it's on the surface and it's a protein, we can bind it. So we are hoping to expand the target space beyond what is, I would say, ligandable or addressable with ligands. So going to the broader space. And we have chosen DLL3 because of other, also because it's darkenable, because it's a deadly disease, high medical need, especially in small cell lung cancer, but also in some prostate. And it is... the tumors are highly metastasized. So that was one of the reasons. At the same time, we have a rather big initiative to identify new targets for DARPIN. And as I said, there's sort of a gating system that it should be something that is more DARPIN unique, meaning maybe not ideal for ligands, and it should be as clean as possible. and in indications that have high need and have maybe a high level of metastasis. And then in indications where radiotherapy is used. So it's sort of a Venn diagram we're building, and that is ongoing. Definitely also something we can update over the year, how our thinking of differentiation between radiodarpin and radioligons is coming along. But both great questions in both hinting to the differentiation activities that we are building into our pipeline.

Thank you so much. Thanks.

The next question comes from Diana Graybosh with SBB Security. Please go ahead.

Hi. One question for me. In other T cell engagers, there's often a pretty steep dose response curve. So if you follow receptor occupancy, you see it jump up. I wonder with you targeting three different targets, how are you thinking about pharmacodynamic markers and when you will know that you should be in an active dose for where we should start to see clinical activity?

Yeah, no, it's spot on, and it is something we are following. As you say, we have to try specific with the lower affinity, so it's not quite as easy as it's not one target. What we are doing is obviously, and that's the good thing in AML, you can take patient samples as you go, so it's much easier than a solid tumor biopsy. And we are looking at target engagement. We're looking at T cell activation. We're looking... exactly at the questions you have. But your point you make, so how steep that sort of response curve will be, we will have to find out. We did not opt for the most potent molecule because potency was seen with other T cell engagers, but the side effects were just too strong. So the idea, hopefully, is that we actually can find that window of engagement and killing without the side effects. And we will update definitely with all the data we have, and we're measuring exactly what you were hinting at. So how, and it's receptors occupancy, if you want, or how many darpins per cell, and how active are the T cells. Thanks, Dana.

Thank you. The next question comes from Yi Chen with HC Wainwright.

Please go ahead.

Hey, this is Chet on behalf of EE. Just a couple of quick questions on 533. Any plans on, and please, I beg your pardon if you've already addressed this, but any plans on expanding the clinical sites to the U.S.? And then the other one on Abhisikar in AMD and DME. Where does it stand as it relates to commercial activities? Thank you.

Yep. 533 and U.S. So the initiation of the trial is planned, or the first part is planned, for Europe at this point in time. So we are first in Switzerland, then the Hovhann site, and I think it's also Lithuania that we are planning to start up sites. With success, with good response rates, with complete responses, we would then immediately want to go to the US to include US sites. Those plans are being built. We do plan for success on that program for sure. And so that will be the next step after we have clinical data. Then Abiquipar, where does the program stand? Let me quickly remind you. So Abiquipar went through two phase three trials. It had stellar efficacy data, activity data with three or every three months injection being as infectious as a monthly Lucentis regime, so non-inferiority reached. It had, and it got a complete response letter on inflammation that was 15%. At the time, we had thought it was the impurity, so we put a lot of activities on further purifying, and we brought the 15% to below 10%, but then we hit a ceiling we could not explain. We gave the program back, And more recently, we have found the likely culprit of those 10-ish percent, below 10% inflammation, which is the silicon oil that is used to lubricate the syringe that together with the DARPIN, so it's sort of an induced indirect impurity that causes DARPIN aggregation. We see sub-physical particles that form or can form and then can lead to inflammation. The solution is rather simple to go for non-siliconized syringes. Then you could move the program forward. There is some discussions ongoing with a potential path forward for this program. We would not fund that ourselves. So this has to happen outside of molecular partners. So we put that as an optionality out there. While the efficacy is good, we also have to state that other programs have caught up on durability. Vibismo is also out there now taking market. There is high-dose ILEA. So the question is really more how would one run trials and what is the investment to make a big part competitive in the landscape? Maybe that what is the trial to show information is gone. Just to give you an update, Those discussions are out there. It's not what we're kind of doing in our day job, that 533 in the pipeline. But if there is optionality, we are open to discuss that with potential partners or investors.

Thank you.

Thank you.

As a reminder, if you have a question, please press star then 1 to be joined into the question queue. The next question comes from Sebastian Vanderschoot with BOK. Please go ahead.

Hi, it's Rowan dropping in for Sebastian today. Thanks for taking my questions. So I just have a couple. The first on 317, so you've mentioned you expect to complete the patient recruitment in the dose escalation part of the phase one study in the first half of this year. So can we expect to see additional results from the study in the second half of this year? And then another question, what is your thinking around suitable partners for this program? Thanks.

Yep. No, thanks. So yes, I mean, recruitment, I said we're at the top dose. So we're definitely closing in on that. And it depends a bit sort of how long patients are on trial. And so that's going on. Also, too, what are we looking for? And one thing we want to guide is we are not expecting simulation activity. We are in the sense of patient responses. We are hoping to get a good panel of biomarkers showing activation of the immune system locally, ADCs going up, B cells moving in. So those markers and cytokine patterns and mRNA patterns in the cells. So we're doing a lot of biomarker analysis in the tumors. That's what, and also the periphery. That data set should then be used to sort of conclude that the mode of action is safe. It does. and it moved forward in combination with drugs that would do that initial manipulation. What companies come as partners? Likely those that are in immunoncology and have a franchise to build or defend. And that's why I was stressing the Roche study. So Roche obviously has Atezo. If that's a TESOL combination and they are doing the PD-L1 combo with their SAP CD40, if that looks stellar, my guess is companies with a PD-1 or PD-L1 would like obviously not to be pushed out by Roche, but to have a chance against. So likely partners would include those that have that franchise and that investment ongoing. There's other combination partners like more chemotherapy, radiation therapy that also boost. That can be looked into, but my guess is these are immune oncology companies that are interested in CD40FAP.

Okay, thanks. Thanks.

Once again, if you would like to ask a question, please press star, then 1. to be joined into the question queue. As there are no further questions, this concludes our question and answer session. I would like to turn the conference back over to Patrick for any closing remarks.

Thanks for all the great questions. I think the questions also allowed us to highlight how we are thinking about our pipeline, how we are differentiating over other approaches, and that is our highest mantra, differentiation and to gain high patient value and early clinical readout. This will be a year of execution to get exactly to those inflection points. We are excited to have them on the horizon and are looking forward to working with all of you to realize that patient value. So thanks to my team here. Thanks to Seth, who I visited this week. And also thanks to everyone on the line and all of our investors supporting us. Take care. Stay well. Talk soon.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.