Mirati Therapeutics, Inc.

Good afternoon and welcome to the Merati Therapeutics fourth quarter 2022 earnings call. My name is Cynthia and I will be the operator for today's call. All lines have been placed on mute to prevent any background noise. After the conclusion of the speaker's prepared 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 would like to withdraw your question, press the star followed by the number two on your telephone keypad. It is my pleasure to introduce Ryan Acy, Vice President of Corporate Affairs at Merati. Ryan, you may begin the call.

Thank you, Cynthia, and welcome everyone to this afternoon's call. Joining me on the call today are David Meek, our Chief Executive Officer, Dr. Chuck Baum, our President, Founder, and Head of Research and Development, Dr. Alan Sandler, our Chief Medical Officer, Dr. Jamie Christensen, our Chief Scientific Officer, Ben Hickey, our Chief Commercial Officer, Lori Stelzer, our Chief Financial Officer. Before we begin, I would like to inform you that certain statements we make during this call will be forward-looking. Because such statements deal with future events and are subject to many risks and uncertainties, actual results may differ materially from those in the forward-looking statements. For a full discussion of these risks and uncertainties, please review our annual report on Form 10-K that is filed with the U.S. Securities and Exchange Commission. This afternoon, we released financial results for the fourth quarter and full year ended December 31, 2022, and recent corporate updates This press release is available on the investor section of our website at maradi.com. With that, Dave, I'll turn the call over to you.

Thank you, Ryan, and thank you for joining us on the call today. 2022 was a transformational year for Maradi, and I'm pleased to report we received our first approval and launched our first commercial product, Kruzaki, and KRAS G12C mutated locally advanced or metastatic non-small cell lung cancer. We deployed our highly experienced lung cancer commercial field force, and made significant progress advancing our differentiated pipeline of targeted oncology products. Our team launched Cresati in mid-December, and while it is still in the early weeks, we are encouraged with Cresati's initial reception and its broader commercial potential. The initial launch feedback from clinicians, patients, and payers reinforces our belief that Cresati is the best-in-class KRAS G12C inhibitor, addressing a multibillion-dollar market opportunity across multiple lines of therapy and tumor types, both as a monotherapy as well as in combinations. Additionally, our broad and differentiated clinical pipeline has the potential to address unmet medical need for hundreds of thousands of people living with cancer as we endeavor to develop differentiated products that will play an important role in their care. As I step back and look at our products, capabilities, and people, It's clear we are well-positioned to achieve near-term success and to drive long-term growth. Mirati is focused on creating best-in-class small molecules for the treatment of cancers, with a current focus on being a leader across KRAS-mutated cancers. Our highly productive innovation engine has enabled us to develop KRAS and KRAS-enabling therapies to treat a broad range of patients. We expect to dose our first patient with MRTX1133 our KRAS G12D inhibitor, in the first quarter. Moreover, our other earlier stage clinical programs, including our MCA cooperative PRMT5 inhibitor and our KRAS-enabling SOS1 inhibitor, show tremendous progress. Furthermore, we have a potentially transformational opportunity on the horizon with citravacidib and lung cancer in combination with PD-1. We believe this pipeline has vast potential to create significant value for our shareholders. Alongside the development of these programs, we have built a scalable and synergistic commercial organization, particularly in lung cancer. At present, our U.S. commercial team is exclusively focused on launching Cresati. Furthermore, Mirani remains disciplined in how we deploy and invest our capital. We continue to focus on the combination of clinical data analysis and the corresponding commercial opportunity to drive our investment decisions. Looking back, 2022 was a year of remarkable execution and major achievements for Mirati. Key clinical highlights include accelerator approval for Grisotti in the U.S. and second line and beyond KRAS G12C mutated non-small cell lung cancer. Best-in-class intracranial response rates without aggressive in patients with active and untreated CNS metastases. Differentiated clinical data demonstrating idegressive plus PD-1 combination is safe and tolerable with promising early signs of efficacy. Broader potential in third-line and beyond colorectal cancer indication for the combination of idegressive and cetuximab. An investigational new drug application for MRTX1133, our first-in-class oral KRES-G12D selective inhibitor. Advancement of MRTX1719, our MTA cooperative PRMT5 precision medicine for people with an MTAP-deleted tumor, and MRTX0902, our potential first-in-class SOS1 KRS signaling modifier program into clinical trials. Looking ahead, 2023 is a year with several important upcoming catalysts and ambitious goals, which we will detail on today's call. We'll start with an overview of the Corsati launch, which is off to a strong start. I'll now turn the call over to Ben, who will provide you with an update on our early commercial experience. Ben?

Thank you, David, and good afternoon, everyone. I'm pleased to report that we're off to a strong start to the launch of Cresati. As a reminder, Cresati was approved in mid-December, right before the holiday season. Therefore, I will limit my comments to that brief fourth quarter timeframe and look forward to giving a more detailed update on our first quarter earnings call. Our initial launch experience has been very positive, and we're confident that we can successfully deliver on our commercial goals. As a reminder, our U.S. commercialization team has specific and extensive experience in lung cancer, supporting multiple launches. This includes a fully integrated team of market access, sales, digital marketing, and medical affairs. The team has already had extensive high-quality interactions with key target accounts. and are focused on ensuring an industry-leading experience for physicians and patients. For example, initial patients treated in December are receiving treatment within approximately five days of a prescription being written, versus industry analogs of closer to 10 days. And our unique patient and physician-centric approach to distribution and our patient access programs have been well received. We continue to leverage our experience in the community setting, where over 40% of our pivotal study was enrolled. and where nearly 80% of KRAS G12C patients are treated. From an access and coverage perspective, we are pleased with our initial progress. Prasati was included in NCCN guidelines within one week of approval, which is exceptionally fast and helps from a coverage and reimbursement perspective, particularly with Medicare patients. Overall, we've made strong initial progress in establishing broad reimbursement coverage with no significant access restrictions to date. Our interactions with physicians have been highly positive, and our key messages centered around a 44% response rate and 14.1 months of median overall survival, as demonstrated in a pooled analysis of phase one and phase two non-small cell lung cancer patients, and low treatment-related discontinuation rates are resonating well. Additionally, data showing Chrisati's activity in patients with central nervous system metastases has been favorably received by physicians who recognized the importance for the approximately 40% of patients known to have CNS metastases. The second line KRAS G12C non-small cell lung cancer market is significantly underdeveloped. As a result, our team continues to focus on market expansion priorities, such as increasing both testing and identification of KRAS G12C eligible patients, particularly in the community setting. We estimate that the KRES G12C testing rate at time of diagnosis is approximately two-thirds, while testing rates for EGFR and ALK mutations are closer to 85%. So there is a significant opportunity to grow the market and meaningful opportunities to better identify patients with a KRES G12C mutation at the local account level where we've established partnerships with community oncology providers. In summary, We believe that the important differentiating clinical characteristics of Cresati, combined with an experienced and focused commercialization organization, positioned Cresati to ultimately become the market-leading KRAS G12C inhibitor. Our commercialization team has a singular focus, delivering Cresati to the physicians and patients who could benefit from it. I look forward to providing additional information as our launch progresses. I'll now turn the call over to Alan for an update on our clinical activities. Alan.

Thanks, Ben, and hello, everyone. I'll begin by discussing Adagrasiv, starting with non-small cell lung cancer. In first-line non-small cell lung cancer, we expect to share key updates across our multi-pronged development approach this year. As a reminder, our initial and most advanced Adagrasiv combination approach in first-line non-small cell lung cancer is the concurrent dosing of Adagrasiv with pembrolizumab. Our experience with this combination provides us with confidence in the path forward based on three key points. First, there's a strong scientific rationale for improved durable outcomes with the combination relative to the existing first-line standard of care. Second, Adagrassive in combination with Pembrolizumab has demonstrated a safe and tolerable profile. And third, while the efficacy outcomes are still maturing, they are compelling, and we look forward to evaluating the clinical outcomes with additional follow-up and more patient data later this year. Overall, the advancement of our first-line non-small-cell lung cancer strategy will continue to be informed by data from ongoing clinical studies. We expect to provide an update in the second half of this year, which will include a first look at durability measures, such as duration of response and potential six-month landmark PFS analyses. Within the CRYSTAL 7 study, we're also evaluating adagrassib as a monotherapy in patients with TPS scores of less than 1%. In addition to the CRYSTAL-7 combination update in the second half of 2023, we will also provide an update on the first-line monotherapy data and next steps at that time. As part of our multi-pronged first-line development approach, we are also evaluating adagrassib in combination with the keynote 189 regimen of carboplatin Pemetrexid, and Pembrolizumab, which is enabled by the tolerability profile we are seeing with Adagracid plus Pembrolizumab. A Phase 1b-2 study evaluating this combination has been initiated as part of the CRYSTAL-17 study with an initial focus on the safety and tolerability of the combination. Finally, beyond the U.S., we are continuing to advance discussions with the European Medicines Agency on their review of Adagracive's marketing authorization application and anticipate potential approval in the third quarter. I'll now move to colorectal cancer, where we have several important upcoming milestones. Adagracive, in combination with cetuximab, has shown a compelling and differentiated profile and is our primary approach in colorectal cancer moving forward. In the most recent results, which were represented at ESMO in September of last year, the combination demonstrated a response rate of 46% and a median progression-free survival of 6.9 months. Notably, these results suggest the potential for a substantial improvement compared to the current standard of care of regorafenib or chemotherapy, which have very poor outcomes with low single-digit response rates and a progression-free survival of only approximately two months. Based on recent input from the FDA, we will be moving forward with an accelerated approval pathway for the combination of adagracib plus cetuximab in third-line or later colorectal cancer. We expect to submit the supplemental MDA in the fourth quarter. Our CRYSTAL-10 Phase III Registrational Study in second-line colorectal cancer patients evaluating the same combination of antagracid plus subtoxamab versus chemotherapy continues to enroll well. We expect to achieve full enrollment of CRYSTAL 10 by year end, and we anticipate reporting the final analysis of progression to pre-survival with interim overall survival in 2024 with plans for regulatory submission based on these results. In addition, Other important development opportunities for adagrassive include pancreatic adenocarcinoma, cholangiocarcinoma, noncholorectal gastrointestinal malignancies, and other solid tumors harboring the KRAS G12C mutation. We plan to present updated data in these tumor types at a medical meeting in the second quarter. I'll now briefly touch on citravacinib, which is being studied in a registrational phase three study called SAFIRE. Vampire is on track for a top-line final analysis for overall survival in the second quarter of this year. While we remain blinded to the ongoing study, we believe it was sufficiently powered to demonstrate both statistically significant and clinically meaningful outcomes. With that, I'll turn the call over to Jamie for an update on our earlier stage development pipeline.

Thank you, Alan. Today, I will cover progress on our early clinical pipeline assets. MRTX1133, MRTX1719, and MRTX0902. I'll begin with 1133, our highly potent, selective, and potentially first-in-class oral KRAS G12D inhibitor, which targets both the active and inactive states of the KRAS G12D mutant protein. The KRAS G12D mutation is predominantly associated with poor outcomes on standard therapy in several types of cancer. We estimate that just within pancreatic, colorectal, endometrial, and non-small cell lung cancers, there's a prevalence of approximately 180,000 patients with KRAS G12D mutations in the US and Europe. We believe that 1133 has the potential to be an impactful treatment option for these underserved patients. We filed an IND for 1133 and received clearance from the FDA in January. Activation of clinical trial sites is underway and enrollment of first patients in the Phase I-II study will begin this quarter. The study is designed to evaluate the safety, tolerability, PKPD, and antitumor activity of 1133 in patients with advanced solid tumors that harbor a KRASG12D mutation. The study will utilize the formulation designed to enhance oral absorption and increase systemic drug exposure. Positive attributes of 1133 include subnanomolar potency in tumor cells, high plasma-free fraction, long target residence time, and a long plasma half-life of greater than 50 hours. These attributes are all consistent with a low target plasma concentration threshold for maximal target coverage for the full duration of the dosing cycle. This has increased our confidence in a successful development path for 1133. 1133 has the potential to provide a transformative treatment option for the large and underserved ARAS G12D patient population. Now, moving on to MRTX1719, our potentially best-in-class MTA-cooperative PMT5 inhibitor. 1719 is enrolling in a Phase I-II clinical study for patients harboring an MTAB gene deletion. An MTAB gene deletion occurs in approximately 10% of all human cancers. This translates to greater than 200,000 patients in the U.S. and European Union annually. While 1719 has the potential to address a wide range of tumor types, Initial priorities for our development program will include pancreatic cancer, lung cancer, mesothelioma, and malignant peripheral nursing tumors. 1719 has demonstrated promising preclinical data in these tumors and the potential to make a significant difference in treatment outcomes in these particularly difficult to treat tumor types. This may enable a rapid development path. Now as a reminder, 1719 selectively binds to the PRMT5 MTA complex. This complex is uniquely present only in tumor cells harboring an MTAB gene deletion. This results in extensive selectivity for eradication of MTAB-deleted tumor cells compared with normal cells. The wide therapeutic index and ability to safely achieve near-complete target inhibition with 1719 provides a clearly differentiated therapeutic modality compared with first-generation, non-selective PRMT5 inhibitors, which were limited by mechanism-based bone marrow and systemic toxicities. Finally, the greater than 70-fold selectivity of 1719 is potentially the highest selectivity ratio for MTIP-deleted tumor cells relative to other reported PRMT5 MTA complex inhibitors. Our early clinical experience in the Phase I study has been encouraging. VK and systemic exposure are consistent with expectations to achieve therapeutically meaningful drug concentrations based on our preclinical projections. without the associated safety challenges that limited the utility of prior generation PMT5 inhibitors. Also, as a reminder, we were granted fast track designation for 17-19, which reflects the strength of our preclinical data and the potential for this agent to have a positive impact on these patients who have limited treatment options. We plan to share the initial clinical data in the second half of 2023. The focus of this update will be on safety and tolerability. with the potential to also report early signs of clinical activity. Finally, we've initiated a phase one study for MRTX0902, our first-in-class SOS1 inhibitor. Preclinical data have demonstrated that 0902 has the potential to enhance the activity of adagracib and is an example of our strategy to maximize the value of our KRAS portfolio by pursuing a broad range of KRAS targeting strategies and indications. We expect to initiate dose escalation cohorts combining O902 and adagracid in our presently ongoing Phase I-II clinical study in the second half of this year. In addition, compelling preclinical research support the utility of O902 in augmentation of EGFR inhibitors in EGFR-mutated lung cancers, other RAS pathway inhibitors in RAS-mutated cancers, including the possibility of KRAS mutant allele-specific inhibitors such as 1133. Overall, we're pleased with the significant progress we've made across our portfolio and look forward to providing additional updates in the near future. With that, I'll turn the call over to Lori.

Thank you, Jamie. I will begin by walking through our income statement and touching on a few other key financial metrics. Please see our press release from earlier this afternoon for additional details about our fourth quarter and full year 2022 financial results. Revenue for the fourth quarter of 2022 was $0.9 million, which was driven by $0.7 million of Cresati sales and $0.2 million of license and collaboration revenues. This compares to revenue of $0.3 million for the fourth quarter of 2021, which consisted solely of license, and collaboration revenues. As a reminder, Cresati was approved in mid-December, shortly before the holiday season. Of the $.7 million of Cresati sales in the fourth quarter, a majority was associated with inventory in the channel. Research and development expenses for the fourth quarter of 2022 were $141.2 million, compared to $153.8 million for the same period in 2021. The decrease is primarily driven by a reduction in manufacturing costs for the Adagrasa program following our 2021 NDA filing, partially offset by an increase in headcount-related costs, including share-based compensation and salaries associated with the growth of our headcount to support our growing portfolio. Selling, general, and administrative expenses for the fourth quarter of 2022 were $70.8 million. compared to $43.5 million for the same period in 2021. The increase is primarily due to an increase in headcount-related costs, including share-based compensation and salaries, and commercial readiness costs as we prepared for the commercial launch of Cresati. That loss for the fourth quarter of 2022 was $202.5 million, or $3.51 per share, basic and diluted, compared to a net loss of $199.6 million, or $3.72 per share, basic and diluted, for the same period in 2021. We ended the fourth quarter with approximately $1.1 billion in cash, cash equivalents, and short-term investments, which gives us a cash runway into 2025. Cash burned from operations was $570.6 million for the full year of 2022. We recognize that a disciplined, data-driven approach to capital deployment is critical as we advance our pipeline, invest in innovation, and effectively launch products to drive sustainable long-term growth. We have focused our investments on our highest priority opportunities, those that have the greatest potential to benefit patients, create value, and drive shareholder returns. We will continue to manage expenses closely, and we expect our 2023 cash burn from operations to annualize within a similar range as 2022. Our 2023 cash burn expectations include the partial offset to spend we'll achieve from sales from the launch of Cresati. Finally, we are actively exploring ex-U.S. partnerships as a source of capital and risk sharing, and as a means of enhancing and accelerating our portfolio. And with that, I'll hand it back over to David.

Thank you, Lori. Before opening the call for questions, let me conclude by saying how pleased I am with the considerable progress our team has made in 2020-22 as we delivered our objectives across the key facets of the business. I'm proud of the work this team has accomplished thus far to execute our mission, but we know our work is far from complete. We believe Merati is very well positioned for future success and value creation. Cresati, combined with our clinical pipeline, addresses patient populations amounting to multibillion-dollar potential market opportunities. And our commercial organization is also a great start. We also have multiple near-term catalysts, and we expect the case for Cresati to only strengthen over time as our adequate asset data matures. We also have the CitraVac in Phase III overall survival readout, initial clinical data for MRTX1719, and MRTX 1133 entering the clinic with initial data expected in the first half of next year. In addition, we expect strong progress across the rest of our innovative pipeline of programs that can serve hundreds of thousands of patients with unmet needs. If just one or two of our earlier stage programs demonstrate meaningful clinical activity, we expect it will have a substantial impact on evaluation of the company. As such, we are excited about our future and expect 2023 will be another standout year of execution and progress on our goals. On behalf of all of us at Mirati, we thank you for your continued support and interest in the company. And with that, Cynthia, we are ready to open the call for questions.

Thank you. I would like to remind everyone that if you would like to ask a question during this time, simply press the star followed by the number one on your telephone keypad. If you would like to withdraw your question, Press the star followed by the number two. In order to allow time for additional analysts to ask their questions, we ask that you please limit yourself to one question and one follow-up before reentering the queue. Please hold for a moment while we poll for questions. And your first question comes from Tyler Van Buren at Cowan & Company. Please go ahead.

Hey, guys. Good afternoon. Thanks for taking the question. Glad to hear the positive early launch comments. I want to ask about testing, since you mentioned it. How do you get the KRAS G12C testing to ALK levels? Does G12C need to be included on more tests or panels, or is your focus elsewhere to improve testing?

Tyler, thanks. Ben will take that question. Sure. It's a couple of things, Tyler. One is to ensure that it is on all of the multiplex tests. And I think that's growing over the course of time. And we've seen that uptick quarter by quarter. And the second one is to create additional demand for a KRAS inhibitor. And with Crisati, we think with our promotional effort in the market, that will lead to just an increasing demand. And we can see, hopefully, then the testing rate commensurate with the demand coming into the market.

The next question comes from Salveen Richter at Goldman Sachs. Please go ahead.

Hi, thanks. This is Matt on for Salveen. Could you guys share any commentary on your expectations for Zodiac sales ramp in 2023? And then at the end of the call, you mentioned you're exploring partnerships. Could you just discuss things you're thinking about and considering there? Thank you very much.

I can expand. I can start. We're not providing guidance for sales this year. And in regards to partnerships, I'll defer to maybe Lori.

Yeah, we think it's prudent to start that process and, you know, begin to have those conversations and explore the potential. So that's in the very early stages.

Next question.

The next question comes from Gina Wang at Barclays. Please go ahead.

Good afternoon. This is Hershita on for Gina. Thank you for taking our questions. First one on the adagracib launch. We understand it's early days, but are you able to comment on what percent of patients on adagracib thus far have been recent PD-1 progressors? And then second one quickly, can you provide some color on what you're hearing from physicians with regard to their familiarity on the safety and tolerability of adagracib, you know, given that the label has the safety on capsule formulation and that you launch with the tablet? Thank you.

Sure, I'll take the call first as David. I'll pass on to Ben. Regarding the metrics and so on, we'll save that for the next earnings conversation. We only have a couple of weeks on the market prior to the end of the year, so we look forward to sharing that in the May timeframe as the launch uptake.

Second part of the question, Ben, can... A similar response, really. We'll be sharing more around that in regards to some of the physician responses as we get into the Q1 call, and we'll have a better sense of the source of growth as well at that juncture.

The next question comes from Jonathan Miller at Evercore ISI. Please go ahead.

Hi, guys. Thanks for taking my question. I guess as we think about second-line launch going forward, obviously you're not giving color on what you've observed so far, but maybe what's the balance of growth there being driven by market share versus the competitor versus market development from testing. Do you have goals on those fronts for 2023? And then maybe secondarily, as we look forward to PD1 combo data update second half, what's the bar for duration and PFS there? Obviously, there's been a lot of discussion of what the right comps are, and that indication is people try to break in. Can you remind us what you're looking for from PFS data?

Yeah, I'll take the first one. Again, it's a little bit early to be sharing the information around what we're seeing in regards to is it market growth or share. We do have internal metrics and goals around both of those. We think they're critical. We do think that the market in general is still very nascent and has a long way to grow. So we do think that will be a substantial part of the growth moving forward. But we also want to measure our competitiveness by our market share. We have a team that is out there super energized and looking to take share as well. So more of that to come in the future, but just too early at this stage.

Yeah, hi. I'll take the second question there with the update and what are we going to be looking for. So, you know, the bar is – evolving. Initially, it was the all-comer in 189 or 42. There's now emerging evidence, perhaps, that the G12C mutants may perform less well than the all-comer. I think a way to look at it is as this evolves and shows what we're going to be seeing this information in peer-reviewed journals coming up, we would anticipate a significant improvement over what we've seen historically so that we have confidence moving forward in the first-line studies in order to initiate phase three trials.

The next question comes from Michael Schmidt at Guggenheim. Please go ahead.

Hey, guys. Thanks for taking my question. I had one on your strategy for adagraspin colorectal cancer. It sounds like you did have the FDA meeting recently. Could you just fill us in a bit more on the feedback that you have received there and how we should think about the scope of the filing and also what needs to be accomplished before submission later this year, as you mentioned? Thanks.

Michael, I'll start. You know, as we said that we're going to go ahead, we'll file for accelerated approval by the end of this year. We had a very good conversation with the agency based on the data that you've seen that was presented at ESMO last year. So understanding what the requirements are for the accelerated approval pathway, we've got all that laid out, and now we just need to execute on it throughout the year, put together the dossier. at the end of last year, which I think also speaks to the robustness of the data that we have in that third-line plus setting in colorectal cancer out of acid combined with cetuximab. Alan, anything else you'd add?

No, I think you summarized it quite well. We're going to be working hard to get that done, and we're enthusiastic about the opportunity.

We would say that that's just the beginning with colorectal cancer. We also have a CRYSTAL-12 trial well in CRYSTAL-10. So, we'll have that data in 2024.

The next question comes from Benjamin Burnett with Stifel. Please go ahead.

Yeah, good afternoon. This is Neil Carnahan on for Ben. When can we expect an update for more CNS data, and how important do you think that is to defining the drug profile And 2nd, my lung cancer patients, and then as a follow up to that, are you evaluating the anagrafts and pembro combo and any frontline lung cancer patients with active brain? Thank you.

I'll take the 1st part of that. So, as you know, is continues to be important differentiator for us, but part of the overall picture where the picture is really about overarching efficacy, including our overall survival response rates. as well as CNS penetration. We are expecting to have a publication in the not-too-distant future, which will be out and will be an update to the data that has initially been shown and continues to show promising results for CRUSATI. And I'll pass maybe to Alan for the second part of the question.

Yeah, I believe the second part of the question was looking at the combination in frontline and CNS metastases. And I think the plan moving forward with K7 initially when you're looking at studies With these phase two studies, you want to have the best group of patients possible, so that includes stable and previously treated brain meds if they have them. We will, as we get more and more data, begin to broaden the patient population and take a look at that because we, of course, would have every confidence that with anagraphs working in the second-line setting, we'd anticipate efficacy in that front-line setting as well.

The next question comes from Eric Joseph at JP Morgan. Please go ahead.

Hi, this is Noah on for Eric. Thanks for taking our question. Regarding 1719, is there a meaningful biomarkers for MTAP deletions or an MTAP alter biology that can be used to further enrich for patients with sensitive tumors? And also, is there a distinction between targeting MTA2A versus PRMT5 and MTAP-deleted cancers? Sure.

Yeah, I think I would say, you know, we are looking at two types of biomarkers. You know, one would be to understand whether there are patients that could be further enriched over and above MTAP gene deletions. For that category, I would say, you know, we do not yet have insight. We mostly have preclinical data where we've done some molecular profiling and And we continue to study the biology of MTAP-deleted tumors, including things that are associated with the PRMP5 mechanism, like RNA splicing, p53 status, and otherwise. We will continue to study those in patients. The second class of biomarkers we'll take a look at are those that give us insight towards the level of target inhibition that we can achieve in patient tumors. And here we believe we want to be at a 95% inhibition level for as much of the dose interval as possible. There we'll be looking at symmetrical dimethyl arginine as a target-driven biomarker, and we plan on doing that as the program advances. Then finally, you touched on, you know, PRMT5 versus MAT2A. And I think, you know, as you know, there has been some MAT2A data out there reported previously by Agios. Now, Servier is developing that molecule. Idea has commented publicly on their program as well. I'd say, you know, really the key difference here is that, you know, we believe that in MTAP-deleted tumors where PRMT5 dependency is present, you really have to suppress the target biomarker. Again, this is known as SDMA to the full degree to drive antitumor activity. And I believe that this is a more precise way in this tumor subpopulation to do this. Just note that for MAT2A, when you affect cellular, you know, levels of, you know, methylation, that you're probably, you know, affecting 20-plus methyl transferases. It's a less precise way with a different therapeutic index than PRMD5. You know, we are, you know, looking at the possibility that you could combine PRMD5 inhibitors with MAT2A inhibitors, but really no clear conclusion here. But, you know, again, for MTEP-deleted tumors, believe that the most precise way to target these tumors is through what we're doing with 1719.

The next question comes from Jason Gerberry at Bank of America. Please go ahead.

Hey, guys. Thanks for taking my questions. Just wanted to just clarify, so as you're thinking about a phase three program for your KRAS overall in the frontline setting, so it sounds like in the sub 50% PD-L1 expressing that that could move forward a little bit more quickly and that perhaps you're more wait and see. on some of the other segments in monotherapy pending durability data in the second half. So just maybe any decisions as it pertains to moving into pivotal phase three in the front line outside of the sub 50% PD-L1 is a late 2023 decision on your end. And then just on PRMT5, Tango is going to have some data here, phase one data in first half with their agent. And so just as you think about the molecules comparatively based on preclinical data that's out there, just your expectations, how you differentiate, is the idea of your 70-fold selectivity viewed as sort of where the key differentiation resides in the approaches? Thanks.

Great. I'll start with the first line question, and thanks for the question. I think a couple important points about the first line. You're right that there are, in essence, almost three different subsets, the less than one, one to 49, and the greater than 50%. have K7, which is the doublet that is showing safety and also some preliminary efficacy in that particular setting, and we will be taking another look at the data in K7 the second half of this year. That will allow us to provide information regarding the durability and also increased numbers of patients, so we have a more refined response rate, giving us a a concept, an idea of how to move forward best in the Phase 3 space. With respect to the speed with which you've talked about, we're really excited and anxious to work on both areas. The less than 50%, we were able to go a bit faster from an administrative perspective because we modified Case 7 via an amendment to be a Phase 3 study in that less than 50%. For the greater than 50%, it requires creating a protocol from scratch, but we are moving forward administratively on both areas and are looking forward to the updated data in K-7, as I mentioned, the second half of the year, so we'll be able to have a data-driven decision based on any and or all of those particular cohorts.

Yeah, I think to touch on the PRMD-5 question, you know, again, What we believe is operative here for the second-generation molecules is the therapeutic index. And in our hands, preclinically, we want to maximize the level of target inhibition in tumor tissue. And really, again, with the biomarker here, we want to be almost at 98%, 99% plus inhibition level for the full dose interval to maximize the inhibition of the target and maximize antitumor activity. This is one... area where we believe the 70-fold selectivity for MTAB-deleted tumor cells relative to other normal cells that don't harbor the MTAB gene deletion is going to be very important to spare the mechanism-based bone marrow toxicity, as well as some other tolerability issues associated with the first-generation inhibitors. And that's where we think we have an advantage over the published competitors at this point in time. Finally, just to note that we're pleased in the clinical studies at the PK and tolerability for 17-19 so far. This has been a very well-behaved molecule with respect to solubility, formulation, PK and reproducibility. And generally, you know, we continue to escalate in the phase one study, you know, inching up hopefully towards, you know, dose levels where we'll start expanding. But we are very pleased with what we see with respect to tolerability in our clinical studies so far.

The next question comes from Mike Hulls at Morgan Stanley. Please go ahead.

Hey, guys. Good afternoon, and thanks for taking the question. Maybe just a quick one on Cresati. You mentioned sales in December were driven by inventory stocking.

Just curious as we think about 1Q, should we anticipate additional inventory stocking? Thanks.

Yeah, you know, as always with the beginning of a launch, you see, you know, as you put the product out in the channel, and not all the sales in the fourth quarter in December were stocking, but a majority of them were. You know, we'll start to see demand really driving sales as we get into the first quarter, so more to come on that.

The next question comes from Yigal Notramovitz. At Citigroup, please go ahead.

Hi, thank you for taking the questions. I just had a quick one on the phase three strategy on first-line lung, specifically for the PD-L1 greater than 50. I was reading the recent February issue of Cancer Discovery, and specifically there's an editorial on the February 6th entitled Frontline Promise for Adagrassive Pembrolizumab Combination. And in that piece, it mentions that Mirati's PD-L1 greater than 50 phase three trial design will be ADA plus PEMBRO versus PEMBRO. I'm just wondering if you can confirm if that is correct, because I do not believe you've discussed the specific design as yet. Thank you.

Sure. So, yeah, happy to comment on it. So, in the less than 50%, of course, the standard of care has been 189. And so, that's why that study is designed with the doublet versus that triplet. In the greater than 50%, we've had preliminary discussions with the FDA that monotherapy for pembrolizumab is an appropriate control arm. And so, therefore, the doublet would go up against pembrolizumab, as you've described, and as was mentioned in that editorial.

So that is correct. Thank you.

The next question comes from Maury Raycroft at Jefferies. Please go ahead.

Hi, thanks for taking the question. I had a question about the monotherapy confirmatory phase three, the CRYSTAL-12. You've adjusted the study to allow crossover in patients once the PFS endpoint is achieved, which you expect in the first half of 24. Can you provide specifics on what patients are getting after they fail docetaxel and the control arm, and talk more about what ultimately gives you confidence you can succeed on overall survival?

Yes, I think...

An important point for K12 is the fact of having both PFS and OS as primary endpoints. And I think the most important aspect of that is that the PFS is a primary endpoint that has been accepted by the FDA as a means for approval. And I think that's important for a couple of ways because of the fact that PFS is not going to be impacted at all by crossover, and it will come in much earlier than the overall survival. So I think that that's probably the key elements of that particular study I'd like to emphasize.

The next question comes from Evan Segerman at BMO. Please go ahead.

Hi, guys. Thank you so much for taking the question. I want to touch a little bit on your commentary around potential collaborators or kind of some business development, as you were highlighting earlier. You know, are there any gating factors, you know, in your discussions or kind of that you need to achieve before a collaborator would come in or you'd want a collaborator to come in? And maybe provide us some colors to how you're thinking about potentially structuring these partnerships, you out-licensing. I guess I'm trying to get a sense as to how you're, you know, how you're going to continue the business moving forward with the launch and with a lot of trials ongoing. Thank you so much.

Sure, Evan. What we would be looking for, and we've started these early conversations, is an ex-U.S. partner for Adagracive. So we have a U.S. presence, and we do not have an ex-U.S. presence at this point. The marketing authorization application is going well. We expect third quarter approval of Adagracive in Europe, so that's an upcoming event that we have. The de-risking event, really, which we wanted to wait until we had that event before we began the partnering conversations, was the FDA approval. So we're now behind that. That's behind us. So we're having conversations about who the right commercial and potentially development partner would be so we can maximize that aggressive sales globally.

So we're in those conversations now.

The next question comes from Ami Fadiyah at Needham. Please go ahead.

Hi, thanks for taking my question. I had a follow-up question on the first-line part in the TPS greater than 50% of PEMRO versus PEMRO. You've indicated that you've had a preliminary discussion with the FDA. Is there anything additional that needs to be confirmed with the FDA, or are you good to go with, you know, going ahead with the trial and then, you know, once you have the data, you submission there? And then just to follow up on Krizati's How do we think about sort of the cadence of the launch, particularly in the first quarter? Are there any sort of factors outside of some additional inventory stocks in the first quarter in terms of perhaps any kind of broader dynamics in terms of coverage and pricing? Thank you.

I think I can take those questions. So regarding the TPS greater than 50% in a frontline setting, the comparator would be PEMBRO because monotherapy, PEMBRO-Lizumab is the standard of care in that patient setting. So that would be the comparator. So our plans would be, assuming the data continues to mature as we hope it does, would be a combination of adegressive plus PEMBRO-Lizumab versus PEMBRO-Lizumab. And that trial, as Alan mentioned, and we've had those preliminary conversations with the agency. So let's wait for the data to mature. And before we make the, we pull the trigger on moving forward on that phase three program greater than 50. But in the meantime, we're doing the groundwork, as Alan mentioned, now to prepare for success. Regarding the launch of Cresante, we'll share this information and the very specifics of how the launch is going in Q1 and the Q2 earnings calls. And we'll walk through those metrics of of sales and share and access and so on. We were just approved in mid-December, so it's very early weeks at this point, but we're excited to share the information at May.

The next question comes from Kalpit Patel at B. Reilly Securities. Please go ahead.

Good afternoon. This is Andy. I'm for Kalpit Patel. Thank you for taking questions. Regarding your exploratory combination of chemo plus Adagracib plus Pembro and frontline NSDLC, can you give us some color on what doses of Adagracib you are starting with to try and limit toxicity from this triplet? And then when should we expect initial data from this exploratory combination?

Yeah, thanks. So, this is going to be, it's a study that's, you know, just getting started. We're going to be looking at the adding, as you mentioned, the Adagracib to 189. We'll do it in a sequential fashion, adding to the maintenance portion first, and then, if tolerated, bringing it up forward to the concurrent. We anticipate being able to utilize the 400-milligram dose starting. That's the combination with an aggressive and pembrolizumab, so we'll add that to the chemotherapy at that point, and we'll be doing it, of course, in the usual Phase I fashion.

The next question comes from Jace Olson with Oppenheimer. Please go ahead.

Oh, hey, thank you for the update, and thanks for taking the questions. For 1133, can you talk about any lessons learned or read across from Revolution Medicine's preliminary data last night, which included some G12D patients? And then for citravatinib, Can you just talk about your expectations for the Sapphire readout in the second quarter? And since you're focused on a launch of Crisanti, are you doing any pre-launch planning for Citra, given the similar indications for Citra and Crisanti? Thank you.

Yeah, I think, you know, regarding RevMed, we are paying attention to what they're doing, but we'll, you know, probably not comment on RevMed at this point in time. Other than to say, you know, we continue to be excited about advancing 1133 into patients here imminently, and we also continue to explore in the preclinical setting different types of KRAS inhibitors, including those that inhibit different spectrums of mutations, including the G12V mutation, G13D, and Q61 mutations. So we will be continuing to pursue this, and when appropriate, can update on that front.

And on the CitraVAT question, as a reminder, we'll see the final analysis for the SAFIRE study in Q2 of this year, as events are tracking as expected. In regards to any of the prelaunch work, I think the learnings we'll take from launching Adagrassive will be key here. We have a very experienced lung cancer team, and we believe that we'll be able to leverage the existing team and existing infrastructure to be able to launch CitraVac today, but a high degree of expertise as well as at a high rate. So no need for a lot of market building in that front. We think the mechanism is pretty well recognized, and we have the team in place to hopefully, on the back of a positive study, move to file and then ultimately promote the product very quickly.

There are no further questions at this time. Mr. Meek, I will turn the conference back to you for any additional or closing remarks.

Thank you, Cynthia. And thank you, everyone, for joining us this afternoon. We appreciate your interest in Mirati, and we look forward to sharing additional updates with you.