TRACON Pharmaceuticals, Inc.

Good day, ladies and gentlemen, and welcome to TRACON Pharmaceuticals' fourth quarter and year-ended 2021 earnings conference call. At this time, all callers are in a listen-only mode. After the speaker's prepared remarks, we will conduct a question-and-answer session, and instructions will be given at that time. During today's call, we will be making certain forward-looking statements, including statements regarding expected timing of clinical trials and results. regulatory activities, future expenses, and cash runway, and our development plans and strategy. These statements are subject to various risks that are described in our findings made with the Securities and Exchange Commission, including our annual report on Form 10-K for the year end of December 31, 2020, and subsequent quarterly reports on Form 10-Q. You are cautioned to not place undue reliance on these forward-looking statements and it would disclaim any obligation to update such statements. Now, let's turn the call over to Dr. Charles Thur, President and CEO of Tracon Pharmaceuticals. Dr. Thur.

Thank you for joining Tracon's fourth quarter and full year 2021 financial results and business update call. I will begin with an update on our pipeline and then review our recent activities. Following that, Scott Brown, our Chief Financial Officer, will review our financial results for the three months and you're into December 31st, 2021. Finally, we will conclude by taking your questions. In regards to the progress in the pivotal ENVISARC trial, I wanted to comment on the TRACON clinical and regulatory strategy as it relates to the February FDA Advisory Committee recommendation not to approve the application from Eli Lilly and InnoVent's PD-1 antibody to treat non-small cell lung cancer, until additional clinical trials demonstrate applicability to the U.S. population. Specifically, the FDA decision emphasizes development of checkpoint inhibitors should be prioritized for patients with unmet medical needs. That is, for cancer indications without approved checkpoint inhibitors or other suitable treatment options, and must demonstrate safety and efficacy in patients representative of the U.S. population. This is precisely what TRACON is doing with the products we enlicense from Chinese companies, including our most advanced product, the subcutaneous checkpoint inhibitor Envifolimab, being studied in the pivotal Envisarc trial. While Envifolimab is approved in China, making it the first subcutaneously administered checkpoint inhibitor approved anywhere in the world, we are not relying on Chinese data for our U.S. registration strategy. Rather, we expect approval in the U.S. based on data from Envisarc. where we expect to prove safety and efficacy of envafolumab in sarcoma patients representative of the U.S. population by virtue of the fact that envasarc patients enroll exclusively at more than 29 sites in the U.S. and one site in the United Kingdom. This plan is consistent with our development model to harness global innovation for the benefit of U.S. patients without suitable treatment options. Returning to the topic of our continued progress with the envasarc pivotal trial, In December 2021, the Data Monitoring Committee, or DMC, reviewed data from 36 patients who were equally enrolled into each of two cohorts. As a reminder, the NVSARC trial includes one cohort who received single-agent Envifolimab and a second cohort who received Envifolimab in combination with Yervoy. The primary endpoint in each cohort is objective response rate by resist, as confirmed by blinded independent central review with duration of response being a key secondary endpoint. In each cohort, the demonstration of nine out of 80 objective responses by central review, or an 11.25% objective response rate, defines the level of response that satisfies the primary objective of the study, which is to statistically exceed the 4% objective response rate of Votrien, the only approved treatment for refractory UPS and MFS. At the December review, the objective response rate by central review in each cohort satisfied the pre-specified futility rule. The DMC noted that Envifolimab was well tolerated, with only a single grade three related adverse event reported in 36 patients, and observed that Envifolimab demonstrated a significantly higher objective response rate in lower weight patients. To provide additional perspective, The Envifolimab dose that produced a 45% objective response rate in the pivotal trial in MSI high cancer patients that resulted approval in China was 50% higher than the original Envisarc dose of 300 milligrams. And the Envifolimab dose that resulted in objective responses in two of five patients with alveolar soft part sarcoma in a phase one trial was double the original Envisarc dose. Therefore, given the high tolerability and increased activity in lower weight patients, the DMC recommended doubling the Envifolimab dose and continuing the Envisarc pivotal trial. We should also note that the new Envisarc dose is still four-fold lower than doses shown to be safe in Phase I testing. We agreed with the DMC that the increased dose of Envifolimab should optimize benefit to all patients, irrespective of weight, and expect a superior response rate and safety profile compared to Votriate. a drug with a 4% response rate, and a black box warning for fatal hepatotoxicity. Based on data from trials of other checkpoint inhibitors and refractory UPS and MFS, we are targeting a 15% response rate for single-agent Envifolimab and up to a 30% response rate for Envifolimab given with Yervoy, which would more than satisfy the primary objective of the trial of demonstrating a minimum 11.25% response rate in either cohort. The FDA has reviewed and approved the amended Endosar protocol with the dose increase to 600 milligrams recommended by the DMC. As we announced recently, this dose is now being given to patients. We are continuing the same trial design with the only change being doubling the Envifolamab dose and assessing up to 80 new patients in a cohort of single-agent Envifolamab at 600 milligrams and up to 80 new patients in a cohort of Envifolamab at 600 milligrams with Urovoid. The primary endpoint will be evaluated in the new courts receiving the higher envifolumab dose. However, patients enrolled prior to the amendment will continue on trial and are eligible to escalate their dose, which will be supportive data used in the anticipated BLA filing. We expect to complete and report two safety assessments and an interim efficacy assessment of 36 patients at the 600 milligram dose in the second half of this year. The amended trial is forecasted to increase the cost of the trial by $5 million to a total cost of approximately $25 million. We continue to plan on approaching the FDA to discuss a BLA filing strategy as soon as we determine nine responses in either cohort. With respect to Envifolimab's revenue potential, it is important to understand the sales potential in sarcoma with Envifolimab at parity pricing is not just the forecasted $200 million in revenues, from the initial indications and second line UPS and MFS. Our clinical development strategy is designed to create the opportunity for envafolumab to be broadly used in sarcoma in the frontline, adjuvant, and neoadjuvant settings by seeking supplemental indications. And TRACON's total sarcoma-driven sales revenue should be further enhanced by marketing envafolumab as part of the treatment combination in sarcoma with Y8001. Recall that Y001 is a potential best-in-class CTLA-4 antibody that we licensed from Ucure BioPharma in October last year. As a reminder, we received a broad license for Y001 to develop and commercialize in North America in sarcoma and in multiple other indications, including microsatellite-stable colorectal cancer, renal cell carcinoma, and KRAS-positive lung cancer. Note, with respect to our license, we can substitute any one of those indications for bladder cancer or endometrial cancer, or melanoma at our election. In these non-sarcoma indications, Y8001 could be combined with existing standard-of-care agents, including marketed PD-1 antibodies. Our initial development plan for Y8001 is to initiate a clinical trial in sarcoma in combination with envefolumab later this year. That trial is expected to also study a triplet that includes doxorubicin chemotherapy, which is a frontline standard-of-care treatment for sarcoma. While development in sarcoma is straightforward due to the lack of any approved immunotherapies, we also see a path forward for YHGOS1 and other indications where there is clear evidence of activity with dual checkpoint inhibition. For example, the combination of Abdeeba and Yervoy is approved for the first-line treatment of intermediate and high-risk patients with renal cell carcinoma. Our discussions with key opinion leaders indicate that most patients receive frontline treatment with a PD-1 antibody and VEGF inhibitor rather than with Yervoy. Therefore, we believe the unmet medical need in advanced renal cell carcinoma patients is in the PD-1 refractory setting. Data presented at ASCO indicate that PD-1 refractory patients can be resensitized to immunotherapy, and we expect to test Y8001 in this line of treatment. This strategy of second line dual checkpoint inhibition may be relevant for many tumor types where PD-1 directed treatment is given in combination with chemotherapy or a VEGF inhibitor, but without uravoid in the frontline setting. Moving beyond our two checkpoint inhibitors, we are pleased that the National Cancer Institute continues to advance our DNA damage repair inhibitor, TRC-102. In February, the NCI initiated the first randomized phase two trial of TRC-102, which is assessing TRC-102 in stage three, non-squamous, non-small cell lung cancer, in combination with chemo-radiation. The two-arm trial will enroll 78 patients to assess the benefit of adding TRC-102 to current standard of care treatment of pemetrexan, cisplatin, and radiation therapy, followed by consolidated drivalumab treatment. The primary endpoint of the trial is PFS, and the trial is designed to detect an improvement in PFS at one year from 56%, to 75%. Enrollment is expected to begin in June of this year and results are expected in 2024. Our fourth clinical stage asset is the CD73 antibody, TJ4309, that TRACON is evaluating in a phase one study as a single agent and in combination with the checkpoint inhibitor, Tocentric. We are working to complete the trial, which has seen the last visit for the last enrolled patient. As a reminder, IMAP has indicated their desire to terminate the TJ439 license following completion of the phase one trial for a payment to TRACON of $9 million, which is expected later this year. This brings me to a legal update on the two disputes with our corporate partner, IMAP. In February, arguments relative to both of our agreements with IMAP were heard before an International Chamber of Commerce Arbitration Tribunal under New York law. As we have noted in the past, in March 2020, IMAP issued a press release announcing a strategic partnership with KG Bio, whereby KG Bio received what the press release described as a right of first negotiation for exclusive rights to commercialize TJ4309 in multiple Asian, African, and Middle Eastern countries for up to $340 million in potential payments to IMAP. We believe that based on the KG Bio license, Trey County was entitled to receive a payment at that time under the TGA 4309 agreement, although IMAP has disputed that this payment is due. Another dispute with IMAP regards our bi-specific antibody agreement with them. The dispute in this agreement includes issues related to IMAP's two license and collaboration agreements with ABL-BIO in July 2018 that preceded our agreement with IMAP in November 2018. On April 8, 2020, we issued a notice of dispute regarding possible breaches of the TJ4309 and biocific antibody agreements. As of today, the TJ4309 and biocific antibody agreement disputes are now under post-turing consideration by the Arbitration Tribunal, and we expect their decision later this year. These arbitration claims are substantial and complex, and the outcome is uncertain. Depending on results of arbitration, Trey can continue to meet our obligations under the terms of both agreements. We will promptly provide an update when the tribunal panel announces their findings. From a business development perspective, we intend to continue to leverage our CRO-independent product development platform and U.S. commercialization expertise to add first or best-in-class drug candidates and pursue additional external clinical stage assets that would complement our expanding pipeline. Second-generation immuno-oncology targets continue to be of particular interest to us. With the UCARE license, which closed at the end of 2021, we have executed five deals leveraging our product development platform that is designed to enable rapid and high-quality development of our corporate partners' novel drug candidates. We believe our product development platform has earned additional credibility as a compelling solution for companies who wish to access the U.S. pharmaceutical market with TRACON taking on the clinical development cost and risk. and our partners able to retain a meaningful share of their product's commercial profitability. In addition to our profit-share deal structure, we are exploring revenue-sharing deal structures whereby we conduct trials at cost plus and, in turn, trade on share and royalty and sub-licensing revenues. We have also begun to explore a model whereby we share our proprietary clinical operations capabilities to enable other companies to internalize such operations and avoid contracting with CROs to execute clinical trials. This could converse substantial cost and time savings for these companies. At this time, Scott will provide an update on our financials.

Thank you, Charles, and good afternoon, everyone. TRACON's research and development expenses were $3.1 million for the fourth quarter and $11.1 million for the year ended December 31, 2021, compared to $2.2 million and $8.2 million for the comparable periods of 2020. The increase was related to enrollment in the pivotal ENVISARC trial in 2021. General and administrative expenses were $4.6 million in the fourth quarter and $17.5 million for the year ended December 31, 2021, compared to $2 million and $8 million for the comparable periods of 2020. The increase was primarily related to legal expenses in connection with the arbitration with IMAP. Our net loss was $7.7 million for the fourth quarter and $28.7 million for the year ended December 31, 2021, compared to $4.3 million and $16.8 million for the comparable periods of 2020. Turning to the balance sheet, at December 31, 2021, our cash, cash equivalents, and investments totaled $24.1 million, compared to $36.1 million at December 31, 2020. we expect our current capital resources to be sufficient to fund our planned operations into 2023. With that, I will turn the call back over to Charles.

Thank you, Scott. As you have heard, our business strategy is proceeding as planned. Allow me to recap with five key events to keep an eye out for this year. First, we expect to report an interim efficacy assessment at the 600 milligram dose of Envifolumab and Envisarc in the second half of this year. Second, we are on track to initiate a Phase I-II trial of our potential best-in-class CTLA-4 antibody Y8001 in combination with EndopoleMAP to set the stage for first-line development of the combination of our two checkpoint inhibitors in sarcoma. Third, we expect to further leverage our unique product development platform to build our product portfolio or to benefit other companies tired of being beholden to CROs. Fourth, We expect to complete the TJ4309 phase one trial this year, preventing IMAP the opportunity to terminate the agreement for $9 million. And fifth, we will report the arbitration panel's binding decisions with respect to the outcome of the significant legal disputes with IMAP. As Scott indicated, our current cash runway extends into 2023. Thank you for your time and attention, and we are now available to answer your questions.

To ask a question, you need to press star 1 on your telephone. And to address your question, just press the panel key. Please stand by while we compile the Q&A roster. Our first question comes from Mari Raycroft from Jefferies. You may begin.

Hi. Thanks for taking my questions, and congrats on the progress. Charles, for the arbitration outcome, can you put any more clarity or an estimate on when that could happen? I guess will that be before the trial completes or after the trial completes?

So with respect to the trial, Maury, you're referring to the Phase 1 TJ4309 trial? I'm sorry, the arbitration outcome. Yeah, on the arbitration outcome, Maury, I tried to provide as much information as I could. It's a confidential proceeding. You know, we appreciate the opportunity to present our point of view to the arbitration panel, and, you know, the hearing in person or virtual in person has been completed. In terms of the decision by the arbitration panel, as I mentioned, we expect that later this year, but in terms of an exact timetable, I cannot provide that at this time. Okay.

Okay. And... For the, I think in your 3Q update, you said that you had 50 patients enrolled in the MVSARC study at the lower 300 big dose. Can you say what the final number is at the lower dose? And for those patients, could you potentially provide more data or more updates around the lower dose patients outside of the second half of the year update that's gonna be for deciding whether you file for approval or not?

That's a great question, Maurice. So the trial continues to enroll vigorously. We've enrolled more than 70 patients in the trial. In terms of your question around, and just to be clear, the new patients that enroll starting in day one at 600 milligrams is 80 in the new cohort of single agent ENVA at 600 and 80 in the new cohort of ENVA plus Urovoi. So those are 80 new patients that start dosing from day one at 600 and 600, and that's the population in which the primary endpoint is decided with respect to the trial. Now, with respect to the patients that already have enrolled, as I mentioned, they can dose isolate to 600, and I think that will be very interesting data, especially if a patient, say, is at 300, dose isolate to 600, and that may potentially be sufficient for a response in a patient, say, that had stable disease earlier. So that is an important data set. In terms of when or at what time we would disclose those data versus consider it a kind of package to disclose to the FDA, I can't give you details there yet, but I do think your question points out that is an interesting separate data set. I also think it's really an interesting data set because the FDA has made clear when you submit an application for approval, they want clear evidence that you've picked the right dose. And now that we've gone up to 600, I think we'll have a lot of dose exposure data, both at 300 and 600, which then would be very useful as part of the BLA application to justify 600 milligrams as the proper, and if you will, potentially approvable dose. So it's great data to have the data in the existing 70 patients on trial, but in terms of how we and when we disclose that, I can't tell you that, but I do think it's all part of the same package that we expect to supply to the FDA as part of a BLA because it helps justify what we expect to be the approvable dose of 600 milligrams.

Got it. That's helpful. And just one clarification. I know you said this earlier, but for when will those patients at the lower dose be eligible to bump up to the higher dose? What allows that to happen?

No, great question. So it's basically when the amendment is approved at each site on a site-by-site basis, then the patients that are on study at that site can immediately dose escalate. And that's happened, for example, at several sites already. Okay. Got it. Okay. Thanks for taking my questions. Thank you, Mort.

Our next question will come to the line of Ed White from HC Wainwright. Your line is open.

Good afternoon. Thanks for my questions. So, Charles, just want to come back to something you just said. You said 70 patients are enrolled. How many of those are at the lower dose and how many are at the higher dose? And for the 36 patients that you expect to see data from, the interim data in the second half of the 600 milligram, is that going to be 18 in each, 18 monotherapy and 18 in the combo, or how should we be thinking of that?

No, I appreciate the question, Eddie, and to be clear, so we've enrolled 70 patients prior to implementation of the amendment. And there are additional patients now have enrolled under the amendment and have been dosed at 600 milligrams starting from day one as I speak. To answer your question and to be really clear, I appreciate the question. So with respect to the 36 patients where we expect interim efficacy data by end of this year, it will be much like last year. It will be 18 patients in each cohort in which each patient has gone at least three months, which allows at least two on-study scans to get a good idea of the initial response rate in each cohort. And so we will report in the same way we reported last year, this year will be 36 patients, 18 in each cohort, each patient going at least three months with two scans and report that data expected by end of the year. But to be clear, those will all be patients that started dosing at 600 milligrams from day one.

Okay. Thanks, Charles. And Just on the cash runway, are you including the $9 million payment from IMAP?

We are not in terms of our projections.

Okay, thanks. And just to be clear, the arbitration doesn't concern that $9 million. It's on other issues, right? So the $9 million isn't subject to the arbitration, or it is? No.

What we've been able to publicly disclose based on terms of the license when we signed the license back in November of 2018 is that IMAP has the ability to terminate the Phase I trial once it's complete for a payment of $9 million. And so that's a condition, if you will, of the license. Separate from the license terms, the arbitration consideration is proceeding as we discussed with the hearing now being conducted and the decision now in the hands of the arbitration tribunal.

Okay. Thanks, Charles.

Thank you. I appreciate the questions.

And our next question comes from the line of Joel Beattie from Bayard. Your line is open.

Hi. Thanks for taking the questions. The first one is on TRC-102. Could you discuss the potential for the trial being started by NCI to either lead into additional trials or potentially support approval?

Joel, appreciate the question, and welcome to it. The team, in a sense, we really appreciate you picking up TRACON as a new analyst. And thanks for asking a question on TRC-102. So, I think it is a major advance for the program that the NCI, who we've been partnering with for almost 10 years on this program, who has funded now five separate trials of 102, has taken the step to actually fund and enroll a randomized study. And, you know, it is a very unique study in the sense that standard chemoradiation with or without TRC-102, and then each arm gets standard deriving map consolidated therapy. The sample size is slightly less than 100 patients. So I think in terms of the endpoint, if we achieve endpoint, I think it would be very likely we would need a confirmatory randomized phase three trial. Although if the sample, if the effect size or hazard ratio was quite dramatic, I think there's a potential to think about moving that forward based on the data that will come out just of that trial. But I do think that's less likely, Joe. I do think we'd have to confirm that with a phase three trial. I would say the safety database for TRC102 would exceed what is generally required by the FDA for approval, because it has been dosed now in a total of six completed trials, and this would be the seventh, and so there's well over 200 patients that would have received the study drug. But that, I think, is my general feeling. But we really are excited to see a randomized study roll out for this drug. It's what the drugs really needed, a clear proof of concept trial, and we're looking forward to the results, which I had mentioned we expect in 2024.

Got it. I appreciate that. And then another question, could you discuss the ability of TRACON to scale up clinical trial development of other drugs at a time when, you know, like around now when MSARC pivotal study enrollment is kind of well underway?

No, I appreciate the question, Joel. We definitely have capacity for more studies. I mean, we're right now doing one, the pivotal MSARC study, You know, we're completing a phase one study. I mentioned we expect to complete that this year. And then we have scheduled to start the Y8001 study with Envifolumab. So by end of this year, we'll have really two studies ongoing. You know, if you were to look at TRACON, say, in 2018-19, when we were advancing a separate asset board, we were running about seven trials concurrently. And if anything, our processes have only improved since that time. So we definitely have capacity for additional assets. We are quite selective in what we look for, but we also feel that with the backbone of now PD-L1 and a CTLA-4, that attracting another potential immune oncology asset that could potentially pair with either or both of those assets could be really attractive. So we are hunting aggressively for potential new assets. And depending on the nature of the asset, we could potentially engage in a profit share deal structure if we are able to license commercial rights and I mentioned we've also discussed deal structures where we might do cost plus, where we get a revenue share for eventual commercialization. And then the third thing we've discussed is I think a lot of companies really look at what we're doing and say, I wish we could do that too. And so we have discussed the possibility of teaching them our platform and showing them how to become CRO independent and the incredible cost savings that are enabled by CRO independent. So I think those are all three things. Opportunities for us to look for new assets or look to, if you will, leverage our platform. But we are aggressively looking for new assets now to answer your question.

Great. Thank you.

Thank you, Joel.

Our next question comes from Nick Abbott from Wells Fargo. Your line is open.

Good afternoon, Charles and team. Thanks for taking my questions. So just on the logistics of IRB, you said this is a site-by-site. exercise for IRB approval. Where are you across these 30 sites and then the SARC?

Yeah, thanks for the question. I don't have an exact count, but we have 30 sites in this study now. We have 29 U.S. sites, and we also have now a site in the United Kingdom, which has been a site we've used in the past that typically is a very high-accruing site. So we've opened about half the sites under the new amendment and expect the other half to open by either end of this month or April. I would say the sites have been pretty quick in terms of opening the study, and I think it's because it's such an easy amendment, if you will, that it's the same study, just double the dose. But that's a general feel for how quickly sites have gotten open. I mean, we have basically sent the amendment into the FDA very early January. It was approved by February as we announced. We're dosing patients under the amendment as I speak, including at the new dose starting from cycle one, day one, and expect almost every site to be open by end of April, if not every site.

And then, you know, as you see, you explained that if you see these nine responses early, then it gives you an opportunity to approach the agency. So a couple of points there is, I mean, you know, there's not really a traditional question of equipoise, but do you give the opportunity for both cohorts to get this nine patients? Because if you go ahead with one cohort, you know, why not just switch enrollment to that cohort and then, you know, treat the cohort sequentially rather than in parallel to accelerate the trial? And then what would the result be or what would you want to get from going to the agency with nine responses early?

That's a great question, Nick. I mean, we're committed to fully enrolling each cohort, you know, based on the ongoing analyses and reviews by the Data Monitoring Committee. And I think we're committed to that because, you know, we feel that there might be certain patients. Let's take, for example, our target product profile. Let's take, as stated, that we hit a 15% response rate with single-agent ENVA, and we hit a 30% response rate with ENVA plus Urovoid, just for sake of argument. You know, we also know that the doublet of immunotherapy will have a more toxic profile compared to just single agent and Bifolamab. So it's really a balancing. And so we expect to fully enroll both cohorts unless the DMC intervenes with the idea that we'll see better efficacy in the dual inhibitory cohort, but also increased toxicity and likely a lower response rate with better tolerability in the single agent cohort. But our goal is to see both cohorts reach the endpoint. An individual clinician, and our real goal, Nick, is to approve the drug in two ways. It's to approve it as a single agent and with Yervoy based on both cohorts having nine responses at least, and also there being a differential response rate between the dual cohort versus the single agent cohort. So that will be the premise by which we anticipate fully enrolling both cohorts. And what we like about that, it gives a clinician the opportunity to potentially prescribe Envifolimab as a single agent, a patient who might really want to really benefit from a much more restricted safety profile versus say a typical patient that can easily tolerate dual immunotherapy and benefit from the higher response rate. So we like that potential dual approval because of the optionality it gives a clinician. So with respect to your question, our anticipation is we'll hit nine responses in both cohorts, but I think hitting it in a single cohort just allows us to start approaching the agency about You know, we've hit the endpoint in at least one cohort. We'll continue enrolling both cohorts to the full 80 patients, but, you know, let's start discussing how we would initiate a filing strategy. So it just lets us potentially interact with the agency on a closer means to facilitate the filing strategy. But to be clear, our goal will be to fully enroll both cohorts, and our goal remains a potential dual approval to allow single agent and potentially combination ENVA plus URBOI to be approved in refractory UPS and MFS.

Okay, fair enough. Thank you. And then, cumulatively, how much has the company spent on the arbitration proceedings of IMAP?

Yeah, we haven't given those exact numbers, Nick, but, you know, if you look year over year in G&A expense, you know, the majority of the increase from 21 over 20, it can be attributed to the arbitration and the Delaware lawsuit.

Okay. And then just last one for me. And that is, you said earlier that the 9 million they expect to receive from IMAD. I'm just interested in the mechanics here. I sort of almost have this vision of you, Charles, with a bag of cash walking up to the drop zone. And they've got the bag of cash walking up to the drop zone. And you've got, you know, the big binder full of data. But Are you confident that they're going to pay? Could it be put in escrow? And if you get the payment, does it take you into 24?

Well, you know, maybe we should add some security forces to our team. I think we are confident that if IMF decides to terminate the agreement, they'll fulfill their license obligations and make the payments. In terms of the – I can't go into the kind of details of how that works, but it's very carefully spelled out in the license agreement. In terms of the capital runway, I mean, I would say if you look in the past, you know, before we were involved in this legal dispute, I mean, our runway in terms of what it – I mean, I'll give you an example. In 2020, our total expenditures were $18 million. So when you think about how cost-effective we are with respect to running our business – You know, $9 million in 2020 would have given us six months of runway. So, you know, we continue to execute on that very efficient operations model, and that should give you some perspective on how much $9 million, how far it would go given our efficiencies.

Great. Thanks, Charles.

Thanks, Nick. Appreciate it.

Another reminder, that's star one for questions, star one. Our next question will come from the line of Matthew Cross from Alliance Global. Your line is open.

Hi, all. Good afternoon. And thank you for taking a couple of questions from me. I wanted to ask, I was curious if, you know, if there's anything you could say regarding whether or not we would see some further data potentially that may steer towards pursuit indications for YA001 later this year or between discussion of the design details for the Phase I-II that you mentioned is set to begin by the second half of this year. Just any – we're curious to get any kind of design implement details that you could provide at this time or any data that might point us in that direction. I guess any particular considerations we should be thinking about for the asset given its enhanced properties relative to your voice.

No, appreciate it, Matt. Yeah, so for YCOs and 1, you know, what we're going to implement is a Phase 1-2 trial. And the design of that trial, so YCHDR1 actually has a lot of clinical data behind it. It's been studied both as a single agent in a phase one study and also as a combination agent with the PD-1 antibody toripalamab in a separate phase one study. So it has a well-characterized, if you will, safety, efficacy, and PK profile through those two separate phase one studies. So we plan to combine YCHDR1 with ENVA initially and expect us to use the envidose currently in Envisarc with the Y8001 recommended phase 2 dose from the phase 1 studies to confirm that's tolerable, and then take that dual checkpoint regimen and add that on to doxorubicin chemotherapy with the knowledge that in most cases you can give checkpoints with chemotherapy without too much issues of overlapping toxicity. So that triplet would be the goal coming out of the phase one portion of the trial. And then we would use that triplet in separate cohorts of phase two patients. And we haven't gone into detail around those cohorts, but it might be three or four different histologies of sarcoma. Knowing we wouldn't add UPS until we finish Envisarc, but there are several other histologies where the combination of chemo and dual checkpoint inhibition could be quite interesting. And the real goal of that Phase 1-2 trial is to define the subtypes of sarcoma that clearly respond to that triplet better than DOCS single-agent historical data, and then take those subtypes and take those into the eventual Phase 3 trial, which would be our post-approval commitment study coming out of the expected Envifolumab approval through Envisarc. So to be clear, the ultimate goal is that we will go frontline with DOCS with or without Enva plus Y001. compared to DOCS single agent. And the key will be which subtypes of sarcoma should we enroll in that trial. And clearly, UPS MFS would be one of them based on the anticipated ENVASARC approval. But the other subtypes would be defined in part through this Phase 1-2 trial of YH001, ENVA, and DOCS, looking at response rates compared to historical DOCS data. So that's why it's such an important trial for us. It really informs as to who enrolls in the expected front line randomized phase two trial that we expect could significantly expand the label of ENVA and then also be the basis for approval of Y8001 broadly in sarcoma front line.

Got it. No, thanks, Charles. I appreciate those kind of early hints at what you're looking to do and at this stage, unfortunately. And then just one quick confirmation. Now that you've mentioned that the NCI has started up the phase two trial of 102, Just to confirm, it looks like the design is focused on survival endpoints, but given the readout you alluded to being likely in 2024 from that study, I know there's only so much you get with these investigator-sponsored trials. in terms of, you know, direct oversight. But I was curious if there's been any discussion regarding the possibility for kind of interim response level type or if it's just kind of a long haul for safety. And that's fine as well, but I wanted to get some clarity there.

Yeah, good question. I mean, I think, you know, the key endpoint on that study, which, you know, I would expect to be an approvable endpoint, is progression-free survival. And the primary endpoint is one-year PFS with the goal to increase that from 56% in the control arm to 76% in the test arm that includes TRSC-102. In terms of interim assessments prior to that, I wouldn't count on anything per se, but as you point out, that's out of our hands and the hands of the CTEP investigators running the trial. But I wouldn't count on anything happening prior to the actual determination of the one-year PFS.

Perfect. No, appreciate that confirmation, Charles. Thanks. That does it for me. Thank you, Matt.

Thank you. And I'm not showing any further questions in the queue. I'll turn it back over to Dr. Thurow for any closing remarks.

Well, I'd just like to thank everyone for their participation, questions, and listening. I wish everyone a great day and look forward to talking to you next quarter.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone have a great day.