Medicenna Therapeutics Corp (MDNA) 2022 Q3 法說會逐字稿

Greetings, and welcome to Medicenna Therapeutics Third Quarter Fiscal 2022 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Dan Ferry of LifeSci Advisors. Please go ahead.

Thank you, operator, and thank you all for participating in today's conference call. This morning, Medicenna issued a press release providing financial results and corporate updates for the quarter ended December 31, 2021. If you have not seen the press release, it is available on the Investors page of Medicenna's website.

Before we begin, I would like to remind you that certain statements and information shared during this call constitute forward-looking information within the meaning of applicable securities laws and relate to the future operations of the company and other statements that are not historical facts, including statements related to the clinical potential and development of the MDNA11, including expected milestones, MDNA55 and BiSKITs programs, the potential of the Superkine platform, partnering activities, cash runway and the presentation of additional data.

All statements other than statements of historical facts included in this conference call, including the future plans and objectives of the company are forward-looking statements that are subject to risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the company's expectations include the risks detailed in the recently filed Annual Information Form, management's discussion and analysis and Form 40-F of the company and in other filings made by the company with the applicable securities regulators from time to time in Canada and the United States.

Listeners are cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties and other factors, many of which are beyond the control of the company. You are cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management, may prove to be incorrect, and actual results may differ materially from those anticipated.

Forward-looking statements contained in this conference call are expressly qualified by this cautionary statement. Except as required by law, we do not intend and do not assume any obligation to update or revise publicly any of the included forward-looking statements only as expressly required by Canadian and United States securities law.

Now I will turn the call over to Dr. Fahar Merchant, President and Chief Executive Officer of Medicenna Therapeutics. Fahar?

Thanks, Dan, and thanks to all those listening on the call today. In addition to Dan, I'm joined by Dr. Martin Bexon, our Acting Chief Medical Officer; and Liz Williams, our Chief Financial Officer.

Last quarter was highlighted by the first clinical results for MDNA11, our beta-only and long-acting IL-2 super agonist being evaluated in our Phase I/II ABILITY study as a treatment for solid tumors. Today, I will recap these findings and also review some additional recent accomplishments and preview the key inflection points we expect to achieve throughout the remainder of calendar 2022.

So starting with our ABILITY study, I will speak briefly about our recent update on safety and pharmacodynamic data from the first 2 dose escalation cohorts while leaving it to Martin to discuss the results in more detail.

Now I'd like to frame my remarks in the context of a comment I made on last quarter's earnings call. Back then I mentioned that the study's initial efficacy updates would be an important check to confirm that the best-in-class properties of MDNA11 observed in mice and nonhuman primates would translate to humans. These features are largely derived from the Superkines IL-2 receptor binding profile, which allows it to selectively bind to the IL-2 receptor beta subunit, which induces an anticancer immune response without binding the IL-2 receptor alpha subunit, which is associated with toxicity and the activation of immunosuppressive immune cells.

I also mentioned how we believe that our differentiated long-acting IL-2 Superkine would translate in the clinic with a more efficacious profile when compared with other IL-2 variants in development. Today, I'm pleased to say that the preliminary data we have shared, although very early, are encouraging and supportive of this differentiation thesis, which is a positive signal for MDNA11's continued development.

Looking ahead, we intend to continue to advance the ABILITY study in Australia, where patients are currently enrolled; in the United States, where we are pleased to announce we have recently opened our first site for patient enrollment; and Canada, where we expect to open our first site in the current calendar quarter.

We remain on track to report our first set of efficacy results from the early dose escalation cohorts from ABILITY in mid-calendar 2022 and thereafter establish the recommended Phase II dose prior to commencing the monotherapy and combination arms of the dose expansion stages of the clinical trial.

Now as part of our studies to ensure MDNA11's efficient development, we are gaining important external validation and key insights from the clinical and scientific communities. During the fiscal third quarter, we presented murine and nonhuman primate data on MDNA11 at the annual Triple Meeting and recently announced the peer-reviewed publication of its preclinical data set in the Journal of Immunotherapy for Cancer.

I have discussed this data set extensively on past earning calls, so I won't go through it in detail today, but we'll say that MDNA11's preclinical data indicate that the long-acting Superkine may overcome the safety and PK challenges of the FDA-approved IL-2 drug Proleukin and suggest that you may have superior efficacy compared to completing not alpha IL-2 variance.

Our efforts to advance MDNA11's development with the help of the scientific and clinical communities are also highlighted by the recent formation of our Development Advisory Committee and Scientific Advisory Board. These are each made up of deeply experienced industry leaders with wide-ranging expertise. They include both individuals who have directly contributed to MDNA11's development in the past and fully external key opinion leaders with expertise in cancer immunotherapy, immune engineering and human immune system profiling.

We expect their experience, expertise and insights to be invaluable assets that will contribute significantly not only to MDNA11's clinical development, but also to our efforts to bring assets derived from our BiSKITs platform into IND-enabling studies and the clinic.

As a reminder, our BiSKITs platform generates (inaudible) immunotherapeutic agents that incorporate 2 functionally non-overlapping mechanisms of action with the goal of achieving synergistic therapeutic effects. This may lead to enhanced safety and efficacy and ultimately allow for the treatment of more aggressive and recalcitrant cancers that are not adequate addressed with currently available immunotherapies.

First, using directed evolution to generate highly selective Superkines together with protein scaffolds for half-life extension makes our platform highly versatile without the challenges of PEGylation or conjugation-based technologies. Thus, we can arm oncolytic viruses, CAR T-cells or other cell-based therapies to potentially enhance their efficacy. This is not possible with PEGylated cytokines or those that rely on complex masking technologies to achieve selectivity and half-life extension.

Second, using albumin as a scaffold has the potential to enhance the accumulation of Superkines in the tumor microenvironment and tumor-draining lymph nodes, which has the potential to stimulate the cancer-fighting immune cells where it is needed the most.

Finally, our technology allows us to easily fuse Superkines to checkpoint inhibitors, cytokines, Superkines or other antibodies using well-established genetic techniques to generate a versatile pipeline within our BiSKITs platform.

Looking forward, we remain committed to our Superkine and BiSKITs program and plan to present additional preclinical data on a lead candidate at a major medical conference in Q2 of calendar 2022.

Shifting gears, I'd like to give a quick update on MDNA55, which is our Phase III-ready empowered IL-4 Superkine being developed as a treatment for recurrent glioblastoma. In October 2021, the design of the planned open-label hybrid Phase III trial of MDNA55 in rGBM was highlighted in a peer-reviewed manuscript published in Lancet Oncology.

In addition, at the recent Society of Neuro-Oncology Annual Meeting in November, the planned Phase III trial of MDNA55 was the subject of an oral presentation honored with the abstract Award for Excellence in Clinical Trials. We continue to pursue a partnership to facilitate MDNA55's further development and commercialization and remain in active discussions towards this goal. We will provide an update on our activities as soon as that is possible.

And with that, I will hand the call off to Martin to discuss our recent data update from the ABILITY study and provide additional detail on the MDNA11 program. Martin?

Thank you, Fahar, and Good morning, everyone. I'd like to start by saying this is my first earnings call as Medicenna's Acting Chief Medical Officer. And I'm very pleased to have the opportunity to serve in this role while continuing my work as the ABILITY studies medical monitor.

I've been working with the company over the past 5 years, and I'm excited to be leading its highly talented clinical team as we work to deliver transformative cytokine-based immunotherapies to patients in need. On today's call, I'll be focusing on the data we've seen in the ABILITY study to date, where the trial is now and what we can expect to see from it over the coming months.

Before I do this, however, I just want to quickly remind all listening of the goals of the MDNA11 program. MDNA11 was designed to overcome the challenges seen when using native IL-2, which is an FDA-approved product and known as Proleukin to treat solid tumors. Proleukin must be dosed in the ICU every 8 hours for 5 days, which severely limits its utility. These challenges stem from Proleukin's short half-life and poor safety profile, the latter of which is caused by its relatively high affinity for the IL-2 receptor alpha subunit that Fahar mentioned earlier.

To overcome the PK challenges of Proleukin, the IL-2 super agonist that forms the core of MDNA11 is fused to albumin. To address producing safety challenges and provide potent anticancer activity, the IL-2 superagonist was designed with no affinity to the IL-2 receptor alpha subunit and enhanced affinity for the IL-2 receptor beta subunit. Given the importance of IL-2 receptor beta in the activation of anticancer immune cells and the fact that PEGylation reduces IL-2 receptor beta binding, we believe MDNA11's novel design positions it a potentially best-in-class IL-2.

Now a key objective of the ABILITY study is to begin testing this hypothesis in the clinic. And I'm pleased to say that the early data that we've seen from the trial's first 2 dose escalation cohorts are consistent with our expectations. These data show MDNA11 inducing preferential increases in anticancer CD8 T and natural killer cell proliferation with limited stimulation of protumor T rates as well as favorable changes in markers of immune activation, such as TIGIT Expressing Cells, LAG3 Expressing Cells and PD1 Expressing Cells.

These early pharmacodynamic results indicate that MDNA11 is activating cancer-fighting immune cells and having the intended biological effect that comes with stimulation of the IL-2 receptor beta in the absence of the IL-2 receptor alpha activation.

Now these results are analyzed more closely. There are a couple of key points I would like to emphasize. First, these are for ABILITY's first 2 dose escalation cohorts, and we expect to see increased levels of immune cell stimulation as data are collected at higher doses. Second, the levels of immune activation we are seeing in these early cohorts compare favorably to what has been seen with competing not-alpha IL-2 variants.

In fact, past clinical studies have shown that when a not-alpha IL-2 variant was administered at doses similar to the IL-2 content being evaluated in ABILITY's first 2 cohorts, no increase in anticancer CD8 cells was observed. This provides us evidence that at initial dose levels, our expectations for MDNA11 have been exceeded against its target profile.

We are now dosing patients in the trial's third dose escalation cohort. As we continue to move the trial forward and report data from this and any subsequent dose escalation cohorts, we hope to see dose-dependent increases in markers of immune cell activation, higher levels of CD8 and NK cell stimulation relative to Treg activation, resulting in a pro-inflammatory tumor microenvironment.

We also hope as we begin to gather data from kinetics and the duration of clinical effects in humans that MDNA11 PK profile might facilitate dosing every 2 or 3 weeks. Given the extended PD effects we have observed pre-clinically, this could position MDNA11 as a convenient option to pair with a number of checkpoint inhibitors.

In addition to the dose escalation phase, the ABILITY study will also include 2 dose expansion phases designed to evaluate MDNA11 as a monotherapy and in combination with a checkpoint inhibitor. It will enroll patients with various solid tumor types in monotherapy and combination settings. Two tumor types included in these cohorts that will be of particular interest are advanced renal cell carcinoma and metastatic melanoma as they are known to respond to Proleukin, but to date have not shown comparable responses to new longer-acting IL-2 variants currently in the clinic.

We therefore believe evaluating MDNA11 in these tumor types is an exciting opportunity to demonstrate single agent activity and best-in-class potential. We may also enroll patients with other selected tumor types as we work to exploit MDNA11's pan-tumor approvability.

Looking ahead, we remain on track to report an initial update on tumor control data from the early patients in the dose escalation cohorts in mid-calendar 2022 as well as additional updates throughout the year. As the data mature throughout calendar 2022 and beyond, we are hoping to see objective response rates that meet or exceed those generated with agents in the same drug class, along with deeper responses, improved durability of response and a more favorable safety profile for comparable patient populations.

With that, I'll now hand the call off to our CFO, Liz Williams, to discuss our recent financial results. Liz?

Thank you, Martin, and Good morning, everyone. Before I begin, I would like to note that all references are in Canadian dollars unless otherwise noted. I'm pleased to report that Medicenna continues to maintain a strong cash position as we had cash and cash equivalents of $23.4 million as of December 31, 2021.

Based on our current projections, we believe this will be sufficient to fund our operations through to the end of calendar 2022, including through the preliminary efficacy data readout from MDNA11 Phase I/II ABILITY study. Net loss for the quarter ended December 31, 2021, was $4.8 million or $0.09 per share compared to a net loss of $5.3 million or $0.11 per share for the quarter ended December 31, 2020. The decrease in net loss for the quarter ended December 31, 2021, compared with the quarter ended December 31, 2020, was primarily the result of decreased research and development expenditures.

Research and development expenditures of $2.9 million were incurred during the quarter ended December 31, 2021, compared with $3.2 million incurred in the quarter ended December 31, 2020. The decrease in R&D expenses in the current fiscal year's quarter is primarily attributable to reduced CMC costs associated with the manufacturing of MDNA11, which was ongoing in the prior year period and predominantly complete as of September 30, 2021.

Decreased discovery and preclinical expenses associated with the MDNA11 IND-enabling studies ongoing in the prior year period and predominantly complete as of September 30, 2021; decreased funding on licensing and patent legal expenses due to costs incurred in the prior year period associated with MDNA55 market research activities; and the timing of patent prosecution as well as a decrease in regulatory cost in the current year period, resulting from costs associated with the end of Phase II meeting for MDNA55 incurred in the prior year period.

These decreases were offset by higher clinical costs in the current year period due to the MDNA11 ABILITY study, for which the first patient was treated in September 2021 as well as higher personnel costs associated with increased head count to support ongoing activities.

General and administrative expenses remained consistent year-over-year with $2.0 million incurred during the current quarter ended December 31, 2021, compared with $2.1 million during the quarter ended December 31, 2020. For further details on our financials, please refer to our financial statements and management's discussion and analysis, which will be available on SEDAR and EDGAR respectively.

With that, I'll now hand the call back over to Fahar.

Thanks, Liz. Before we move on to the Q&A, I'd like to thank Medicenna's employees, partners and investigators for their hard work over the past months as well as the patients who have enrolled into our ABILITY study. The progress we detailed on today's call would not have been possible without these individuals, and we are grateful for the talent and dedication they have consistently displayed.

Looking ahead, we believe we are well-positioned to successfully execute on our objectives and achieve the value-creating milestones put forward on today's call. By leveraging the power of our Superkine and BiSKITs platforms, we expect to grow and advance our pipeline of novel cytokine-based immunotherapies. This in turn is expected to fuel our sustained growth as we work to deliver value to our shareholders and most importantly, improve the lives of patients with urgent unmet medical needs.

And with that, we will now open the lines for questions. Operator?

(Operator Instructions) The first question comes from the line of Matt Biegler with Oppenheimer & Co.

I wanted to touch on the safety from the ABILITY trial thus far. Have you guys seen any hypertension or flu-like symptoms? And if you haven't, why? What do you think would be accounting for decoupling those nice increases in T-cell responses that we've seen with the usual side effects of IL-2 agonist? That's my first question.

And my second is more of a macroeconomic question. Obviously, we're expecting a readout from Bristol-Myers and Nektar's PIVOT IO trial in frontline melanoma soon, probably this quarter. I'm just curious, I want to hear your thoughts on kind of what you're going to make of the data and whether or not you think it's going to have a ripple effect kind of on the entire IL-2 space. And if that trial doesn't work, what does that mean for MDNA11?

Great. Thanks for participating and your question. With respect to safety, we will be providing an update as we enroll more patients. As you can imagine, we've just have had data so far in just 4 patients who are in dose level 3 at the moment and collecting those data. As soon as we have a better feel for trends and so on and so forth, we will be able to disclose more information in the coming months, most likely at the ASCO conference. The -- I don't know, [Martin], do you want to add anything else to that?

I think not particularly except to say that we haven't seen any DLTs in the study so far.

Yes. Thank you. So we are -- as I said, we are progressing with enrollment in dose level 3, which is now at the mid-doses. And with respect to your other more sort of macro question, I would say the general consensus is that it's likely that we will see data that are not potentially exciting with respect to the next data that's expected to be revealed in the next weeks or months.

The impact, I'd say, for the rest of the IL-2 space is, I think analysts, investors generally are aware and are quite familiar with the fact that [Neoleukins] Bempeg was the first one out there, and there were certain and many limitations associated with the technology and the approach that they use. And PEGylation has been known to interfere with binding of not only to the alpha receptor, but also substantially affecting binding to the beta receptor and therefore, not having the best potential for stimulating your cancer-fighting immune cells. I would say that that expectation has been baked into the IL-2 company's share prices.

I don't think there's a big expectation that Nektar somehow will pull a rabbit out of the hat. And therefore, I'm not expecting it to have much of an effect with the other approaches that we know are far superior to those being pursued or incorporated in a Bempeg molecule. So that's all I can say and sort of it's difficult to predict and read the crystal ball, but I think that's sort of likely the expected outcome and hopefully not affect the other IL-2 programs that are sort of much better designed.

Okay. That's helpful. Maybe if I could just try to prod a little bit more on the safety question from ABILITY, have you seen any grade 3 hypotension or flu-like symptoms yet or will we just need to wait until midyear?

Yes, we'll probably need to wait for some additional cohorts to be treated before we start disclosing or providing adequate data going forward with respect to any of those DLTs that we come across. But at the moment, as Martin mentioned, we haven't seen any DLTs so far.

The next question comes from the line of David Martin with Bloom Burton.

First question, how many cohorts do you expect to report on at the mid-year efficacy readout and what are the doses?

The doses are going to be determined by the Safety Review Committee as we escalate. So we can't really predict. As I said, we are already at dose level 3. We are certainly looking at following through with the DLT monitoring period. So we can't really say how many levels that we will be expanding to or what the next doses might be.

It's going to be determined very much by a review of current data at the current dose level by the Safety Review Committee. And maybe I should pass it on to Martin, if you have anything else to add. Martin? Or I think Martin was tight on time, he might have left the call. Okay. So happy to answer later on. Yes, go ahead.

Have you noticed any slowdown in recruitment with Omicron? Is the third cohort taking longer than the first 2?

Not actually, it's not made any difference to recruitment rate. So we are good and we've just announced that our first site in U.S. has now opened for enrollment. So as that proceeds, we would not expect to see any slowdown. We haven't seen that issue yet, at least in Australia.

Okay. You talked about your confidence that the subunit binding selectivity is going to translate into superior efficacy in the clinic. Just to be clear, is that based just on the biomarker data or are you seeing signals of efficacy?

Well, it's too early to predict or sort of being able to see signals of efficacy because we would need multiple cycles or multiple CT or MRI scans from these patients. We are collecting those data. But the early indications have been pretty much driven by the fact that we've seen the stimulation of lymphocytes, the CD8 T cells, the NK cells at much, much lower doses based on IL-2 content in MDNA11, when you compare with 3 or 4 other companies that are ahead of us and have presented or published the data with respect to the same parameters that we are measuring.

So that's basically what we feel that we've seen that so far in the first 2 dose cohorts. We've also seen some similar effects in our nonhuman primates as well as our murine models. So basically, projecting that as we escalate the dose, we should see continued stimulation of the cancer-fighting immune cells.

And when you say stimulation of the CD8 T cells, that's both naive and activated CD8?

Correct. Correct. Yes. And the other thing is also that when you look at the data, I think we presented those to show that the CD8 T cell population, the ones that are expressing PD-1, TIGIT, LAG-3, all of them indicate that that sort of increase of about 30% to 50% in those populations would indicate that those are activated CD8 T cells. So that's -- clearly, we're not able to distinguish between naive and CD8 -- activated CD8 T cells, but that sort of gives us an indication that's what's happening.

Okay. You mentioned the ASCO. Is that for the further biomarker readout? Or is that also for the efficacy readout? And if not for the efficacy, will there be a meeting you present the efficacy out?

Yes. So we're expecting to present efficacy readout based on the dose escalation portion of the study and we're expecting that in the middle of this year. Question is whether we have an appropriate conference to present those data at that time. If not, then we will do it via press release. If, however, we have those set of data available and if we get accepted to present our data at ASCO, we should do that during ASCO, but we are currently expecting that we'll have adequate number of serial CT scans from the patients by the middle of this year.

Okay. And last question on MDNA55, is your expectation still that you'll see some upfront dollars with the deal that you strike?

Well, that's our objective. And as we've mentioned that we are continuing those discussions, and we'll provide an update as soon as we have that.

The next question comes from the line of Swayampakula Ramakanth with HC Wainwright.

This is RK from HC Wainwright. Quite a few questions on ABILITY have been asked. But just in general, just thinking about timing and stuff like that, so when we -- when do you think the ABILITY could complete so that you can -- the initial part could complete so that you can get on to the combination studies based on what you're seeing in terms of enrollment?

Right. Thank you, RK, for your question. Yes, we -- the plans are at the moment that we will finish the dose (inaudible) in the first half of this year. After that, we should have established a recommended Phase II dose, which will mean that we should be -- to conduct the monotherapy dose expansion and that should start in Q3 of this year. We will also look at doing the dose expansion with the combination at the same time in the sense they will run in parallel.

However, we will have to have a run-in period with the combination with the checkpoint inhibitors. So although they will run in parallel, the combination will lag behind by a few weeks or so. So that's the plan, and we expect that those 2 expansion arms, the enrollment should be completed by the end of this year. Hope that answers your question.

So speaking about -- yes. And speaking about the combination with the CPI, is this CPI a physician's choice based on indication? Or is this going to be something specific that would be decided when we get the study going?

Yes. No, it will be specific. It's not going to be a physician's choice. We will keep -- to make sure that all patients receive the same checkpoint inhibitor and we'll announce that checkpoint inhibitor before we obviously start that combination arm.

Okay. So talking about the BiSKITs program, what needs to get done before you can put a molecule into the clinic? And what are your initial thoughts about what sort of indications or what sort of combinations you would go for based on that it has a huge potential that can be combined with various things that you were talking about earlier?

Yes. So we should be able to provide better color on the BiSKITs molecule at sort of a conference coming up in the second quarter. So we will be providing a lot more update on those BiSKITs program, including the potential indications that could be pursued and the work that would need to be done before we enter the clinic would be your typical IND-enabling studies, the scale-up of manufacturing, et cetera. So those activities would have to be completed first before we start a clinical program which will not likely start anytime before -- or this year. So it will be in 2023.

The next question comes from the line of Kumar Raja with Brookline.

Sorry, I'm Shubhendu calling in for Kumar from Brookline. With regards to MDNA11, how long does the drug persist at the tumor side? I'm just trying to get an idea of how long-lasting the therapy would be.

Yes. So we sort of at the moment cannot do that until we have the sequential biopsies from patients. And it's sort of difficult to determine how long it is at the tumor site. The only thing we can measure is the duration of the drug in systemic circulation, but it's not practical or would be very challenging for us to take tumor tissues from patients to measure those levels in the tumor in the clinical trial. So that's something that we would not be able to disclose.

It's challenging unless we have multiple series of biopsies prior to treatment and during treatment. So although the plan is that we will be conducting analysis of tumor biopsies prior to and on treatment, those biopsies are likely to be just paired biopsies. So they will not have a series of biopsies to see what the changes are occurring at the tumor microenvironment. But certainly, if those biopsies are carried out pre- and on-treatment and if we are able to detect IL-2, that too will be a sort of a difficult challenge because you'd have to develop methods for that. And so -- and it's unlikely we'll be able to actually see what the levels are in the study itself in the clinical trial.

Okay. Yes. Also with regards to MDNA11, do you expect similar levels of antitumor response across the multiple solid tumors in your patient population? Or is the expectation that some tumor types would respond better than others?

I think it's going to be dependent on different tumor types. At the moment, it's too early to say because we have tried different tumor types in animal models, have seen different levels of activity depending on the tumor type. So we expect that that will be the case also. It would be also dependent on the tumor microenvironment. And of course, what the patient has undergone the prior treatments, the patient has received et cetera and the immune status prior to enrolling in the study. So there are so many different parameters that could affect not only the tumor type, but also the patient and the patient's prior lines of treatment as well.

Right. Yes. Just one final question. Since the MDNA Phase II is enrolling at international sites, do you see -- how do you see the regulatory landscape coming together later on?

Well, I think like any other global clinical trial that would play a role. At the moment, we've been able to navigate that relatively comfortably with the early Phase I/II clinical trials. It's basically not a big issue. But of course, as you would enter into larger global trials, this is done carefully with getting feedback and advice from each of the different regulatory authorities to make sure that these protocols are acceptable first and foremost by the FDA and then other regulatory agencies.

And there is general good consensus around the study designs and so on and so forth. So I don't expect that to be an issue. That's not a large challenge. It's basically understanding the global regulatory space and implementing and putting protocols together, they are consistent with being able to conduct a trial in multiple jurisdictions.

The next question comes from the line of David Bautz with Zacks Small-Cap Research.

So I'm trying to understand how to put this twofold increase we're seeing in the CD8 to Treg ratio into context. I'm curious, is there data out there on what the natural course for that would be for a cancer patient as their disease progresses? I mean does it fluctuate? Does it steadily decrease and while you're seeing an increase? I mean, do we know what you would normally see in these patients?

Well, I think the general consensus is that you would want to see the ratio increase as a patient is receiving treatment. Clearly, if a patient's tumor is progressing, one would expect that the ratio would be heading in the opposite direction, may be decreasing. So there's not much data out there to show what's actually happening. I think it's difficult to extrapolate from data that you obtain from peripheral blood. But at least we would see that if you are seeing those changes occurring in the peripheral blood, at least based on TILs studies that we have done in animal models, we have seen those changes in the peripheral blood reflect very nicely as to what's happening right at the tumor microenvironment where those changes are even more dramatic, meaning that the CD8 to Treg ratios tend to be much, much greater right at the tumor sites.

But we haven't been able to do that in this study yet. Of course, as we get more patient biopsy samples, we will be able to see what those trends look like. So I can't say as to what the trend lines are, but one would expect that the CD8 to Treg and NK to Treg ratio would increase as the patient is benefiting from treatment.

Got it. Okay. And now when you start dosing patients here in the U.S. and then in Canada, are you going to start at the dose level that's currently being used in Australia? Or do you have to go back to previous -- to the previous dose levels to start in the U.S. and Canada?

Good question. Yes, no. So we will be starting and continuing with the dose escalation. So it will not require us to go back to the early doses that we have already tested in Australia, it would be a seamless transition to the next higher dose level from the data we get from Australia. So that certainly helps and will not somehow put us back to where we started from.

The next question comes from the line of David Martin with Bloom Burton.

The combination with checkpoint inhibitor, will the patients you recruit into the trial be failing that checkpoint inhibitor and you'll be adding the MDNA11 to see if you can get them to respond? Or will they be naive to the checkpoint inhibitor?

At the moment, the protocol allows patients that are either naive and also those that have failed checkpoint inhibitor therapy. So we're not segregating those patients.

Ladies and gentlemen, we have reached the end of question-and-answer session. And I would like to turn the call back to Mr. Fahar Merchant, CEO, for closing remarks. Please go ahead.

Thank you very much. Thank you all for listening to today's call. We look forward to our pipeline's continued advancement and we'll keep everyone updated along the way. Take care, and goodbye.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.