Molecular Partners AG (MOLN) 2020 Q2 法說會逐字稿

Ladies and gentlemen, welcome to the Half Year Results 2020 Conference Call and live Webcast. I am Maria, the Chorus Call operator. (Operator Instructions) And the conference is being recorded. (Operator Instructions) The conference must not be recorded for publication or webcast -- broadcast.

At this time, it's my pleasure to hand over to Seth D. Lewis, Senior Vice President, Investor Relations and Strategy. Please go ahead, sir.

Thank you, Maria. And thank you for joining us today on the Molecular Partners First Half 2020 Financial Results Call and Corporate Update. My name is Seth Lewis, and I'm joined this morning by Patrick Amstutz, President and CEO; and Andreas Emmenegger, CFO.

On today's call, management will make a series of prepared remarks, and then we'll open up the call for questions. Before we begin, I would like to remind you that this call is being recorded and will be available for replay. Management will be making certain forward-looking statements during the course of this presentation, and there are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by the statements and forecasts. For those of you listening on the replay, this call was recorded on August 26, 2020.

I will now turn the call over to Patrick Amstutz, President and CEO of Molecular Partners. Go ahead.

Hey, Seth, thanks for the introduction. A warm welcome to everyone on the call. I think the first half of this year was a special one for all of us and especially, special for Molecular Partners. We have to navigate quite some movements and especially on the viral side, we took an active stance and are now also a virology company. And I would like to use this call to highlight the progress and also what we have done on the COVID front.

I will start with reviewing highlights of the first half. I will then hand over to Andreas for the financial results, wrap up the presentation with an outlook and then open the floor for questions.

Slide 4. So -- maybe Slide 5. So the first-line here is really about the team. And this first half year was really a roller coaster ride for us. So we have many good and also a few setbacks. And in these moment, you have to depend on the team. And I'm personally very grateful to have the team here in Zurich and in the U.S. with Seth. And team spirit and work that has made us work through all these movements in a way that we were able to generate value for patients and shareholders. So I'm grateful for that. And the first-line here should be in very bold statements. And while it is only 1 line, I think it is the fundament of all the value and work we have done. And in these times of global pandemics, I think the team cannot be highlight and stressed enough. And I think that's what I want to do in the beginning and also when I will end the call.

In the blue part, that's the pipeline, the progress, and I will start with the setback, which is the complete response letter on abicipar that AbbVie, our partner, has received. We made very good progress on the immuno-oncology front with the local agonist. I will speak to those a bit later. Also with peptide-MHC that makes good progress and the clinical programs. The last line in the blue box is the COVID DARPin, an area we did not even though it exists in the last earnings call, the 2019 full year call. So this -- all of the data we kind of did, and we're on our way towards clinics with that program was literally done in the first half of this year.

We are well financed and also supported by our key partnerships, 1 with Amgen, 1 with AbbVie.

On the financial highlights, we have an ongoing strong position of CHF 64.4 million in cash and short-term deposits, that's of June 30. Let me highlight that as of July, we added another CHF 80.2 million to the balance sheet there from the share capital increase. We have a net cash outflow of CHF 27.9 million and we have now slightly put up the guidance to reflect the COVID program to CHF 65 million to CHF 75 million for this year.

On the team side, I would like to highlight that we have strengthened our Board, including Sandip, Michael, or Mike, and Vito to join our Board and strengthen it for the years to come.

And moving to Slide 7 to the R&D side, obviously, the centermost program is the COVID program. I will talk to that, how we are advancing that. We're aiming to have the first patient dosed in Q4. We have data, and I will also present some data that has not been in the full public domain, semi-public domain in the sense that we have spoken about it, but not shown it. On some hamster data. And then we secured partnerships with AGC Biologics and also then with the Swiss government to support the program progress.

On the oncology side, we had good movement on the IO side, where our focus is that MP0310, or AMG 506, 317, those are both local immune agonists, also peptide-MHC has moved well, and a lot of that data was presented at AACR. We also have progress on MP0250 and 274 with 274 concluding recruitment, and we will present more data in the second half of the year. This is less in our focus as it belongs to the validated targets with MPO250, 274 and abicipar. And where our focus is more on the innovative side, on the immuno-oncology side and obviously on the COVID program.

Ophthalmology, I have talked about in the intro. AbbVie and we have received a complete response letter, and AbbVie is now determining the next appropriate steps also in discussions with FDA.

Let me turn to the COVID program, and this is -- these pictures are taken from a manuscript that we have uploaded to bioRxiv and that should become available literally in the coming hours, let's call it, in the coming days. So you can also read in much more depth what this is all about.

On the picture, on the left-hand side, you see the spike protein. You see it consists of different domains. This is the open conformation. The top side of the protein, it's called RBD, or the receptor binding domain. That's where most of the antibodies if they are natural antibodies, therapeutic antibodies bind and that's the normal side of blockage. As if you block there, you block the virus from actually making contact to human cells. Our first candidate 420 combines 3 RBD binders. These are different binders to each other. So it's a tri-DARPin, and it has 2 HSA binders for long half-life. While we were working on that, we also did a multi-mode, that's on top of 420, so we call it MP0423, and we're assessing the candidate ready to move forward actually in the coming days, weeks. And the multi-mode have includes the RBD inhibition, but also has an NTD and S2 binder, and they both inhibit, and I will also show some data and explain why this is also valuable next to the RBD binder.

Short update on the development status. And I think in this program, manufacturing is key. As with a global pandemic, the shortage of actual drug would be a key problem. And even if all antibodies and DARPins are successful, I think we're all working together to supply the world with drug, and that's why manufacturing is key. We have secured manufacturing slots at AGC Biologics, 100 liters for earlier runs, 1,000 liters for more, let's say, later-stage development and early distribution. The first run is actually running as we speak, the first GMP run to enable a first-in-human trial, which we are planning to start in Q4 this year. We're also in close contact to different consortia to streamline clinical development. There's a lot of master protocols and a lot of support throughout the globe, I would say, industry to make all these programs successful, as I think this is one of the moments where we don't see each other as competitors but more as allies in the fight against this virus.

We have key support by the Swiss Government, that's on the one hand, with Swiss Army Lab because of all the viral work for us. But also some financial support as the Swiss Government secured the first 200 doses of MP0420 if needed.

Let's look at some data, and this is the Hamster model data that we will -- or are publishing as we speak. You see we looked at different dose levels, and we see dose-dependent activity of MP0420 in this Hamster model. Hamsters are maybe the most relevant model as they develop the disease. And on the right-hand side, if you look at the 10-milligram per kilogram arm versus the vehicle, you will see this is a section of the lung. You recognize the holes those are alveoli. They should be open that the oxygen can go through. And that's what happens if you are protected by a drug like MPL0420. While in the vehicle group, you see heavy inflammation, immune cells infiltrating and actually destroying the lungs.

So what we see here is really a great picture showing the activity of the drug, the proof-of-concept in this model. This in turn also shows that we get lung exposure, we could also measure lung exposure in different setup and validate the human cell model in binding DARPin to help the other DARPins to reach the lung.

That in vivo efficacy also confirmed our mode of action, which is not Fc-driven. So we don't have an immune function. And this could be a benefit as we don't carry the risk of antibody-dependent enhancement of the inflammation. It is still a debate. It is unclear if it happens, in how many patients it happens. For our drug, this is just no question mark. We were very happy to see these results. And obviously, this was one of the key elements we needed to have in place to move the molecule into formal development. The doses where we see activity are very much in line with the antibody doses of the best antibodies showing similar activity.

On the next slide, it's a snapshot on manufacturing. So we're now in GMP manufacturing. We can confirm yields of 12 to 17 grams per liter in bacteria. This allows us fast progress, no lengthy cell line development, very high yield, as I just pointed out, simple purification steps and process duration to product in 7 to 10 days, rapid turnaround to allow us to generate more material in less time. And again, securing access to production slots in 1,000 and 100 liters. Obviously, if this product is successful, we can go to much larger fermentors, and we're also looking into that.

Another aspect that we want to point out in this call is definitely the stability of the drug. What you see here is the heat stability and the stress testing of the DARPin. We have elevated the temperature up to 90 degrees in these assays, and we see no unfolding, no aggregation up to 95 degrees. So these are highly stable candidates, or MP0420 is a highly stable candidates, which will allow long-term shelf life and possibly even shelf life in a not refrigerated state, a room temperature, making it a drug that can be actually distributed around the globe in a simple and cost-efficient way.

The last slide I have is now jumping from 420 to 423. Let's quickly recap. So most antibodies mixtures or also natural antibodies block the receptor binding domain. This is totally logic. As this domain binds the human cell and it is also sort of restricted from mutations as it might lose receptor binding. And so this is, let's call it, highly conserved part of the virus, so it makes sense to target it. What we thought is that the selection or the pressure on this domain, given all the antibodies out there, including natural antibodies and vaccines, is the highest. So we set out to make another candidate. So while 420 takes the logic of mode, we also said we would do an additional candidate that includes, but is not only dependent on the RBD inhibition. That's MP0423. And as I said, we're about to select that candidate. If you look at this graph, you see the experiment we do is we take, we inhibit or we block virus, and you measure a curve. And you see it, in this case, around 100 picomolar, a bit above 100 picomolar for most. We then add soluble RBD. So this soluble RBD will bind to the drug and prevent the RBD part of the drug so the targeting part to block the virus. So it's like a protection assay. And you see the 420 activity is highly reduced if you add soluble RBD, preventing the drug from doing its action. And that can stimulate massive mutations. We're not talking 1 or 2, but massive mutations in the RBD.

Now 423, if you add soluble RBD and you lose all binding of 1 domain, you still have 2 DARPin domains binding other parts where there is less selection pressure on the globe. And they still inhibit with very, very slight less potency. And so we still have full activity even if the RBD would massively mutate. So that's why we think there is value in both. There is obviously rationale to a tri-Darpin for RBD, but there's also rationale for the multi-mode, and we are prepared at this point in time to move both forward.

Let me summarize this program. With MP0420, we have a best-in-class approach. We have highest potency. We have long activity and safety that's the HSA binding. So we expect a 3-week half-life in human. We have low-cost and high-yield production, possibly subcu injections, MP0420 is very soluble, so we can concentrate to high amounts. And we will be in the clinics this year, quarter 4.

On top of that, we have another candidate that addresses the global Achilles heel of the RBD targeting and it comes with all the benefits of MP0420, and we can be in the clinic early next year.

With this and all of this work and big thanks to the teams, it’s self-organized, it's literally working shifts, big thanks to the teams working on it. I would turn to our, let's call it, core business, where we have expertise and are continuing to build expertise in immuno-oncology.

Here, I have picked out 1 mode of action, which is the tumor local agonist. Just to remind you, these are multi-specific DARPins, 1 binds FAP, that's a stromal target, another receptor agonist on an immune cell, either 4-1BB or CD40. If you target only 4-1BB or CD40 alone on the resting immune cell, nothing happens. Only if you co engage with FAP, you get site-specific activation of for 4-1BB, T cells and NK cells. And for CD40, you expand that to dendritic cells, macrophages and B cells. On the right-hand side, you see a panel of different solid tumors stained for FAP, and you nicely see overexpression of this in the tumor stroma. And we don't want to make the point here that uterus is less attractive for this drug than the pancreas. Wherever you see staining, you will have enough clustering for full activation. So the data that has been newly released now was on MP0317, so the CD40. This data was presented at AACR what we're targeting here is dendritic cells, macrophages and B cells. And what we're doing is we're comparing an active antibody that also will then bring systemic activation with the DARPin in cluster mode and without. With clustering, that's the blue line, without clustering, it’s orange. And you nicely see without clustering, none of these target cells are activated, while with clustering, the gray and the blue line overlap likely, so we get full activity as a systemic active antibody but without systemic activation.

We took this to preclinical models to a tumor model. This is shown on the next slide, 17. This was presented at AACR, and you nicely see how the control, the non-clustered DARPin has no activity. So the tumor growth in the vehicle group. While the local activity and the antibody have overlaying curves, so local activity and systemic activity go hand-in-hand full activity without side effects that's shown on the right-hand side of the panel. Here you see in gray, the antibody induces cytokine storm that would lead to a cytokine release syndrome in a patient as you had massive peaks of inflammatory agents. Obviously, the negative control and the vehicle don't do that. And the local activity that leads to the same tumor shrinkage as systemic activity might have some leakage into the system. But by far, I think we can conclude, this is highly safe orders of magnitude, less systemic activation than the antibody underlying and, let's say, proving our idea and principle of local activity. This concept is the same for MP0310 or AMG 506 that is now in clinical development. We are recruiting well, and we will present initial data on that molecule in the second half of this year.

With this, I will hand over now to Andreas to lead us through the financial results.

Thank you, Patrick. During the next few minutes, I walk you through the key financials for the first half of this year and some words on the projection. And more details can be found in the half year report, which is also available on our website. I'm on Slide 19. So in the first 6 months this year, we recognized total revenues of CHF 7.5 million compared to CHF 13.6 million in the same period last year. The 2020 revenues are all noncash effective, revenue recognitions of deferred revenues stemming from the Amgen partnership, which we signed end of '18 and collected early '19. Total expenses in H1 '20 amounted to CHF 30.6 million, which is CHF 4.6 million more than in first half of last year. And expenses in the first half included CHF 3.3 million noncash costs for share-based payments, pension accruals and some depreciation and amortization. This led to an operating loss of CHF 23.1 million compared to an operating loss of CHF 12.4 million in the first half of last year. We posted a net financial expense of CHF 1.6 million, which is mainly driven by unrealized currency losses on the U.S. dollar and euro cash positions. Bottom line, we incurred a net loss of CHF 24.7 million for the first half of this year compared to a net loss of CHF 12.7 million in H1 last year. We presented a net cash outflow from operations of 20.7 -- CHF 27.9 million, sorry, compared to a positive cash inflow of CHF 27 million last year in the first half. And this last year's positive cash inflow was driven by the CHF 50 million collected from Amgen, as mentioned before.

Most importantly, we continue to be solidly financed. End of June, we had a cash position of CHF 64.4 million at hand with no debt. Early July, as Patrick was mentioning, we extended this by another CHF 80.2 million with a capital increase. Plus, on top of that, also the collection of high to -- of a mid- to high single-digit reservation fee received from the Swiss Government. With all that, we are funded for at least 2 years into -- well into the second half of '22. This projected cash runway does not include any potential payments from current or new partnerships. End of June, we had 144 FTEs, which is around 16 FTEs more than a year ago.

On Slide 20, you see the P&L breakdown. It should be self-explanatory. So you see the split of the expenses into R&D and G&A. So in R&D, we invested CHF 25.1 million. For G&A, CHF 5.5 million, leading to an operating loss of CHF 23.1 million. Net of the financial loss of CHF 1.6 million, we incurred a net result of -- net loss of CHF 24.7 million.

A few words on revenues. So there, we have mentioned, we booked CHF 7.5 million. It's all noncash stemming from the collaboration with Amgen, and we still have CHF 20.8 million sitting on the balance sheet to be recognized on a percentage of completion basis in the coming quarters.

Slide 22, operating expenses. We -- our investment into R&D in the first half of the year went up from CHF 19 million to CHF 25.1 million, which is driven by additional spend for external R&D and personnel. On the G&A side, the cost went down from CHF 7 million to CHF 5.5 million, and G&A includes mainly, as always, the facility office costs, professional fees, consulting, personnel and depreciation. Overall, in H1, expenses included CHF 3.3 million noncash effective costs, mainly stemming from the share-based compensation.

Now 2 slides on the balance sheet, Slide 23, end of June and Slide 24, end of July, and other pro forma balance sheet. So end of June, as always, very simple balance sheet and debt-free. Cash balance, CHF 64.4 million. Some other assets, which includes working capital, tangible assets and some minor intangible assets. On the credit side, we have CHF 31 million equity and CHF 42.3 million other liabilities. The other liabilities looks high. But this includes CHF 20.8 million so-called contract liabilities. These are not true liabilities in the sense that we have to pay something back. These are deferred revenues related to our Amgen collaboration, which will be revenue recognized on a percentage of completion basis in the coming quarter. So they will disappear over time. The other liabilities also include 3 other elements, which is lease liability of close to CHF 2 million, and CHF 11.6 million accrued employee benefit after IAS 19, and CHF 8 million other current liabilities, such as trade payables.

Now move to 24 with the capital increase, we strengthened the balance sheet significantly. So cash balance is now at 100 -- or was end of July at CHF 134 million. This does not include yet the mid- to high single-digit amount collected from the Swiss Government. Total balance sheet up to CHF 142.6 million and equity also went up. Accordingly debt-free as before.

With that, I already come to the end. So the guidance for this year, we increased it by CHF 5 million to a range of CHF 65 million to CHF 75 million, and this increase is driven entirely by additional investments we want to do into the COVID projects, as Patrick was presenting before.

It includes also -- that includes CHF 6 million non-cash costs. On top of that, we plan to invest around CHF 3 million into IT and lab equipment in the course of the full year of 2020.

With that, I'm at the end of my part and hand back to Patrick, please.

Thanks, Andreas, for the in-depth and nice summary of our financial results. Let me wrap up the presentation part with a short look at our pipeline and highlighting a few expected catalysts of the next time in front of us. Slide 27 is taken from our homepage. And you also recognize, you can then click on those. So if you want to get more information on programs, I did not touch on, feel free to go there and inform yourself.

Patrick, can you hear us? We can't hear you anymore.

(technical difficulty)

Ladies and gentlemen, please hold the line. The conference will resume shortly. Thank you. Ladies and gentlemen, please hold the line. The connection with the speaker has been lost. The conference will continue shortly. Thank you. This is the operator, the line is back.

Yes. Sorry about that, everybody.

Patrick, are you there?

Yes. You can go ahead. Yes.

Okay. So we have to use this line, operator?

We are alive and talking. Go ahead.

Yes, you can go ahead.

I can continue. So there might have been a lack in the line, okay. Maybe -- should I repeat the summary slides?

Please, go ahead, yes.

Okay. So let me repeat the Slide 28, the summary slide. The first data point, we're definitely looking forward to is first-in-human of MP0420 with initial data still this year. We will report data of MP0274 and discuss its future strategy of the assets, very similar to MP0250, where we also will discuss how we move forward. We have MP0310, that is -- or AMG 506, where we are defining the monotherapy dose to design the combination treatment setting. We're excited to then move into combination trials next year. And last but not least, we are preparing the IND for the 317 to be then able to dose patients next year. Next to all the oncology virology work, we're excited to hear about from AbbVie, how they define the path forward for abicipar. Obviously, they are working closely with the FDA. And all of this is now a funding horizon going into 2022.

With this, I would close this part of the presentation, and I'm looking forward to receive questions. I do hope the lines hold up, and we can do Q&A as planned. Thanks for your attention. Looking forward to your questions.

(Operator Instructions) The first question comes from the line of Stacy Ku of Cowen & Company.

So first, for MP420, what are you thinking about in terms of the clinical program design that you anticipate will be needed for regulatory approval? And how should we be thinking about that timing to potential commercialization? I know we're thinking real far ahead. And then I have a follow-up on the immuno-oncology programs.

Yes. So thanks for the question on the 420. So our aim is to go first-in-human this year to be able to set a safe and then hopefully also active dose to then start the approval trials very fast. Now what we're doing is we're working today very closely with the consortia that we can follow also the master protocols and maybe even be included in one of those trials. And I think that's the beauty of this program at this point in time that people are trying to support each other to create master protocols that include the learnings from others.

Obviously, there is 2 settings that we can look into. One is therapeutic in hospital setting, possibly in an emergency room or in heavily sick patients and the other is more the prevention, early intervention setting. These are 2 different approaches. I think the antibodies are all following that route. And I would expect that the DARPins, and here, it's maybe good that we're not the first, first, but we can profit from all the learnings from the others and then be a fast follower with the benefit of high yield, low-cost production and having multiple binders in 1 molecule instead of mixtures. But the clinical protocol should be highly aligned with those of the antibody protocols.

Okay. That's helpful. And then for MP0310, wondering if you could share any descriptive information for the single-agent activity in the dose escalation study? And a clarifying question. Would we need activation of 4-1BB to best understand any potential off-target toxicity? Or will we get a good idea from this single-agent test?

That's a great question. So what we're looking mostly is really to prove the mode of action. So what we're trying to do is to show a localization in the tumor and local activation of immune cells. If that has a direct tumor effect -- anti-tumor effect or not, we will see. We are not expecting this to be the key advantage of the molecule. It's more like turning a cold tumor hot. It can directly lead to activity. But likely, it will be needed to be combined with a PD-1 or a T cell engager. So we have a quite deep biomarker program following this work. And we are measuring receptor occupancy and activation of immune cells, and that data will inform us when do we see activation, do we see dose-dependent activation. And then to your other part of the question, do we see side effects based on that. And I think what we need to do is show activation and then at that dose, look at the side effect profile.

So if you cannot show activation, we wouldn't expect a lot of side effects due to the mode of action. So we need to do both. Single-agent activity for this molecule is not a must as we're kind of activating immune cells but not directly targeting them to the tumor. That's why we are in a partnership with Amgen. They have a rich pipeline, including a PD-1 and a whole set of T cell engagers, which make very good natural partners for our molecule.

The next question is from Debjit Chattopadhyay of H.C. Wainwright.

This is Aaron on for Debjit. Thanks for the clarity on the MP0420 program. So it's an interesting experiment that you showed. And I was wondering, in the RBD mutational assay where you showed lower binding from MP0420, how many mutations were in RBD domain? I'm just trying to get an idea for the ability of MP0420 and 423 to escape the mutation.

Yes. That's a great question. And thanks for bringing it up. What we're doing here is we're adding soluble RBD. So we're kind of mutating the whole RBD if you want. So this is knocking out the RBD activity because the other point is a difficult one to make, as we don't know where the receptor would mutate. So we did the most extreme thing. We kind of deleted the RBD function. We're doing the same by just deleting that module, and we will also have those results shortly. And we believe we get full activity or almost full activity without RBD finding. And so what we did here is far from anything the virus could do, it will not mutate completely on the RBD. But we wanted to simulate the worst-case scenario where maybe 10 or even more mutations would happen over time. And so far, I don't think there is actually any reported. So it's very theoretical. What we call it, let's call it, the global life insurance, and that's why we're working on it. The experiment we show here is really adding soluble RBD. That means all antibodies to the RBD would also have no effect anymore and would be captured by the soluble RBD and not block the virus.

I hope that's helpful for your thinking. So this is really a worst-case scenario for the globe. And even then, that's why we are progressing for 23 forward.

Okay. Okay. Yes, that's helpful. Yes, definitely a worst-case scenario. So -- and then I wanted to ask about the dependency on the timing of administration for efficacy because I saw from the Regeneron publication that their molecule was severely impaired as they administered it even a couple of days after infection. So I was just wondering how that looked in the golden Hamster model?

Yes. So we have -- we actually are running more models now. I see this as more a class effect. And I would not expect from all the data we have, we trend very similar to antibodies. I don't see a DARPin and this mode of action to be very different. And I would agree that the earlier you could dose the DARPin the better. And in the later stage of the disease, when there is a lot of virus, you will need very high doses. You can do that with a DARPin, but you might also or likely will need to combine with other modes of action, maybe anti-inflammatory agents. So I think the sweet spot for the DARPin is early intervention. And I think that's where there may be a subcu injection and also an outpatient setting would help.

And I don't know all the data, but just from the mode of action, we would expect very similar activity to the other antibodies. The 1 difference on the technical side is that we don't have an Fc that might add a layer of safety on top as there might be Fc-mediated inflammation, especially when there's a lot of virus there, so in later-stage patients, but that has to be shown in the clinic.

Okay. Great. And I'm looking forward to the bioRxiv publication.

Yes, that should go out. And please have a look. There's much more data there. And then you also see a bit of the process, how we did this. And thanks for checking that out.

The next question comes from the line of Richard Vosser of JPMorgan.

Just a clarification question on that first-in-human or Phase I trial of 420. How many -- have you got any idea of how many patients you might need to dose. And clearly, I suppose they'll be in the hospital setting. So which countries would they be in? I mean, we're seeing very low rates of hospitalization under the current situation in the pandemic. So thoughts there and how long that might take to complete before moving into, I suppose, pivotal trials? Second question, just building on the Swiss Government contract and reserving some doses of the product. Are you in discussions with any other government? Has there been any other interest there to think about -- maybe thinking about the product commercially? And then thirdly, just thinking about partnering. You mentioned the master protocols and going into there maybe for pivotal trials. But are you thinking about partnering to -- as Regeneron has done with Roche to bring this to the potentially the widest audience? And has there been any interest there? And I'll stop there.

Thanks, Richard, 3 really good questions. I mean the first is one we have -- we are debating up and down, how to design our first-in-human trial and how to navigate this space of very, how do you say, unclear situation, how many patients you actually have in hospitals. What we need there is we need to go into the clinic fast and generate data faster. And this is also discussions we're having with the regulatory agencies, what they will allow as we will not have the full tox packages ready if we want to go as fast. So -- and that's the balance.

At the moment, I just can comment that we are very fruitful discussions. And we believe we will find a way to still this year, set the dose. And obviously, we can profit and I pointed that out before of other companies and other antibody or even antibody cocktail setting the dose as we don't believe we should be very, very different. So I mean, those ranges will be true for antibodies and DARPins is the same mode of action. So we're debating and even discussing if this could be in healthy volunteers versus patients as that could speed up a lot of the dose setting and safety part and then directly or indirectly go into assessing a Phase II/III registrational setting. We will definitely update once we know internally what the best route towards the end in mind will be.

To the Swiss Government. So the Swiss Government has been working with us quite a while, especially also with the Swiss Army Labs supporting our virology work. We were always in contact. So that's 1 reason we agreed to do the contract. They pay us the reservation fee. They haven't bought the drug, but they will kind of have a secured reservation. And then it bit links also to your last question on partnering. There is a chance that we will partner on a global basis, and we then also wanted to be sure that Switzerland gets its share for the work and support they gave us.

So to your question to -- yes, so Swiss Government and other countries have reached out to us. We believe it will be now premature to close too many of those. We believe with clinical data, when we go into pivotal trials, I think that's the much better moment to do that. That's what Regeneron did in the BARDA deal. And I think the Regeneron model with the collaboration also makes sense, maybe even more sense for us as we are not a global organization. So I think all of that is on our radar. We have 2 programs we're moving forward, so 420 and 423, which are actually supportive of each other, and this is a complex, fast-moving space. And I think the industry understands more and more that this virus is here to stay. And there is, I would say, robust industry interest on our programs, and we also hope with the publication going out that there will be a bit more even to come there. But don't hear me complain, it's really good support from industry left and right for these programs. I hope I could cover most of that. And -- of your questions. Did I miss one?

(inaudible)

The master protocol? Or which one was that?

No, it was whether you would -- the master protocol was just whether you needed to have a partner for pivotal clinical trials?

I hope I cover that. We will need a global partner. There's different models. I mean some are more stockpiling by government. Other is really global distribution by a large pharma. And we are looking into all.

The next question is from [Sebastian Shot] of [Campen].

Congratulation on progress. I have a couple. First, on Amgen 506. I was just wondering whether you could clarify what are the minimal active dose [will mean] biological data and which biomarkers you will look at them? And then second, on abicipar, could you maybe expand on how the dialogue has been with Fc since the CRL and what the possibilities are for still starting the DME study in H2 '20? And then finally, on 250 and 274 what type of collaborations or partnerships will you be pursuing? Will it be co-development or complete out-licensing of these assets?

Thanks. Let me start with, which one is the first? The Amgen. So on the -- what are we looking for? What we're trying to do is to show that the molecule A reaches the tumor you have to show that because we believe co-engagement of the receptors will lead to activation. So first, you need to take biopsies and look at in the biopsies, are you reaching the receptor? Are you occupying the receptor to what level? So receptor occupancy is an important guiding element of the trial. Receptor occupancy just showed you you're binding the SAP side, then you will also want to see how are you binding the T cells, the immune cells with 4-1BB. And next to that, you want to see are you activating the immune cells. So if you turn that around, what we're looking for is receptor occupancy and active T cells in the tumor. We hope to see or be able to correlate that with the dose. So what we're looking for is a dose where we see full receptor occupancy and activation, and that could then become the active dose going forward.

Now in the combination, if you then have active immune cell, T cells, you might actually go for a lower dose of your T cell engager. As you have more, you might be able to go lower on both sides. So the combination might be lowering the dose on both sides to increase the safety window and get the full effect. Having said that, this is going to really in the future, and we will work that with Amgen to how this goes forward.

I'll go to MP0250, 274 first and then go to AbbVie. 274 and 250, so both are targeting known targets, established targets at highly competitive fields. So I think we would be open for a direct out-licensing. For both, I don't see the data to be robust for a partner to go into a direct next clinical trial to license. So what we're trying to do, especially for 250, is find more collaboration partners who can first test combinations to then out-license. So for 250, there is an intermediate step of a combination trial. 274, we have reached the dose. We will report the dose, and then we will discuss, obviously, also with partners what this means and if there is interest or not, and we will update accordingly.

So last question, how was the discussion with AbbVie? You have to keep in mind that AbbVie just closed the merger or the acquisition of Allergan, and there is definitely 2 tendencies. So one, they have to first internalize and establish ophthalmology, and then they have to deal with the complete response letter. And they're doing that well, but they can also not rush that as the teams really have to kind of as now work with the agency to come up with the plan. Your question was Amgen, would they start the DME trial now yes, or no? I cannot comment on that. It will depend largely on what trial the FDA needs to see on the new material to get comfortable on the inflammation to take a different view on the risk reward, which is likely, it wasn't the reward rework problem. It was the risk problem. And I think the AbbVie needs to understand what data, what trial they need to do to kind of please the agency there. Once they know that, I think then they can decide how and if to go forward.

At this point in time, they're really just putting in the work to get ready for that decision. And that includes the dialogue with the agency. And that will also directly link to a DME trial, depending on how those trials look, maybe there is combination ideas of those that you can do 2 in 1. And my feeling is they might first want to do a safety trial really asking the safety question because the question is not about activity or efficacy it's really on safety and maybe easier to run a safety trial and then start the work on efficacy and DME. That's here, me speaking, AbbVie is in the work, they're doing their work, and they will come back when they have a more robust internal view today.

The next question is from Zoe Karamanoli of RBC Capital Market. (Operator Instructions) The next question is from Barbora Blaha of Crédit Suisse.

I have 1 remaining on the 420. Can you give us some indications as to pricing because there seen some discrepancy in the industry, for example, AstraZeneca, they don't intend to do profit while (inaudible). Can you give us some color on your view? And then I have a follow-up question on abicipar.

Yes. No, the question on pricing of 420 is a good one that I cannot answer as of today. It is unlikely that we will do the pricing alone. I can speak to the contract we have with Switzerland, where we kind of discuss the price. The price, again, depends on dose. And I think what we all realize it's not about the profit, but it's about a fair price.

And so what we will actually do in our discussions is find a very good balance there. I mean we as Molecular Partners, we can't offer anything for free. We don't -- we cannot cross finance this work. So we will need some profit from it. So don't forget that. On the other hand, I mean, we're trying to bring a solution for a global pandemic as of Molecular Partners is the DARPin is one of those solutions. I'm sure we will be rewarded, and we will also have 1 or 2 partners on a global setting. If you look how the U.S. works with the BARDA contract and others, I think it really depends where you are, what way we go. And for us, it's much more that we can bring this program forward fast, then optimizing the return on investment.

For us, it's really -- can we invest wisely and then profit later on in a meaningful way, but this is not top of our mind today. When we are in these discussions, we think it through, but we don't take a very active stance. It just has to be clear that we earn something, but also that it is a fair price, especially for Switzerland.

Okay. And then on abicipar, every day [read through] the European application based on the reason that the major objections raised cannot be resolved within the available time frame. Can you give us a bit more color on that? Also because there is already a better formulation than in the MAPLE trial. So why don't [say] enough time? And could this also be a requirement from the FDA?

Yes. I think this is really the way I read this. So this is kind of -- so for those who are maybe not in the matter, AbbVie retracted the open applications with EMA and also in Japan based on the CRL of the FDA. The way we read this is the following that AbbVie need anyway. It's a mandate now to work with the FDA. If they decide to go forward, they will have to do a safety trial and get data on the new material that you were talking about that convinces the FDA. Now the good thing is if they would do that, that goes into the label. And then they will also have a much better label, then they would have had with the Phase III that they run. So I think the idea here is that if they actually do that, but they will also want that label with the other agencies that they then would resubmit to the others with the new data. That's the way I read this. That's me speaking here. Obviously, AbbVie will have to comment. But for me, that was the logic that I saw that they -- if they anyway have to do all of this, and with the probability kind of being hided, also other agencies would have come up with the same question. It was a proactive step in the right direction to retract those filings.

Gentlemen, there are no more questions registered at this time.

Thank you.

Thanks, everybody, for joining. Appreciate it.

Thanks. Stay well. Looking forward to catching up soon. Bye.

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