OPKO Health Inc (OPK) 2025 Q4 法說會逐字稿

Hello and welcome to the OPKO Health Inc Fourth quarter 2025 financial results conference call. (Operator Instruction) Yvonne K. Briggs.

Thank you, operator. Good afternoon. This is Yvonne K. Briggs with Alliance Advisors IR.

Thank you all for joining today's call to discuss OPKO Health financial results for the fourth quarter of 2025. I'd like to remind you that any statements made during this call by management other than statements of historical fact will be considered forward-looking and as such are subject to risks and uncertainties that could materially affect the company's results.

Those forward-looking statements include without limitation, the various risks described in the company's SEC filings, including the annual report on Form-10k for the year ended December 31, 2025 that was just filed earlier today.

Furthermore, this conference call contains time sensitive information that is accurate only as of the date of this live broadcast on February 26, 2026. Except as required by law, OPKO undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call.

Regarding the format of today's call, Doctor Phil Frost, Chairman and Chief Executive Officer, will provide opening remarks. Doctor Elias A. Zerhouni, Vice Chairman and President, will then provide an overview of bio-reference health as well as OPKO's therapeutic segment. After that, Adam Logal, OPKO's CFO, will review the company's Fourth quarter financial results and discuss OPKO's financial outlook. Then we'll open the call to questions.

Now I'd like to turn the call over to Dr. Frost.

Good afternoon and thank you for joining us today.

OPKO exited 2025 with tremendous momentum as we executed on the priorities we laid out earlier in the year.

These included positioning our diagnostics business for a return to profitability, advan advancing our Modex pipeline, leveraging non-diluted funds from strategic partnerships to offset our R&D budget, and strengthening our balance sheet.

We're looking forward to the year ahead as we have multiple value-creating catalysts for 2026 and beyond.

And by reference, 2025 was transformative.

With the closing of a second asset sale in September, we completed the sale of our oncology division and related testing services. This allowed us to focus on bi reference on its core clinical laboratory business in the New York and New Jersey region, as well as correctional health and our 4K score tests nationally.

This divestiture streamline our infrastructure and reduced fixed costs while freeing capital to support our broader strategic objectives.

My reference is now positioned to meet our goal of sustained profitable growth in 2026. We believe that our more focused footprint combined with the accelerating adoption of 4K score, give us a clear path to modest revenue growth and improving margins this year.

On the therapeutic side, Modic continues to be a central component of our long-term strategy.

We now have multiple clinical stage programs, and EBV vaccine that's partnered with Merck, a proprietary multispecific immuno oncology and immunology candidates, including those intended for immune rejuvenation and for the immune impaired.

In 2025, we also began an important collaboration with Regeneron that aligns our deep antibody discovery capabilities with our unique multispecific platform to pursue targets in metabolism, oncology and immunology.

The value of this collaboration potentially exceeds $1 billion in milestones alone.

Regeneration, Regeneron is responsible for reimbursing ModeX for its work in creating antibody candidates, utilizing ModeX's proprietary platform and for funding all development and commercial efforts for candidates it selects for further development.

From a financial perspective, we entered 2026 with a strong cash position that was bolstered by asset sales, barter funding, partnership payments, and positive operating contributions from our international pharmaceutical business.

This has allowed us to invest meaningfully in our R&D portfolio while returning capital to shareholders through share repurchases. Last year we bought back over [100 and $9 million] in common shares and convertible notes.

We look forward to the year ahead as we advance the Modex pipeline with multiple clinical and partnership catalysts and continued focus on operating efficiencies as bioreference returns to profitability.

With that overview, I'll return the call over to Elias.

Well, thank you, Phil, and good afternoon, everyone.

I'll start with ModeX. ModeX is now firmly established as a clinical stage platform company spanning vaccines, oncology, and immunology. We have 3 programs in the clinic already and 2 more entering the clinic over the next few months. Our EBV vaccine is partnered with MERC, includes our 2 antigens in combination with MERC's adjuvants. And MERC involved over 200 subjects in the phase one trial that is evaluating safety, tolerability, and immunogenicity, enabling further development by MERC.

Our lead immunoecology candidate, MDX 2001, is a tetra-specific T cell engager directed at two tumor antigens, Cmet and TRP 2, and two T cell activators, CD3 and CD28. This candidate continues to progress to phase 1 dose escalation in solid tumors. To date we have dosed more than 25 patients across multiple tumor types, and have reached those levels that are approximately 10-fold higher than the starting dose with acceptable safety. We're now refining the final dose and regimen to be used in phase 1B expansion cohorts, focusing on specific tumor types.

MDX 2004 is a first in class multi-specific immune rejuvenator for advanced cancers. This trans-specific molecule simultaneously engages CD3, CD28, and 41BB to stimulate T cell activation, proliferation, and persistence with the goal of restoring the immune system.

By restoring and maintaining T cell activity, this immune rejuvenator may address a broad range of cancers by potentially reversing immune dysfunction associated with chemotherapy, chronic illness, infections, and aging.

MDX 2004 entered phase one late last year in Australia and subsequently in Israel.

With MDF 2003, we are now developing a tetraspecific antibody that binds CD19 and CD20 on cancerous B cells and CD3 and CD28 on T cells. This is in line with emerging data showing the benefit of targeting both CD19 and CD20 in difficult to treat B cell lymphomas and leukemias.

MDX 2003 is designed to maintain efficacy even if one B cell marker is lost or greatly reduced, which is a common way for tumors to escape.

CD19 only treatments and to build in CED28 co-stimulation so that T cells can stay active and able to kill cancer cells longer.

We presented a poster at the AS annual meeting in December, which described our pre-clinical findings. We have received regulatory IND approval in Australia and will begin first in human trials in a few weeks for cancer.

But I should note that this tetraspecific antibody also has potential to treat diseases associated with autoimmunity, an indication we're separately considering for entry into the clinic.

A highlight of the Fourth quarter, as Phil said, was the announcement of an agreement with Regeneron, which brings together their extensive library of clinically validated monoclonal antibody binders with our multi-specific engineering platform to pursue 4 initial programs across metabolism, oncology, and immunology with potential to expand beyond the initial targets. And during this collaboration, Regeneron will fully fund pre-clinical and clinical development and commercialization for selected assets, and OPO is eligible for research, development, regulatory, and commercial milestones that could exceed $1 billion as well as up to low to double-digit royalties on global sales. Our joint teams are actively working towards nominating lead candidates with the goal of achieving the first milestone of these programs.

As these programs move into formal developments.

Now, turning to infectious diseases in the immune impaired, our BARA supported program, programs for multi-specific COVID-19 and influenza antibodies continue to move forward. We, recently received IND clearance from the FDA for MDX-2301, our COVID multi-specific antibody, which is aimed at high-risk immunocompromised populations, and this program is to enter the clinic in the first half of 2026.

Our influenza program against both flu A and flu B is in the PINB stage. We're currently evaluating the lead clinical candidates and challenge models to prioritize them for further clinical testing with potential incremental funding from BARDA. In 2025, we received $28.5 million in non-diluted funding from BARDA for these two programs and a total of $54 million since inception. And VARA will assume the cost of the clinical trials. Over the past three years, we've also been building an in vivo CART platform that we believe represents the next generation of cellular immunotherapies. And like traditional CART approaches, our platform uses multi-specific antibodies to greatly expand potential applications by targeting our proprietary lipid nanoparticles to any desired cell type. And enabling the creation of multi-specific chimeric antigen receptors showing excellent B cell depletion and safety in non-human primate experiments.

We view this flexible, differentiated, and unencumbered technology as a unique asset within our portfolio, generating significant interest from potential partners as we enter the late stages of the pre-IMD process, hoping to enter the clinic either late this year or the beginning of 2027.

During the fourth quarter, we continue to advance OO 88,006, an analog of natural dual GLP-1 glucagon and cretinoxinomodulin towards the first in human phases, and we are in the late stages of the pre-IND work to study healthy and presumed metabolic dysfunction associated with steroid of hepatitis for short MASH participant. As both a weekly injectable injectable product and in partnership with Entera Bio, a once daily oral formulation which has been selected based on encouraging oral bioavailability in non-human primates.

In addition, under the collaboration with Entera, we recently announced a program to develop a first in class oral long-acting PTH tablet for patients with hypoparathyroidism. This program combines Opco's proprietary long-acting PTH variants with Anterra's proprietary N tab technology.

Opco and Antera will each hold a 50% ownership interest in this program and will each be responsible for half of the program's development costs.

Given the favorable PKPD data announced last December, we're accelerating the development timeline of this product and expect to file an I9D application with the FDA late this year.

Now, our international pharmaceutical operations continue to be a source of steady cash flow and operating income. In 2025, global pharmaceutical product sales grew by 17% versus the prior year quarter, and I'll let Adam go through the numbers in more detail, but our partnering strategy continues to provide meaningful cash flow, and we're pleased that our partner Lily has brought Madu tide to the Chinese market. And we received our first royalty payment in the 4th quarter.

Finally, turning to our diagnostic business in mid September, we completed the sale of Bioefference's oncology assets to LabCorp, transforming bioreference into a streamlined, regionally focused clinical laboratory with a national specialty testing franchise Anchored by 4K score.

We now operate with a more efficient footprint supported by correctional health nationally and in, and also an expanding menu of higher margin services. In 2025, the post-transaction remaining operations represented approximately $300 million in revenue.

Fourth quarter testing volume in the bioreference business, excluding the divested oncology assets grew slightly, and we continue to realize the benefits of our cost reduction initiatives, including a workforce reduction of roughly 29% from the previous year to approximately 1,400 FTEs and all other targeted operational efficiencies.

These efforts have significantly improved our margins and support our expectation that bioreference will deliver positive operating income and cash flow in 2026. Of note, our 4K score test remains a key growth driver. Fourth quarter volume increased more than 6% year over year, and we expect the updated label. Which does not require a digital rectal examination anymore to support continuing momentum and entry in the primary care market. In the 3rd quarter last year, FDA approved this labeling change to dissociate the elevated PSA from suspicious nodules for the use of the 4K score. The intended use population are men ages greater than 45. With age stratified elevated PSA or men without elevated PSA, but a suspicious nodule. Most of the PSA screening are performed by primary care physicians, and the age stratified elevated PSA or the precision of the 4K score test results would facilitate physician's decision to further assess the probability of clinically significant prostate cancer before a biopsy or MRI imaging decision.

We view okay Score as a valuable differentiated franchise that can generate meaningful revenue and profit as we extend payer coverage and educate both urologists and primary care provider on its clinical utility. So collectively our diagnostic transformation, our clinical progress, and across the company and high-quality partnerships have Positioned us as a more focused therapeutically driven company with multiple near and midterm inflection points. With that, I'll turn the call over to Adam to review our financial results and outlook. Adam.

Thank you, Elias. Capital allocation remains our top priority as we entered the quarter with $369 million in cash and cash equivalents and restricted restricted cash, which is more than sufficient to fund our ongoing operations and development plans while we also return capital to our shareholders.

Our strong cast position allowed us to repurchase $9.8 million shares during the fourth quarter of 2025, and for the full year we repurchased $34.6 million shares for approximately $47 million. We have approximately $113 million remaining under our buyback authorization and expect to accelerate our repurchases over the short-term.

We deployed over $109 million in convertible note and common stock for purchases during 2025 and almost $230 million since the start of 2024, demonstrating our commitment to strengthening our balance sheet and returning that capital to our shareholders.

Let's turn to the financial performance, starting with our diagnostics business. Q4 was our first full quarter since closing our second transaction with LabCorp, and we are encouraged by the progress the team has made. Revenue for Q4 2025 was $71.1 million including $7 million from our 40 score test, which grew in revenue by a little more than 16% compared to 2024's $6 million.

Revenue in Q4 2024 was $103.1 million with the year over year decline primarily due to revenue attributable to the LabCorp transaction that closed in September.

Revenue from our retained business declined principally due due to test mix changes as we shifted some of our unprofitable but higher priced esoteric testing to our strategic partners, which was partially offset by slight volume increases.

Total costs and expenses were $89.4 million down from $124.8 million last year, reflecting the September 2025 LabCorp transaction, as well as the continued efforts to rationalize our cost structure to align with our focused geographic footprint and testing offerings.

Including in operating expenses were $5.8 million of non-recurring expenses related to reducing our headcount, asset write-offs as we transition into our new operating footprint. Our diagnostic operating loss was $18.3 million compared to $21.7 million in Q4 2024, and depreciation and amortization came in at $4.1 million down from $6 million in 2024.

Revenue From our pharmaceutical segment was $77.4 million in Q4 2024.

Excuse me, 2025 compared to 80 million.5 million in the prior year.

Revenue from product sales increased to $43.7 million up from $37.4 million reflecting foreign exchange tailwinds in the 2025 quarter, as well as higher sales volumes in our international operations.

As we continue to focus on the profitability of Realty, the growth to net improvements that we have realized in 2025 have resulted in meaningful, positive cash flow from operations while maintaining our overall revenue levels. Realdi contributed $8.8 million during Q4 2025 compared to 2024's $9.1 million reflecting lower government rebates during the 2025 period, partially offset by an approximately 17% decline in volumes.

Our Pfizer gross profit share was $12.5 million reflecting a 30% increase to 2024 is $9.6 million. The fourth quarter of 2025 reflects the highest gross profit share recorded to date and reflects Pfizer's progress on the global commercialization of Injela.

During Q4 2025, we recorded $7.2 million of revenue from our new collaboration with Regeneron, while the 2024 period included $12.5 million of milestone payments from Merck for our EBV collaboration.

In addition, BARDA funding was $6.9 million compared to 2024's $11 million reflecting activity levels for infectious disease antibody programs that BARDA supports.

The 2024 period included higher level of CMC activities, while the 2025 period reflected activities in preparation for our upcoming phase 1 clinical trial for MDX 2301.

Finally, the fourth quarter of 2025 included $4.3 million paid by [Eli Lilly] for royalties on [Mazdaide] which is being commercialized by Innvent in China. This reflects royalties on sales from July to December 2025.

As a result, IP and other revenue was $33.7 million compared to 2024's $43.1 million.

Costs and expenses for our pharmaceutical business were $88 million up from $82.6 million reflecting our investments in our R&D programs. R&D for Q4 2025 totaled $32.4 million up from $29.8 million in the 2024 quarter due to our increasing Modex development activities.

As a result, our pharmaceutical operating loss was $10.7 million compared to last year's operating loss of $2.1 million. Depreciation and amortization was $18.3 million which was consistent with 2024's $18.1 million.

Our consolidated financial results total include total revenues for Q4 2025 of $148.5 million compared to $183.6 million in the fourth quarter of 2024. Our consolidated operating loss for Q4 2025 of $38.3 million compared to $33.1 million for the 2024 period.

The 2024 period benefited from the Merck milestone payment, which was approximately $5 million more than 2025's Regeneron milestone payment.

Our net loss for Q4 2025 was $31.3 million or $0.04 per share, compared to net income of $14 million or 1 penny per diluted share in Q4 2024, which included the benefit from gains of certain of our underlying investments.

Looking forward to our outlook for the first quarter of 2026, we expect total revenue to be between $125 and $140 million with revenue from services of $71 million to $75 million and this range reflects several of the weather impacts that have already occurred in January and February in the Northeast, which have already impacted our volumes by $3 million to $5 million.

We expect pharmaceutical product revenue of between $38.45 million dollars, and we expect IP and other revenue to be between $15 million to $20 million including Pfizer's gross profit share of $5 million to $6 million. The first quarter reflects the reset of the global revenue base. And in prior years has been negatively impacted by growth to net adjustments and inventory revaluations that Pfizer records.

Total costs and expenses are expected to come in between $170 million and $180 million excluding any one-time restructuring costs.

With our expanding investments in R&D to come in between $30 million to $32 million partially offset by $7 million to $9 million in collaboration funding and depreciation and amortization expense of approximately $24 million.

Moving to the outlook for the full year, we expect total revenue of $530 million to $560 million with revenue from services contributing $300 million to $312 million in pharmaceutical product revenue of $160 million to $170 million.

Other revenue from our partnering and collaboration agreements of $70 million to $80 million including Pfizer gross profit share of $34 million to $37 million.

Total costs and expenses are expected to be in the range of $725 million to $750 million.

Our full year investment in R&D is expected to be between $125 million and $135 million offset by $22 million to $26 million in BARDA funding and reimbursement for Regeneron under our collaboration agreements.

Finally, depreciation and amortization expense is expected to be approximately $100 million in 2026.

And as I mentioned earlier, we have approximately $113 million authorized to repurchase shares of our common stock. We expect to continue to accelerate our repurchase program over the next several days and weeks, continuing to focus on our investments and our R&D programs, with capital being allocated to our repurchase program.

That concludes our prepared remarks. Operator, let's open the call to questions.

(Operator Instruction) Maury Raycroft, Jefferries.

Hi, it's James on for Maury. Congrats on the progress in the quarter and thanks for taking our questions. I just start with MDX 2001. Can you discuss, the timing of a potential data disclosure and how you're setting expectation? For the proportion of patients from the 25 that you've dosed so far, how many of those could be valuable for efficacy? Also, can you confirm whether you still plan to advance the 6th dose level or whether you're seeing sufficient activity at the fifth dose level, to begin backfilling certain dose cohorts? And should we be thinking about this data disclosures first half or second half event?

Thanks. Right, so in terms of the dose, I think we are at the dose that we were perceived. We are adjusting the regimen. How many micrograms per week or every two weeks, we're adjusting that right now. Well, we will not go to a much higher dose level based on the information we have. We have, dose 25 patients. We do see signs of efficacy. It's too early obviously to report.

Formally, but we will, announce the results of our phase 1A trial in the upcoming conference and enter phase 1B for the tumors that show the most promising signs of efficacy, and that will probably be, you know.

Advancing so that we will have results that we can share by the end of 2026.

Thanks. And then just another quick one on in gamma profit shares increased to $12.5 million this quarter consistent with the upper trajectory and weekly prescription trends that we've been seeing. Can you provide more color on the key drivers of the profit share increase and what are the assumptions underpinning the guidance for profit share of $34 million to $37 million in 26? Thanks.

James, thanks. So we've seen good continued growth globally for, Pfizer. Really what drove the 4th quarter increase was, certain regions have moved up in the overall tiering structure. So, in one of the regions they actually hit the 3rd tier. So the overall gross profit percentage sharing has been moving up in those regions.

We've also seen Pfizer continue to take market share again on a global basis and increasing it in markets where they've historically been behind, so we're we're pretty pleased with where they've they've been able to head in the 4th quarter, came in ahead of where we had expected based on the growth rates that they've been able to deliver, so. We see, the 34 to 37 as being achievable at current growth rates and certainly could accelerate should they have some more wins on a global basis.

Thanks so much for taking my question. I back in.

(Operator Instruction) Brian Cheng, J.P.Morgan.

Maybe just first on the bio reference side of the business. Can you give a bit more color in the growth that you're seeing, especially in the 4K diagnostic test segment. Is the 6% growth that, you saw here, driven by, particularly momentum in the primary care setting? And how should we think about just the stability of this, growth trajectory, especially in the 4k diagnostic tests, and then have a follow-up.

Thank you.

So Brian, we have not made any meaningful effort yet into the primary care setting. We're still, while we have the FDA label change, we're still working with payers, to ensure coverage. So the volume increases have, all been coming from the work within the urology field. So we'll expect to continue to push that growth upwards and think it can accelerate as we make, progress with payers. The overall revenue growth came. From improved, revenue cycle management and selling into the right payer mix, so we've, continued to see overall benefits of the 4k and expect that to grow at a high single-digit, low double-digit pace into 2026, and that could accelerate as we make progress with within the primary care setting as payers come along.

Got it. And just on the Merck Partnership, for the [Epstein-Barr] virus vaccine, we noticed that there are additional studies being performed. What are those specific studies, that will move this program to move into the phase two phase, and any sense of the tim and when those studies will be completed?

I'll defer to Gary J. Nabel who was the leader of the collaboration with Merck, Gary, can you respond?

Yeah, I'd be happy to give you some more color on that. We, the studies that are ongoing at the moment are, designed to give us a little bit more information on the, EBD naive patients. The, initial phase one took all comers, and since the rates of serum positivity are so high in the US and throughout the world. And the vaccine ultimately is intended for patients who've never been exposed to, the virus. We'd like to see a little bit more data on that serone negative population because they'll be the subject of, phase two.

So, I, the other, activity that's ongoing is to see if we can reduce, The age of inclusion in the trial in the current phase one, it was age 18 and older while we're getting material ready for phase two and beyond.

We can now take this opportunity to reduce the age of entry down to 12 years of age, so it's really kind of positioning ourselves for more success and more the most relevant formulation to succeed in in the prevention studies when they begin.

You want to talk about the timing also.

Yeah, in terms of the timing, I expect by the end of the year, we would have, most of the data that we need to make the decisions, and, I think we're looking at a time frame for phase two that would start next year, not in this current year.

Got it. Well, thanks for the call.

Thank you.

(Operator Instruction) Yale Jen, Laidlaw & Company.

Good afternoon and thanks for taking the questions. I'm just going to follow-up on the EVD.

In terms of the first data readout with the study already completed, do you anticipate MER to provide that? And the second sort of follow-up on this question really, this part is really that, has Merck made a final, make a, so definitely go, no go decision and the current study is simply just to supplement or extend that. Versus the no go no go decision has not yet, officially made.

Then I have a follow-up.

Yeah, I'd say the short answer to your question is that it is a decision for Merck to make and to announce, so I don't want to get too far ahead of the curve. What I will say is that the data we've seen thus far is encouraging, and I think that, we at the moment really want to just make sure that. Everything is in place so that when we start the phase 2 goes seamlessly and beyond that we can go straight from phase 2, to phase 3 to the launch using the same, batches and the same preparations of the vaccine. So I, what I can tell you is that we're encouraged. But the final decisions really should be coming from Merck, and I don't want to get ahead of ourselves in that regard.

Understood. Appreciate that. Maybe just, another question here really is.

In terms of collaboration with Intera, we noticed that there's also a GLP-1 glycogen combos, and, assets.

You guys seem to have not yet talked much about it. Could you, reveal some information on that one and the current status of that one as well, and thanks.

So the GLP1 glucagon is what we call oxinhomodulnin in our report, and that's the name that is used for that. So it's pretty much at the very latest stages of IND submission.

I think in terms of the oral formulation with Antera, we're pursuing that given the results we had in December, which are very promising.

And in terms of the injectable, we're getting ready to enter phase one once we get the IMD cleared.

Okay, great. That's very helpful and congrats on all the progress in the MEC side.

(Operator Instruction) Edward Tenthoff, Piper Sandler Companies.

Great, thank you very much and really impressed with so much going on at the company these days and the improvements in the balance sheet too to pay for all of this research. I wanted to ask a little bit about the in vivo carti and it really is an interesting opportunity, for the Mode technology.

Can you elaborate a little bit more in terms of how you're delivering, the.

How you're delivering the contract so that you can express the, ours on, either T cells or other specific sales things.

Yeah, so what we've developed here is a really unique approach to in vivo carti characterized by a few factors. Number one, we've found a way to conjugate covalently the targeting antibodies that are on the surface of the lipid nanoparticle. So we're using lipid nanoparticles which can have a cargo of either mRNA or DNA. And our ability to target with multi-specifics allows us to be able to target T cells, B cells, and K cells. So it's a very versatile platform which is very interesting. We have advanced the program in terms of the CMC. And as well as the non-human primate experiments that are really necessary to achieve, I&D progression. So the characteristics of this in vivo CART really are quite fascinating because the possibilities are enormous because the CART receptor itself, the chimeric receptor itself, can be actually multi-specific as well. As currently they are all monospecifics. But we've been able to achieve both mono-specific CRTs as well as multi-specific CAT, developments.

So, we believe, and others do, we've had a lot of interest, incoming interest on this platform that this asset is really, something that is in my view, a large component of the value of Modex at this time.

Yeah, very interesting. I appreciate that color. And if I may ask just, one additional question also on Modex for 2004, the immune rejuvenator, I'm thinking about this almost as like an immunostimulatory, agent.

How do you envision developing it because it could have very broad utility like you.

you're referring MDX2004?

Is that what you're talking about?

I couldn't hear you.

Yeah,

So, MDX2004 is, I mean, Pretty much a rejuvenator of the immune system. As many patients have exhausted immune systems when they fight cancer and they receive multiple treatments, chemotherapy and other immune oncology drugs, and what we found is that the need, the need is to really reinforce the immune system in these situations. As PD1 is a checkpoint inhibitor.

So what it does, it removes the brake on the on the immune cells, the T cells in particular, but that doesn't guarantee that the T cell is going to be effective because you remove the brake, but the car may not advance, right? What MDX 2004 does, it is an accelerator. It really provides Energy, gas if you will, to rejuvenate the T cells and the stem cells and the memory cells so that the immune system can rev up and continue its fight against cancer cells. In terms of development, we're going into both patients who've been or cancer patients who have been treated in multiple lines and testing whether or not a rejuvenation of the immune system will.

Really reignite the positive anti-cancer effectiveness of the immune system, right? In addition, we're doing it in patients who are PD1 naive and patients who've had PD1s in the past, but where the effects of the PD1 has, basically faded. So that's the first step. So we have a two-arm trials with PDA1 naives and PD1 previously exposed. And then we're really testing whether or not it's a tolerable molecule that can be administered without too much safety issues and and observe whether or not it can prolong or rejuvenate the response, the immune system response. So far we have those 8 patients and things are going well.

Sounds great. That's really helpful. Appreciate all the color.

Thank you.

(Operator Instruction) Yi Chen, H.C. Wainwright & Co., LLC

This is Eduardo.

On for you. I was just hoping if I could get you guys to repeat the specific clinical milestones for 2001, 2004, in 2026, just to have some clarity there.

Well, so 2001 is pretty straightforward. It's completion of the dose regimen and entry into phase one B, all right? That's really what it is. And then in for 2004, we're doing the escalation, the phase one escalation, we passed the first step and we're going into the second, and there are multiple steps that are planned, which is a phase oneA, which we hope to complete by within this year. And determine what the optimal dose is for this therapy.

I'll point out the fact that this therapy may be Effectively more indications than just tumors simply because you have many patients who are immunosuppressed for reasons other than harboring a cancer.

So phase 1B for 2001 and the phase 1A for 2004.

Got it. That's really helpful. And then shifting over to the bio reference, margin expansion and the expense bridge, I think the guidance said 725 to 750 in total expense, which seems a little high following the divestiture. Just wanted if you could add some more color there in terms of the OpEx for the new bio reference divestiture.

Adam can cover that. Adam, can you cover?

Yeah, sure, so we would expect Eward of the overall expense base to continue to decline of file reference, as we've continued to work the. The overall operating efficiency upwards and starting to work the margin profile up, really where the expense expansion's coming from is within the R&D efforts, and it's going to be dependent on some of the successes that we're, we've been talking about in in other programs and what the timing of where they start, that's where the expense expansion is. Everything else from the operating company side, we should see stable or reductions.

Got it. Thanks so much for the.

Clarity and congrats on the year.

(Operator Instruction).

Thank you all for participating and for your good questions. We look forward to meeting with you again after the 1st quarter to discuss those results.

Thank you again and have a good evening.

(Operator Instruction).