Palvella Therapeutics Inc (PVLA) 2020 Q1 法說會逐字稿

Greetings, and welcome to the Pieris Pharmaceuticals First Quarter 2020 Earnings Call. (Operator Instructions). As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Mr. Tom Bures, Vice President of Finance for Pieris Pharmaceuticals. Thank you. You may begin.

Good morning, everyone, and thank you for joining us for our first quarter 2020 conference call and corporate update. On the call today, we have Steve Yoder, our President and CEO, who will provide a corporate overview and outlook on our pipeline; Hitto Kaufmann, our Chief Scientific Officer; Ingmar Bruns, our SVP and Head of Clinical Development; and Shane Olwill, our SVP and Head of Translational Science, who will be available for Q&A. You can access the press release released this morning on the Investor Relations page of our website at www.pieris.com.

Before we begin, I'd like to caution that comments made during this conference call may contain forward-looking statements involving risks and uncertainties regarding the operations and future results of operations of Pieris, including statements related to the timing and progress of our clinical trials and preclinical programs, our partnerships and our financial position, and actual results or events may differ materially from those expressed or implied by such forward-looking statements. Factors that might cause such differences are described in our filings with the SEC, including our annual, quarterly and current reports. The information being presented is only accurate as of today, and Pieris undertakes no obligation to update any statements to reflect future events or circumstances.

I will now turn the call over to Steve.

Well, thank you, Tom, and thank you to everyone for joining us today for our first quarter 2020 earnings call. Before I provide an update on our therapeutic pipeline, I would like to describe the effects of the COVID-19 pandemic on our business. Fortunately, despite the numerous challenges of this pandemic, execution towards achieving our core corporate objectives for our 2 lead programs, PRS-060 and PRS-343 essentially remains on track, and research work in our laboratories has continued with limited disruption. We, of course, feel the pressures around the threatened and actual supply chain disruptions alongside other disruptions, and we will continue to rely on a number of third parties crucial for helping to advance our pipeline, who have not surprisingly experienced themselves significant disruptions.

It's difficult at this juncture to predict what impact this will pose for the rest of the year, but managing COVID-19-related risk and adopting new ways of working currently are among our highest corporate priorities. Meanwhile, within the company, across both our U.S. and German sites, we've implemented a number of measures to protect the health and safety of our employees and our communities. These include requiring all nonlaboratory employees to work remotely and various measures to reduce research lab staff density at our R&D facility in Hallbergmoos, Germany. Given the fluidity of this situation, we reassess risk very frequently, make necessary adjustments, and we'll continue to update publicly as appropriate.

Moving beyond the COVID-19-related impacts, I'd now like to provide an update on our therapeutic pipeline. And as a brief background on Pieris, you know that we've developed a proprietary class of next-generation therapeutic proteins called Anticalins, and these Anticalin proteins, they're engineered human lipocalins, which are proteins that are naturally abundant in the body and serve to bind and transport various antibodies, various molecules. As Anticalin proteins are smaller and typically more stable and engineerable than other large molecules, such as antibodies, they can offer unique advantages to other treatment options such as inhaled delivery to treat respiratory disorders locally or the ability to create more complex bispecific formats to drive a desired biology as we are doing in immuno-oncology.

Turning first to our respiratory franchise. We have been preparing for the start of the Phase IIa study for PRS-060. This is the inhaled IL-4 receptor alpha antagonist for moderate to severe asthma that we are developing in collaboration with AstraZeneca. While the continuing impacts of COVID 19 have the potential to disrupt the time lines for this program, we believe we are currently on track to initiate the Phase IIa study by year-end. Because the study will be initiated, sponsored and run by AstraZeneca, we cannot give additional details at this time. But as a reminder, we presented positive interim results from the Phase Ib study of PRS-060 last year, demonstrating that PRS-060 was safe and well tolerated at all administered doses in subjects with controlled mild asthma and having elevated levels of fractional exhaled nitric oxide or FeNO, in addition to significantly reducing FeNO relative to placebo at all delivered doses. Upon completion of this forthcoming Phase IIa study, which will be sponsored and funded and delivered by our partner, AstraZeneca, we will have options to codevelop and subsequently co-commercialize PRS-060 in the United States.

Our alliance with AstraZeneca includes 4 programs beyond PRS-060. We are continuing to work on the 3 programs we already have initiated, and we expect that AstraZeneca will nominate the fourth program later this year. Although we are fortunate that to date, time lines for PRS-060 have not been affected by COVID-19, there is a chance that the advancement of our earlier-stage, fully proprietary respiratory programs might become affected.

Last quarter, we announced that we had plans to disclose data and the rationale for advancement into IND-enabling studies for one of our several proprietary respiratory programs later this year. Because that data set is being generated in part in third-party laboratories affected by COVID-19, there is the possibility we may not be able to disclose the details for that program at a medical meeting later this year as originally planned. We are nonetheless hopeful that we may be able to disclose more details by the end of the year, and we'll continue to update publicly as appropriate on this program.

Turning to our immuno-oncology assets. I would like to focus my time on our plans for continued clinical development of PRS-343, our lead IO asset, but also will provide a brief update on PRS-344. Both PRS-343 and 344 are bispecifics, which use a 4-1BB targeting Anticalin protein. 4-1BB agonism is believed to play a fundamental role in driving T cell proliferation, cytotoxicity and T cell memory, collectively leading to the durable antitumor activity. PRS-343, which is a 4-1BB/HER2 bispecific, was designed to drive 4-1BB agonism in the tumor microenvironment in HER2-positive solid tumors and has demonstrated the ability to avoid unwanted peripheral toxicity while achieving objective clinical responses as observed in both of our clinical studies, which was a monotherapy dose escalation study and a combination dose escalation study with atezolizumab provided under a drug supply agreement with Roche.

In the fourth quarter of last year, we presented positive interim data from the Phase I dose escalation monotherapy study of PRS-343. Based on the totality of the data we have collected, including additional data beyond what we reported last year, we have decided to initiate in the second half of this year a Phase II proof-of-concept study for PRS-343 in combination with the current standard of care in the second line of treatment for gastric cancer, which is ramucirumab and paclitaxel. Today, we'd like to share with you some of the additional data we have seen that has informed our thinking as well as the rationale for the clinical development path we're announcing today.

Turning to the data. At the active dose levels, for which we presented interim data last year, namely cohorts 9 through 11b with 9 being 2.5 mg/kg given Q3 weekly and cohort 11b being 8 mg/kilogram given Q2 weekly, we observed partial response in 3 patients and stable disease in 11 patients as best response out of 21 evaluable patients, which translates to an objective response rate, or ORR, of 14% and a disease control rate, or DCR, of 67%. All 3 objective responses in these cohorts were observed in cohort 11b, in which disease stabilization was also observed in 3 patients out of 7 evaluable patients, translating to an ORR of 43% and a DCR of 86% in this cohort.

We also observed additional clinical benefit, including complete response in the higher dose cohorts, which are still open for enrollment. While enrollment is progressing according to plan, we will use the time until the planned start of the Phase II trial to generate a larger data set in these cohorts. We also continue to enroll a B-cell depletion cohort to assess the impact of anti-CD20 pretreatment on plasma exposure levels of PRS-343. Additionally, as mentioned, we have been conducting a dose escalation study with atezolizumab. We plan to present detailed data from both the monotherapy study and this atezolizumab combination study at a medical meeting in the second half of this year. Now we're enthusiastic to advance PRS-343 for the second-line treatment of HER2-positive gastric cancer and our rationale for focusing on this path is multifactorial. Importantly, it prioritizes an efficient path to registration as evidenced by our decision to combine 343 with the current standard of care regimen. There also is a key mode of action component at play recognizing myriad data points in the scientific literature, suggesting the potential benefits of combining a 4-1BB agonist with a VEGF antagonist and a cytotoxic chemotherapy. More specifically, we believe in the potential synergy between 4-1BB-based T cell activation and tumor vasculature normalization and other IO favorable elements that ramucirumab can provide. And we see an advantage of both tumor debulking and the release of tumor antigens that could drive an enhanced immune response as a result of paclitaxel.

Second-line HER2-positive gastric cancer also represents an attractive commercial opportunity considering the addressable population, both in the U.S. and the rest of the world. Our planned single-arm Phase II study of PRS-343 in combination with ramucirumab and paclitaxel will include primary endpoints of ORR and DCR with a targeted enrollment of between 40 and 60 patients, which we believe will allow us to sufficiently interrogate the efficacy of PRS-343 in both a time and cost-effective manner. We are very confident that based on the mode of action synergies just mentioned, PRS-343 can achieve our desired clinical endpoints to justify further continued development. We plan to initiate this proof-of-concept study in the second half of this year, and we'll provide further details on matters, including the statistical plan, expected trial duration and more detailed commentary on endpoints as we get closer to the formal start of the study.

Turning beyond 343. As mentioned, I would also like to give an update on PRS-344, which is a PD-L1, 4-1BB bispecific, which is the lead program in our immuno-oncology collaboration with Servier and for which Pieris holds exclusive commercialization rights in the U.S.

We recently learned of a scale-up challenge encountered during the manufacture of drug product for PRS-344 that will affect our original time line for filing IND by the end of this quarter as we have been guiding. Pieris and Servier, both remain committed to this program and have jointly decided to invest in additional CMC activities, given its strategic importance. As a result, we now anticipate filing an IND application for PRS-344 next year. The scale-up of manufacturing processes for complex biologics modalities can sometimes pose a challenge, but we are confident that we can overcome this issue by implementing an improved, scalable process that will meet high-quality standards for robust manufacturing. Once we have more visibility on the anticipated timing of the IND filing, we will provide an update, which we expect will be later this year.

Beyond PRS-344, we are working to complete the non-GLP work for PRS-352, a preclinical stage program addressing undisclosed targets that we are also developing as part of our collaboration with Servier, and we expect to hand that over to Servier also later this year. In addition to Servier, we also have an immuno-oncology collaboration with Seattle Genetics, and we continue to make progress on the development of antibody Anticalin bispecifics as part of that alliance.

And lastly, moving beyond our therapeutic pipeline, I did want to provide a quick update on our Board of Directors, and Dr. Jean-Pierre Bizzari has transitioned from the Board to serve as an adviser on oncology development strategy for the company. Dr. Bizzari has been an invaluable resource for us over the last 5 years, and I'm pleased that we will continue to benefit from his many insights with well more than 30 years of oncology development experience.

This concludes my prepared remarks, and I would now like to hand the call back to Tom to guide you through our first quarter 2020 financial results.

Thank you, Steve, and good morning, again, everyone. Cash, cash equivalents and investments totaled $86.8 million for the quarter ended March 31, 2020, compared to a cash, cash equivalents and investments balance of $104.2 million for the year ended December 31, 2019. The decrease was due to operating cash expenses, annual bonus payments and both capital and onetime expenditures associated with our move to a new facility in Hallbergmoos. We believe we have a cash position sufficient to support us through our next inflection points, including the Phase II study of PRS-343. R&D expenses were $12.8 million for the quarter ended March 31, 2020, compared to $14.3 million for the quarter ended March 31, 2019. The decrease in R&D expenses reflected lower manufacturing spending on PRS-344. Partially offsetting this decrease was higher personnel expenses due to an overall increase in R&D headcount and an increase in allocated facility cost due to the new Hallbergmoos site, both associated with the advancement of our clinical and preclinical programs.

G&A expenses were $4.4 million for the quarter ended March 31, 2020, compared to $4.9 million for the quarter ended March 31, 2019. The decrease in G&A expenses reflects lower personnel costs and a reduction in audit and tax professional fees. Net loss was $2.8 million or a $0.07 loss per share for the quarter ended March 31, 2020, compared to a net loss of $10.3 million or a $0.20 loss per share for the quarter ended March 31, 2019.

With that, I will turn the call back over to Steve.

Thank you, Tom. I'm grateful for our team's perseverance and ability to focus and deliver in these trying times. These have been a few tough months for everyone, but I am confident we will come out stronger on the other end of this, having worked through important prioritization exercises and adapting to more efficient new ways of working. And I hope you, who are all listening today, are staying safe and healthy. I want to thank you for joining us on the call today. And now we would like to open the call to your questions. Thank you.

(Operator Instructions) Our first question comes from the line of Jonathan Miller with Evercore ISI.

I guess I have 2 for you here. Let's start with PRS-343 where -- congrats on the additional responses, by the way. But I noticed as you're moving into Phase II, you haven't said much about what the dose level is anticipated to be in Phase II and what those doses are in the higher dose cohorts where you saw that complete response. Can you give us a little more color on dosing as you move forward? Secondly, I would love to talk about your cash runway, which you said goes through that Pieris 343 Phase II. Do you have cash runway through the 060 Phase IIa, through that value-inflection point as well?

Thanks, John, for the questions. Let me start by answering your second question first. And then I'll turn it over to R&D colleagues to help answer the -- what goes to recommended Phase II dose and more color there after I answer that. So with respect to the cash position and the managing of the balance sheet runway, we have not guided on runway in the past, and we won't start to do that today. I can say that a great deal is thought -- a great deal of thought has gone into FP&A as we align on a go-forward plan for 343 resource allocation to other assets within our pipeline, and of course, being mindful of time lines for a Phase IIa readout for PRS-060 or I should say, an anticipated Phase IIa readout for PRS-060 time lines. While we might be forced to make additional prioritization decisions in the ensuing quarters to protect 343's advancement according to this plan and also to be mindful that we believe PRS-060 is one of the largest value-driving opportunities for the company, we see ample opportunity to realize value from the investments we're making, both within our existing partnerships as well as from potentially new partnerships. And so all of that has gone into our thinking about how to manage our spend.

To your first question around the additional dosing beyond Cohort 11b, I would actually turn it over to Ingmar to comment on how we are going to be using the interim period between now and the start of the Phase IIa to better inform the dosage regimen for the Phase IIa study, although we're not going to go into specific details, as we said, we will be providing those details closer to the formal start of that trial. So with that, I'm going to hand it over to Ingmar for a bit more color.

Yes. Thanks, Steve. And John, yes, as Steve already said, I mean, we're not going to disclose details about the ongoing trial beyond the data from the 21 invaluable patients reported today. As we have reported earlier or described earlier, there are additional higher dose levels, including on the biweekly schedule, higher doses as well as alternative schedules, like a weekly dose schedule and the B-cell depletion cohort that Steve already mentioned. I'm not going to comment on where -- complete remission and the additional objective response in general happened at this point, but we will guide on this at the next earnings call and as we get closer to the planned start of the Phase II trial.

Our next question comes from the line of [Chang Lu] with Jefferies.

This is [Chang] for Biren. I have two. One is on 343 and one on 344. So for 343, I'm wondering how many additional patients should we expect from now to the medical meeting where you're going to release the data, like both for the monotherapy trial and for the combo therapy? And the second question on 344 is on the manufacture challenging. Would you mind provide additional color on what specific challenge that was facing and what strategy you have to mitigate that?

Sure. Thanks, [Chang]. Thanks for the questions. I would say for the 343 question, we're not guiding on the specific patient numbers today as we are still enrolling in some of the higher cohorts for the monotherapy trial. And there is flexibility of the protocol as to how many we can put into these additional cohorts based on the protocol design. And I think that suffice to say, there are additional patients in -- across all the cohorts since the disclosure in the SITC data set and in the atezo combo data we first disclosed at our R&D Day. And I would say, stay tuned for the totality of the data out of respect for the investigators, particularly in the combination trial since we have not disclosed initially any date in the context of a medical meeting. We want to allow an appropriate coming-out party for that program by the clinical investigator or put that trial by the investigator at that time. So if that's not enough color, we can maybe come back to your question on 343 data sets or additional patients.

But for 344, I would actually ask Hitto Kaufmann to comment on that. Before I turn it over to Hitto, I would say that as a reminder, both Pieris and Servier, I think, highly value the relationship as well as the parties' complementary capabilities. And both parties are committed to the relationship now in a very focused manner on 2 programs. And we remain very committed to advance and see what is now a very focused pipeline of these 2 bispecifics, which still include as the most advanced asset, PRS-344. So with that, I'll turn it over to Hitto to provide a bit more color on what we're working through there.

Thank you, Stephen, and good morning, everyone. As you typically manufacture biologic drugs initially as a drug substance and then later on as the drug product and as you typically initially establish your manufacturing process in smaller scale before you go to what is typically called a technical scale and then the final GP scale, the problem that reoccurred occurred at really the last step of this. So at the drug product stage of the product: manufacturing. It is not unusual to see this. Unfortunately, we have now seen this right ahead of wanting to start our Phase I. It is a topic that has occurred or a challenge that has occurred in many other biologics projects in the global biopharma manufacturing world, and we are pretty confident that we can solve that, which most likely will require an adaptation of our scale-up process and remanufacture.

Our next question comes from the line of Madhu Kumar with Baird.

Sorry about that. So thinking about this Phase II trial in combination with a VEGF drug and paclitaxel, what do you think is kind of the benchmark response rate that is expected for ramucirumab and paclitaxel in second-line gastric cancer, specifically, in this HER2-positive population?

Madhu, that's a great question. One, you can imagine, our team has been vigorously analyzing as we consider not just the standard of care, but of course, emerging standard of care. And with that, I would like to hand over to Ingmar to provide a bit more color on our thinking there as we look at it today.

Yes, sure. Thanks, Steve. And Madhu, so yes, I mean, we plan to evaluate the totality of the clinical data from our single-arm second-line trial and to fully define the clinical benefit as well as next steps then in development for 344 -- 343, including registrational efforts with a primary focus on response rates and durability. That's as much as I can say at this point. As we get closer to the formal start of the study, we will provide you with additional color on the study design, including the secondary endpoints of the study's statistical plan. We are confident obviously, knowing the therapeutic landscape and the emerging therapeutic landscape and standard of care that we can achieve a differentiated competitive profile for 343 with respect to both the current and emerging standard of care, as I said, for several reasons.

The encouraging response rate and some of that has been reported today and durability, in particular, we've seen in our Phase I and then the mechanistic synergy between the 4-1BB agonism of 343 and ramucirumab and the cytotoxic debulking effect of the chemotherapy, and Steve has provided some more detail there on the script and then including also the immunogenic cell death of tumor cells that both could enhance immunogenicity of the tumor as well as T cell [driven] tumor effects.

I will say that it's important to note that the current standard of care was established from a post-hoc analysis of the Phase III RAINBOW study involving a very small subgroup of about only 20 patients with prior trastuzumab treatment. And in light of these limitations and the single-arm component of our planned study with PRS-343, we have designed a statistical plan that would include real-world data for ramucirumab and chemotherapy to have actually more accurate estimate of the efficacy that can be expected from that backbone so that we can more accurately gauge the efficacy of that regimen. And in addition, our statistical plan will also retain a robust level of powering above 80%, let's say, within the context of what we expect to see in the real-world data and thereby allowing the outcome of the study to meaningfully inform also, as I said, a future registration study.

Great. And to that end, have you also thought like what are your thoughts about running the kind of later line gastric -- HER2 gastric cancer trial as well with just 343 monotherapy?

Shane, do you want to just continue to go with an answer there?

Yes. I mean, we -- at the moment, we can really just, I think, disclose the next stage of our plans, and this includes the second line, which we find attractive, this doesn't preclude any additional activities that we will inform you about when we get there.

Okay. And last part on 343. You guys -- so this has been run through the regulators? Or is this kind of a conversation that's in progress right now?

That's currently in progress. So we will give you a more detailed update at the next earnings call as we get closer to this. And we'll use the time while the team is working hard, preparing this to generate additional data on the ongoing Phase I.

Our next question comes from the line of Chris Shibutani with Cowen.

Can you just remind us a little bit in regard to or related with the 343 question, what kind of benchmarks that we have in terms of durability in that patient setting with existing treatment regimens in second line? And also, can you comment a little bit about what your thinking is about what you're expecting to see when you talk about changing your dosing between 2 weeks, weekly, et cetera?

Great. Thanks, Chris. I think that's a 2-part question. I would suggest maybe Ingmar can briefly go over the first one, which is again, benchmarks on -- I suspect you're wanting to talk about PFS and OS of second line. And then the second question was with regard to the rationale for the dosing on Cohort 11b and why either adjusting the frequency or the absolute dose may be relevant to a recommended Phase II dose. And I would suggest that Shane maybe could get into the biology on 4-1BB because that's principally at play there. So why don't we start with Ingmar. Do you want to go over again more back to the RAINBOW intent to treat and maybe retrospective HER2 analysis and any other thing that you think is relevant before turning it over to Shane to talk about the 4-1BB biology driving our additional escalation strategy.

Yes, sure. So as you know, I mean, the, I think, regulatory benchmark, if you will, or registrational benchmark, is still and will remain the RAINBOW trial. And if you look at the ITT population there, then we see a 28% overall response rate and durability in terms of median PFS about 5 months. The post hoc analysis of the HER2-positive population, as mentioned before, shown a higher ORR, but it's a very small population. It's actually the reason why we think we will utilize real-world data to confirm that or have a more accurate estimate. The durability in terms of PFS has been the same for this population as the overall study population.

We're, of course, also mindful about emerging standard of care, and that's probably something you're referring to while we watch this. All I can say in this context so far is that in the direct setting of second line, we still wait to see more definitive data to actually come up with an estimate, but we will provide more color on this as we get closer to the start of the trial.

Thanks, Ingmar. And Shane, again, if you want to comment on any of the synergy that would give us a belief -- well, again, our high level of conviction to achieve meaningful endpoint. On top of standard of care, you can also take time to do that before going into the nuances of further escalation, if you want to.

Yes, sure. Maybe just to add to what Ingram said, what gives us a lot of conviction about the second line, assessing an opportunity is that we feel there's a real opportunity for synergy between the mechanism of PRS 343 through 4 1BB agonism and the complementary components of anti VEGF therapy and a chemo component there. And when we look for clinical correlatives where we can infer that this has worked in first line non small cell lung cancer, we see these types of agents play in very well with IO therapy, resulting in the approval there for the atezo combo as part of the IMpower150 trial. And likewise, we've seen it in other indications where more recently, in RCC, where again, you've seen a real benefit of combining a T cell modulator with an anti VEGF therapy and with a chemotherapy that can help in tumor debulking.

In terms of the second question, what are we looking to obtain out of the additional cohorts, the different schedules we're looking at, there's certainly information that will help on the go-forward plan for PRS-343. But fundamentally, this is the first program out of our 4-1BB franchise. And we want to get as much of an understanding of the -- what it takes to optimally activate T cells by 4-1BB in this program. And when we think about stimulation of 4-1BB, one question that certainly the community had was do you need to activate continuously? Or would you rather give some sort of a dosing holiday to a T cell so that it's not continuously stimulated? Looking at the behavior of our molecule across Q3, Q2, weekly dosing certainly facilitates that sort of information. And what we've also disclosed at SITC is as part of this trial, we've been able to mandate paired biopsies that's allowed us to already start looking at correlatives between T cell activation, bold increase in the tumor microenvironment post therapy, and we've also got plans to do additional PD correlate. So what we're looking for out of the trial is the totality of data that confirms our go-forward plan for PRS-343, but also informs the follow-on pipeline.

(Operator Instructions) Our next question comes from the line of Matt Phipps with William Blair.

First, I don't suppose you'd be able to disclose what tumor types the additional responders for the 343 trial came in.

We're not going to comment on the additional tumor types or data beyond that, that we feel is most appropriately coming out in the context of a conference by the clinical investigator, as you might expect, Matt. But thanks for the question.

Okay. Then on 060, I just want to -- have all activities on your end been completed and kind of transferred to AstraZeneca? I believe there was some lower dosage levels that were being looked at earlier this year.

Yes. So I would say we are in an active support role with who I think is a very committed partner, who has defined processes for program progression like the progression from Phase I to Phase IIa, which is where our program currently is. At this juncture and, of course, with all the standard COVID-19-related caveats, we believe all Phase IIa readiness activities are going according to plan, including our delivery to AstraZeneca of Phase Ib clinical trial data that's needed to inform an official go-forward decision in accordance with the governance. We're also playing an active support role in drug product manufacture, regulatory interactions and in clinical trial site activation. But with respect to your specific question, Matt, yes, we do believe we have generated all necessary data from the Phase Ib to inform that decision.

And then one last quick one. With the 344 manufacturing, I mean, do you think this is really just something specific to the, I don't know, protein or cell line of 344 or is the kind of additional manufacturing work something that could be beneficial to future products down the line?

Well, I would turn that back over to Hitto. I would just say that, again, based on the commitment of the parties, based on the expertise we have, both under Hitto's leadership, our team and our vendors and our advisers, we're confident we can. We can work through this in an expedient manner, COVID-19 permitting. I would just finally say that this building block, Anticalin, that's linked to the PD-L1 antibody, it is the same 4-1BB Anticalin that is attached to the HER2 engaging antibody for 343. So while no 2 bispecifics are the same even if having a building block in common, that also gives us some hope, but I think your question also went to maybe positive learnings and read-through through the forthcoming work or ongoing work here. So with that, maybe I'll turn it over to Hitto. If you can provide any more color, feel free to do so, Hitto?

Thank you, Steve. Yes. First of all, just as a reminder, it was something that happened or that -- where we observed scale-up differences at the drug product part of the manufacturing. So it is far away from, for example, the cell line part.

Let me frame it like this. In the end, these relatively sensitive systems of manufacturing drugs from mammalian cells are influenced by the drug, but also by every single step of the manufacturing process and even every single component of the actual manufacturing facility setup. So we currently view it as something that is specific to the combination of the 3. I would say there will be a positive learning effect, mainly for this particular drug. So probably we will start Phase I with having much more knowledge than you would typically have at that stage because of the issue that we run into. Will there be learnings beyond that, we will have to see. I don't think we can say that at the moment.

Our next question is a follow-up from the line of Jonathan Miller with Evercore ISI.

As a follow-up to just that last question on the 344 manufacturing challenges, what is the sort of -- you said you and Servier are both investing in CMC manufacturing and fixing the scale-up issues. What is the sort of activity required by both you and Servier to accomplish those goals? Is this mostly something that you are doing to provide them with material? Or is this something that's taking place in their facilities? I just want to get a sense of which partner is responsible for what sorts of activities?

Yes. Again, thanks, John. I would, again, probably hand it back to Hitto for more specifics. But I would just mention, it's a collaborative effort, both internally at both parties and with our vendors that are involved in -- mobile vendors involved in this overall process to get to released drug product. And right now, I've reviewed and I've discussed what I think is a very thoughtful plan that looks at multiple aspects. And confident that the team has come up with -- jointly with Servier, a thoughtful plan, one that is executable on realistic time lines. And so Hitto might be able to go in a little more detail technically if he feels comfortable, but I just wanted to mention that at the outset. So Hitto, I don't know if there's anything more you can say or maybe you've said everything already.

Thanks, Steve. Just maybe 2 comments just to confirm what Steve has said. The CMC part of this joint development project is very much aligned at every step between the 2 parties. And the vendor network that we use to manufacture the drug is, of course, the third component in this. And just to conclude, it is something that has happened in other drug manufacturing campaigns for other drugs before, and that gives us the confidence that with adaptations, we will be able to solve that.

Ladies and gentlemen, this concludes our question-and-answer session. I'll turn the floor back to Mr. Yoder for any final comments.

All right. Thank you, Melissa. I just want to conclude by thanking everyone, again, for their attention and for your continued support of the company. We look forward to keeping you updated on all of our process and progress during this time. And thank you for joining the call. Have a great day and stay well. Thank you very much.

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