TRACON Pharmaceuticals Inc (TCON) 2021 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to TRACON Pharmaceuticals Fourth Quarter and Year Ended 2021 Earnings Conference Call. (Operator Instructions)

During today's call, we will be making certain forward-looking statements, including statements regarding expected timing of clinical trials and results, regulatory activities, future expenses and cash runway and our development plans and strategy. These statements are subject to various risks that are described in our filings made with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 2020, and subsequent quarterly reports on Form 10-Q. You are cautioned to not place undue reliance on these forward-looking statements, and we disclaim any obligation to update such statements.

Now I wish to turn the call over to Dr. Charles Theuer, President and CEO of TRACON Pharmaceuticals. Dr. Theuer?

Thank you for joining TRACON's fourth quarter and full year 2021 financial results and business update call. I will begin with an update on our pipeline and then review our recent activities. Following that, Scott Brown, our Chief Financial Officer, will review our financial results for the 3 months and year ended December 31, 2021. Finally, we will conclude by taking your questions.

In regards to the progress in the pivotal ENVASARC trial, I wanted to comment on the TRACON clinical and regulatory strategy as it relates to the February FDA Advisory Committee recommendation not to approve the application from EIi Lilly and Innovent's PD-1 antibody to treat non-small cell lung cancer until additional clinical trials demonstrate applicability to the U.S. population.

Specifically, the FDA decision emphasizes development of checkpoint inhibitor should be prioritized for patients with unmet medical needs. That is for cancer indications without approved checkpoint inhibitors or other suitable treatment options and must demonstrate safety and efficacy in patients representative of the U.S. population.

This is precisely what TRACON is doing with the products we in-licensed from Chinese companies, including our most advanced product, the subcutaneous checkpoint inhibitor, envafolimab, being studied in the pivotal ENVASARC trial. While envafolimab is approved in China, making it the first subcutaneously administered checkpoint inhibitor approved anywhere in the world, we are not relying on Chinese data for our U.S. registration strategy.

Rather, we expect approval in the U.S. based on data from ENVASARC, where we expect to prove safety and efficacy of envafolimab in sarcoma patients representative of the U.S. population, by virtue of the fact that ENVASARC patients enrolled exclusively at more than 29 sites in the U.S. and 1 site in the United Kingdom. This plan is consistent with our development model to harness global innovation for the benefit of U.S. patients without suitable treatment options.

Returning to the topic of our continued progress with the ENVASARC pivotal trial. In December 2021, the Data Monitoring Committee, or DMC, reviewed data from 36 patients who were equally enrolled into each of 2 cohorts. As a reminder, the ENVASARC trial includes 1 cohort who received single-agent envafolimab and a second cohort who received envafolimab in combination with Yervoy. The primary endpoint in each cohort is objective response rate by RECIST as confirmed by blinded independent central review, with duration of response being a key secondary endpoint.

In each cohort, the demonstration of 9 out of 80 objective responses by central review or an 11.25% objective response rate defines the level of response that satisfies the primary objective of the study, which is to statistically exceed the 4% objective response rate of Votrient, the only approved treatment for refractory UPS and MFS.

As the December review, the objective response rate by central review in each cohort satisfied the prespecified futility rule. The DMC noted that envafolimab was well tolerated with only a single Grade 3 related adverse event reported in 36 patients and observed that envafolimab demonstrated a significantly higher objective response rate in lower-weight patients.

To provide additional perspective, the envafolimab dose that produced a 45% objective response rate in the pivotal trial in MSI-high cancer patients that resulted approval in China was 50% higher than the original ENVASARC dose of 300 milligrams. And the envafolimab dose that resulted in objective responses in 2 of 5 patients with alveolar soft part sarcoma in a Phase I trial was double the original ENVASARC dose.

Therefore, given the high tolerability and increased activity in lower-weight patients, the DMC recommended doubling the envafolimab dose and continuing the ENVASARC pivotal trial. We should also note that the new ENVASARC dose is still fourfold lower than doses shown to be safe in Phase I testing.

We agreed with the DMC that the increased dose of envafolimab should optimize benefit to all patients irrespective of weight and expect a superior response rate and safety profile compared to Votrient, a drug with a 4% response rate and a black box warning for fatal hepatotoxicity. Based on data from trials of other checkpoint inhibitors in refractory UPS and MFS, we are targeting a 15% response rate for single-agent envafolimab and up to a 30% response rate for envafolimab given with Yervoy, which should more than satisfy the primary objective of the trial of demonstrating a minimum 11.25% response rate in either cohort.

The FDA has reviewed and approved the amended ENVASARC protocol with the dose increase to 600 milligrams recommended by the DMC. As we announced recently, this dose is now being given to patients. We are continuing the same trial design, with the only change being doubling the envafolimab dose and assessing up to 80 new patients in a cohort of single-agent envafolimab at 600 milligrams and up to 80 new patients in a cohort of envafolimab at 600 milligrams with Yervoy.

The primary endpoint will be evaluated in the new cohorts receiving the higher envafolimab dose. However, patients enrolled prior to the amendment will continue on trial and are eligible to escalate their dose, which will be supportive data using the anticipated BLA filing. We expect to complete and report 2 safety assessments and an interim efficacy assessment of 36 patients at the 600-milligram dose in the second half of this year.

The amended trial is forecasted to increase the cost of the trial by $5 million to the total cost of approximately $25 million. We continue to plan on approaching the FDA to discuss a BLA filing strategy as soon as we determine 9 responses in either cohort.

With respect to envafolimab's revenue potential, it is important to understand that sales potential in sarcoma with envafolimab at parity pricing is not just the forecast of $200 million in revenues from the initial indications in second-line UPS and MFS.

Our clinical development strategy is designed to create the opportunity for envafolimab to be broadly used in sarcoma in the frontline, adjuvant and new adjuvant settings by seeking supplemental indications. And TRACON's total sarcoma-driven sales revenue should be further enhanced by marketing envafolimab as part of the treatment combination in sarcoma with YH001.

Recall that YH001 is a potential best-in-class CTLA-4 antibody that we licensed from Eucure Biopharma in October last year. As a reminder, we received a broad license for YH001 to develop and commercialize in North America in sarcoma and in multiple other indications, including microsatellite stable colorectal cancer, renal cell carcinoma and KRAS-positive lung cancer.

Note with respect to our license, we can substitute any one of those indications for bladder cancer, endometrial cancer or melanoma at our election. In these nonsarcoma indications, YH001 could be combined with existing standard of care agents, including marketed PD-1 antibodies.

Our initial development plan for YH001 is to initiate a clinical trial in sarcoma in combination with envafolimab later this year. That trial is expected to also study a triplet that includes doxorubicin chemotherapy, which is the frontline standard of care treatment for sarcoma. While development in sarcoma is straightforward due to the lack of any approved immunotherapies, we also see a path forward for YH001 in other indications, where there's is clear evidence of activity with dual checkpoint inhibition.

For example, the combination of Opdivo and Yervoy is approved for the first-line treatment of intermediate and high-risk patients with renal cell carcinoma. However, our discussions with key opinion leaders indicate that most patients receive frontline treatment with a PD-1 antibody and VEGF inhibitor rather than with Yervoy. Therefore, we believe the unmet medical need in advanced renal cell carcinoma patients is in the PD-1 refractory setting.

Data presented at ASCO indicate that PD-1 refractory patients can be resensitized to immunotherapy, and we expect to test why YH001 in this line of treatment. This strategy of second-line dual checkpoint inhibition may be relevant for many tumor types where PD-1-directed treatment is given in combination with chemotherapy or VEGF inhibitor, but without Yervoy in the frontline setting.

Moving beyond our 2 checkpoint inhibitors. We are pleased that the National Cancer Institute continues to advance our DNA damage repair inhibitor TRC102. In February, the NCI initiated the first randomized Phase II trial of TRC102, which is assessing TRC102 in Stage 3 nonsquamous non-small cell lung cancer in combination with chemo radiation. The 2-arm trial will enroll 78 patients to assess the benefit of adding TRC102 to current standard of care treatment of pemetrexed cisplatin and radiation therapy, followed by consolidative durvalumab treatment.

The primary endpoint of the trial is PFS, and the trial is designed to detect an improvement in PFS at 1 year from 56% to 75%. The enrollment is expected to begin in June of this year and results are expected in 2024.

Our fourth clinical-stage asset is the CD73 antibody, TJ4309, that TRACON is evaluating in a Phase I study as a single agent and in combination with the checkpoint inhibitor, Tecentriq. We are working to complete the trial, which has seen the last visit for the last enrolled patient. As a reminder, I-Mab has indicated their desire to terminate the TJ4309 license following completion of the Phase I trial for a payment to TRACON of $9 million, which is expected later this year.

This brings me to a legal update on the 2 disputes with our corporate partner, I-Mab. In February, arguments relative to both of our agreements with I-Mab were heard before an International Chamber of Commerce arbitration tribunal under New York law.

As we have noted in the past, in March 2020, I-Mab issued a press release announcing a strategic partnership with KG Bio, whereby KG Bio received with a press release described as a right-of-first negotiation for exclusive rights to commercialize TJ4309 in multiple Asian, African and Middle Eastern countries for up to $340 million in potential payments to I-Mab.

We believe that based on the KG Bio license, TRACON is entitled to receive a payment at that time under the TJ4309 agreement, although I-Mab has disputed that this payment is due. Another dispute with I-Mab regards our bispecific antibody agreement with them. The dispute in this agreement includes issues related to I-Mab's 2 license and collaboration agreements with ABL Bio in July 2018 that preceded our agreement with I-Mab in November 2018.

On April 8, 2020, we issued a notice of dispute regarding possible breaches of the TJ4309 and bispecific antibody agreements. As of today, the TJ4309 and the bispecific antibody agreement disputes are now under post-hearing consideration by the arbitration tribunal, and we expect their decision later this year.

These arbitration claims are substantial and complex, and the outcome is uncertain. Pending results of arbitration, TRACON continued to meet our obligations under the terms of both agreements. We will promptly provide an update when the tribunal panel announce their findings.

From a business development perspective, we intend to continue to leverage our CRO independent product development platform and U.S. commercialization expertise to add first or best-in-class drug candidates and pursue additional external clinical-stage assets that would complement our expanding pipeline. Second-generation immuno-oncology targets continue to be of particular interest to us.

With the Eucure license, which closed at the end of 2021, we have executed 5 deals, leveraging our product development platform that is designed to enable rapid and high-quality development of our corporate partner's novel drug candidates. We believe our product development platform has earned additional credibility as a compelling solution for companies who wish to access the U.S. pharmaceutical market, with TRACON taking on the clinical development cost and risk and our partners able to retain a meaningful share of their product's commercial profitability.

In addition to our profit share deal structure, we are exploring revenue-sharing deal structures, whereby we conduct trials at cost plus and, in turn, TRACON's share in royalty and sublicensing revenues. We have also begun to explore a model whereby we share our proprietary clinical operations capabilities to enable other companies to internalize such operations and avoid contracting with CROs to execute clinical trials. This could convert substantial cost and time savings for these companies.

At this time, Scott will provide an update on our financials.

Thank you, Charles, and good afternoon, everyone. TRACON's research and development expenses were $3.1 million for the fourth quarter and $11.1 million for the year ended December 31, 2021, compared to $2.2 million and $8.2 million for the comparable periods of 2020. The increase was related to enrollment in the pivotal ENVASARC trial in 2021.

General and administrative expenses were $4.6 million in the fourth quarter and $17.5 million for the year ended December 31, 2021, compared to $2 million and $8 million for the comparable periods of 2020. The increase was primarily related to legal expenses in connection with the arbitration with I-Mab.

Our net loss was $7.7 million for the fourth quarter and $28.7 million for the year ended December 31, 2021, compared to $4.3 million and $16.8 million for the comparable periods of 2020.

Turning to the balance sheet. At December 31, 2021, our cash, cash equivalents and investments totaled $24.1 million compared to $36.1 million at December 31, 2020. We expect our current capital resources to be sufficient to fund our planned operations into 2023.

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

Thank you, Scott. As you have heard, our business strategy is proceeding as planned. Allow me to recap with 5 key events to keep an eye out for this year. First, we expect to report an interim efficacy assessment at the 600-milligram dose of envafolimab in ENVASARC in the second half of this year.

Second, we're on track to initiate a Phase I/II trial of our potential best-in-class CTLA-4 antibody YH001 in combination with envafolimab to set the stage for first-line development of the combination of our 2 checkpoint inhibitors in sarcoma.

Third, we expect to further leverage our unique product development platform to build our product portfolio or to benefit other companies tired of being beholden to CROs. Fourth, we expect to complete the TJ4309 Phase I trial this year, providing I-Mab the opportunity to terminate the agreement for $9 million. And fifth, we will report the arbitration panel's binding decisions with respect to the outcome of the significant legal disputes with I-Mab.

As Scott indicated, our current cash runway extends into 2023. Thank you for your time and attention, and we are now available to answer your questions.

(Operator Instructions) The first question comes from line of Maury Raycroft from Jefferies.

Congrats on the progress. Charles, for the arbitration outcome, can you put any more clarity or an estimate on when that could happen? I guess, will that be before the trial completes or after the trial completes?

So with respect to the trial, Maury, you're referring to the Phase I TJ4309 trial?

The -- sorry, the arbitration outcome.

Yes. On the arbitration outcome, Maury, I tried to provide as much information as I could. It's a confidential proceeding. We appreciate the opportunity to present our point of view to the arbitration panel, and the hearing in-person or virtual in-person has been completed. In terms of the decision by the arbitration panel, as I mentioned, we expect that later this year. But in terms of an exact time table, I cannot provide that at this time.

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

That's a great question, Maury. So the trial continues to enroll vigorously. We've enrolled more than 70 patients in the trial. In terms of your question around -- and just to be clear, the new patients that enroll starting in day 1 of 600 milligrams is 80 in the new cohort of single agent enva, 680 in the new cohort of enva plus Yervoy. So those are 80 new patients that start dosing from day 1 at 600, and that's the population in which the primary endpoint is decided with respect to the trial.

Now with respect to the patients that already have enrolled, as I mentioned, they can dose escalate to 600. And I think that will be very interesting data, especially if a patient, say, is a 300 dose escalates to 600, and that may potentially be sufficient for response in a patient, say, that had stable disease earlier. So that is an important data set.

In terms of when or what time we would disclose those data versus consider a kind of package to disclose to the FDA, I can't give you details there yet. But I do think your question points out, that is an interesting separate data set. I also think it's really an interesting data set because the FDA has made clear, when you submit an application of approval, they want clear evidence that you've picked the right dose.

And now that we've gone up to 600, I think we'll have a lot of dose exposure data, both at 300 and 600, which then would be very useful as part of the BLA application to justify 600 milligrams as the proper and, if you will, potentially approvable dose. So it's great data to have the data in the existing 70 patients on trial.

But in terms of how we -- and when we disclose that, I can't tell you that, but I do think it's all part of the same package that we expect to supply to the FDA as part of the BLA because it helps justify what we expect to be the approvable dose of 600 milligrams.

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

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

And our next question will come from the line of Ed White from H.C. Wainwright.

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

No, I appreciate the questions, Ed, yes. And to be clear, so we've enrolled 70 patients prior to implementation of the amendments. And there are additional patients now have enrolled under the amendment and have been dosed at 600 milligrams starting from day 1 as I speak.

To answer your question and to be really clear, I appreciate the question. So with respect to the 36 patients where we expect interim efficacy data by end of this year, it will be much like last year. There will be 18 patients in each cohort, in which each patient has gone at least 3 months, which allows at least 2 on-study scans to get a good idea of the initial response rate in each cohort.

And so we will report in the same way we reported last year. This year, there will be 36 patients, 18 in each cohort, each patient going at least 3 months with 2 scans, and report that data expected by the end of the year. But to be clear, those will all be patients that started dosing at 600 milligrams from day 1.

Okay. And just on the cash runway, are you including the $9 million payment from I-Mab?

We are not in terms of our projections.

Okay. And just to be clear, the arbitration doesn't concern that $9 million. It's on other issues, right? So the $9 million isn't subject to the arbitration, or it is?

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

And our next question comes from the line of [Joe Beaty] from Baird.

First one is on TRC102. Could you discuss the potential for the trial being served by NCI to either lead into additional trials or potentially support approval?

[Joe], I appreciate the question, and welcome to the team in the sense that we really appreciate you picking up TRACON as a new analyst. And thanks for asking a question on TRC102. So I think it is a major advance for the program at the NCI. We've been partnering with for almost 10 years on this program, who has funded now 5 separate trials, and 102, has taken a step to actually fund and enroll a randomized study. And it is a very unique study in the sense that standard chemoradiation with or without TRC102 and then each arm gets standard durvalumab consolidative therapy.

The sample size is slightly less than 100 patients. So I think in terms of the endpoint, if we achieve endpoint, I think it would be very likely we would need a confirmatory randomized Phase III trial. Although if the samples -- if the effect size or hazard ratio was quite dramatic, I think there's a potential to think about moving that forward based on the data that will come out just of that trial. But I do think that's less likely, Joe . I do think we'd have to confirm that with a Phase III trial.

I would say the safety database for TRC102 would exceed what is generally required by the FDA for approval because it has been dosed now in a total of 6 completed trials, and this would be the seventh. And so there's well over 200 patients that would have received the study drug. So -- but that, I think, is my general feeling. But we really are excited to see a randomized study rollout for this drug. It's what the drugs really needed, a clear proof-of-concept trial, and we're looking forward to the results, which I mentioned we expect in 2024.

Got it. Appreciate that. And then another question. Can you discuss the ability of TRACON to scale up clinical trial development of other drugs at the time when -- like -- around now when ENVASARC pivotal study enrollment is kind of well under right way?

No, I appreciate the question, [Joe]. We definitely have capacity for more studies. I mean we're right now doing one -- the pivotal ENVASARC study. We're completing a Phase I study. And we mentioned we expect to complete that this year. And then we have scheduled to start the YH001 study with envafolimab. So by end of this year, we'll have really 2 studies ongoing.

If you were to look at TRACON, say, in 2018, '19, when we were advancing a separate asset forward, we were running about 7 trials concurrently. And if anything, our processes have only improved since that time. So we definitely have capacity for additional assets. We are quite selective in what we look for, but we also feel that with the backbone of now a PD-L1 and CTLA-4, that's attracting another potential immuno-oncology asset that could potentially pair with either or both of those assets could be really attractive.

So we're hunting aggressively for potential new assets. And depending on the nature of the asset, we could potentially engage in a profit share deal structure if we are able to license commercial rights. I mentioned we've also discussed deal structures where we might do cost plus where we get a revenue share for eventual commercialization.

And then the third thing we've discussed is I think a lot of companies really look at what we're doing and say, I wish we could do that, too. And so we have discussed the possibility of teaching them our platform and showing them how to become CRO-independent and the incredible cost savings that are enabled by CRO-independent. So I think those are all 3 opportunities for us to look for new assets or look to, if you will, leverage our platform. But we're aggressively looking for new assets now, to answer your question.

Our next question will come from the line of Nick Abbott from Wells Fargo.

So just on the logistics of IRB, you said this is a side-by-side exercise via the approval. Where are you across these 30 sites in ENVASARC?

Yes. Thanks for the question, Nick. I don't have an exact count, but we have 30 sites in this study now. We have 29 U.S. sites, and we also have now a site in the United Kingdom, which has been a site we've used in the past. It typically is a very high recruiting site. So we've opened about half the sites under the new amendment and expect the other half to open by either end of this month or April.

I would say the sites have been pretty quick in terms of opening the study. And I think it's because it's such an easy amendment, if you will, that it's the same study, just double the dose. But that's a general feel for how quickly sites have gotten open. I mean we have basically sent the amendment into the FDA very early January. It was approved by February, as we announced. We're dosing patients under the amendment as I speak, including at the new dose starting from cycle 1, day 1 and expect almost every site to be opened by end of April, if not every site.

Okay. And then as you see -- you explained that if you see these 9 responses early, then it gives you an opportunity to approach the agency. So a couple of points there is -- I mean there's not really a traditional question of equipoise. But do you give the opportunity for both cohorts to get to these 9 patients?

Because if you go ahead with 1 cohort, why not just switch enrollment to that cohort and then treat the cohorts sequentially rather than in parallel to accelerate the trial? And then what would the result be or what would you want to get from going to the agency with 9 responses early?

No, that's a great question, Nick. I mean we're committed to fully enrolling each cohort based on the ongoing analyses and reviews by the Data Monitoring Committee. And I think we're committed to that because we feel that there might be certain patients -- let's take, for example, our target product profile. Let's take, as stated, that we hit a 15% response rate with single-agent and then we hit a 30% response rate with enva plus Yervoy, just for the sake of argument.

We also know that the doublet of immunotherapy will have a more toxic profile compared to just single agent envafolimab. So it's really a balancing. And so we expect to fully enroll both cohorts unless the DMC intervenes with the idea that we'll see better efficacy in the dual inhibitory cohort, but also increased toxicity and likely a lower response rate with better tolerability in the single-agent cohort. But our goal is to see both cohorts reach the end point.

So an individual -- and our real goal, Nick, is to approve the drug in 2 ways. It's to approve it as a single agent and with Yervoy based on both cohorts having 9 responses at least and also there being a differential response rate between the dual-cohort versus the single-agent cohort. So that will be the premise by which we anticipate fully enrolling both cohorts.

And what we like about that it gives the clinician the opportunity to potentially prescribe envafolimab as a single agent to a patient who might really want to really benefit from a much more restricted safety profile versus, say, a typical patient that can easily tolerate dual immunotherapy and benefit from the higher response rate. So we like that potential dual approval because the optionality gives a clinician.

So with respect to your question, when we -- our anticipation is we'll hit 9 responses in both cohorts. But I think hitting it in a single cohort just allows us to start approaching the agency about, we've hit the end point in at least 1 cohort, we'll continue enrolling both cohorts to the full 80 patients, but let's start discussing how we would initiate a filing strategy.

So it just lets us potentially interact with the agency on a closer means to facilitate the filing strategy. But to be clear, our goal will be to fully enroll both cohorts, and our goal remains a potential dual approval to allow single agent and potentially combination enva plus Yervoy to be approved in refractory UPS and MFS.

Okay. Fair enough. And then cumulatively, how much has the company spent on the arbitration proceedings with I-Mab?

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

Okay. And then just a last one from me. And that is, you said earlier the $9 million that you expect to receive from I-Mab, I'm just interested in -- the mechanics there, I sort of almost had this vision of you, Charles, with a bag of cash walking out to the drop zone and -- sorry, take up a bag of cash walking out to the drop zone and you've got -- you have a big binder full of data. But are you confident that they're going to pay? Would it be put in escrow? And if you get the payment, does it take you into 2024?

Well, maybe we should add some security forces to our team. I think we are confident that if I decide to terminate the agreement, they'll fulfill their license obligations and make the payment. In terms of the -- I can't go into the kind of the details of how that works, but it's very carefully spelled out in the license agreement.

In terms of the capital runway, I mean, I would say if you look in the past before we were involved in this legal dispute, I mean, our runway in terms of what it -- I mean I'll give you an example. 2020, our total expenditures were $18 million. So when you think about how cost effective we are with respect to running our business, $9 million in 2020 would have given us 6 months of runway. So we continue to execute on that very efficient operations model, and that should give you some perspective on how much $9 million would -- how far would go, given our efficiencies.

(Operator Instructions) Our next question will come from the line of Matthew Cross from Alliance Global.

Wanted to ask -- I was curious if there's anything you could say regarding whether or not we would see some further data potentially that may steer towards precision indications for YH001 later this year or between discussion of the design details for the Phase I/II that you mentioned is set to begin by the second half of this year?

Just any -- I was curious to get any kind of design implement details that you could provide at this time or any data that maybe points in that direction. I guess any particular considerations we should be thinking about for the asset, given the enhanced properties relative to Yervoy?

No, I appreciate it, Matt. Yes. So for YH001, what we're going to implement is, is a Phase I/II trial. And the design of that trial will -- so YH001 actually has a lot of clinical data behind it. It's been studied both as a single agent in a Phase I study and also as a combination agent with the PD-1 antibody toripalimab in a separate Phase I study. So it has a well characterized, if you will, safety, efficacy and PK profile to those 2 separate Phase I studies.

So we plan to combine YH001 with enva initially and expect us to use the enva dose currently in ENVASARC with the YH001-recommended Phase II dose from the Phase I studies, so to confirm that's tolerable, and then take that dual checkpoint regimen and add that on to doxorubicin chemotherapy. With the knowledge that in most cases, you can give checkpoints with chemotherapy without too much issues of overlapping toxicity.

So that triplet would be the goal of coming out of the Phase I portion of the trial. And then we would use that triplet in separate cohorts of Phase II patients, and we haven't gone into detail around those cohorts, but it might be 3 or 4 different histologies of sarcoma, knowing we wouldn't add UPS until we finish ENVASARC. But there are several other histologies where the combination of chemo and dual checkpoint inhibition could be quite interesting.

And the real goal of that Phase I/II trial is to define the subtypes of sarcoma that clearly respond to that triplet better than dox single-agent historical data. And then take those subtypes and take those into the eventual Phase III trial, which would be our post-approval commitment study coming out of the expected envafolimab approval through ENVASARC. So to be clear, the ultimate goal is that we will go frontline with dox with or without enva plus YH001 compared to dox single agent.

And the key will be which subtypes of sarcoma should we enroll in that trial. And clearly, UPS MFS would be one of them based on the anticipated ENVASARC approval. But the other subtypes, which would be defined in part to this Phase I/II trial of YH001, enva and dox, looking at response rates compared to historical dox data.

So that's why it's such an important trial for us. It really informs as to who enrolls in the expected frontline randomized Phase III trial that we expect could significantly expand the label of enva and then also the basis for approval of YH001 broadly in sarcoma frontline.

Got it. I appreciate those kind of early hints at what you're looking to do and at this stage (inaudible) And then just one quick confirmation. I wanted to -- now that you've mentioned that the NCI has started up the Phase II trial of 102, just wanted to confirm, it looks like the design (inaudible) survival endpoints. But given the readout you alluded to being in 2024 from that study, I know there's only so much you get with these investigator-sponsored trials in terms of direct oversight.

But was curious if there's been any discussion regarding the profitability for kind of interim response level type areas or if it's just kind of a long haul for safety? And then that's fine as well, but I wanted to get some clarity there.

Yes, good question. I mean I think the key endpoint on that study, which I would expect would be an approvable endpoint, is progression-free survival. And the primary endpoint is 1-year PFS, with the goal to increase that from 56% in the control arm to 76% in the test arm that includes TRC102.

In terms of interim assessments prior to that, I wouldn't count on anything per se. But as you point out, that's out of our hands in the hands of the CTEP investigators running the trial. But I wouldn't count on anything happening prior to the actual determination of the 1-year PFS.

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

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

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