Thank you for standing by. At this time, I'd like to welcome everyone to Arvinas Third Quarter 2024 Earnings Call. All lines have been placed on mute to prevent any background noise. [Operator Instructions] I will now turn the conference over to Jeff Ball. Please go ahead.

Good morning everyone and thank you for joining us. Earlier today, we issued a press Release with our third quarter 2024 financial results and a corporate update which can be accessed in the Investors section of our website@arvinas.com. Joining the call today are John Houston, our Venice Chief Executive Officer, President and Chairperson Noah Berkowitz, chief Medical Officer and Andrew Sake, Chief Financial Officer. Angela Cacace, our Chief Scientific officer, will join for the Q&A portion of the call. Before we begin, I want to remind you that today's discussion will contain forward-looking statements that involve risks, uncertainties and assumptions. These factors are outlined in today's press release and in the Company's recent filings with the Securities and Exchange Commission, which I urge you to read. Our actual results may differ materially from what is discussed on today's call. I'll now turn the call over to John Houston, our CEO, President and Chairperson. John?

Thanks, Jeff. Good morning everyone and thank you for joining us for our inaugural earnings conference call. So why are we starting earning calls now, some six years after our IPO? Well, we have a truly exciting year ahead of us and we're on the cusp of a huge transition for the Company as we await our first pivotal data readout coming by the end of 2024 or the first quarter of 2025. In addition, we continue to make significant progress with a novel approach to discover, develop and commercialize a new class of medicines for the treatment of cancers and neurodegenerative diseases. As we look now forward to providing updates each quarter as we move closer to our goal of becoming a multi-product commercial stage organization with a robust pipeline across several indications. We have a lot to discuss this morning so I'd like to provide an overview of the topics we'll be covering. I'll begin with a brief overview of Arvinas, our full time discovery platform, and an update on our pipeline. Noah will then provide an overview of our expectations for the VERITAC-2 trial and discuss our confidence in the combinability of Vepdegestrant or Vepdeg with other metastatic breast cancer treatments. And finally, Andrew will provide an overview of our third quarter financial highlights. I'll add some closing remarks including what we believe is the opportunity for Vepdeg both as a combination and monotherapy before opening the call for QA when as Jeff mentioned, we will be joined by our Chief Scientific Officer Angela Cacace. In the 11 years since our founding we have taken major strides towards our mission to improve the lives of patients with serious diseases. Our pipeline of proteolysis targeting chimeras, or PROTAC protein degraders, have been designed to harness the body's natural…

Thanks John, and good morning everyone. I'm happy to provide an update on the progress we and our partner Pfizer have made with our Vepdeg program. Let me first note that even with the recent advances in treatment options, there is still a high unmet medical need in ER+/HER2- metastatic breast cancer despite the availability of multiple therapies as patients move into the late line setting, most will experience disease progression within a few months of initiating treatment. Also, the tolerability and the route of administration of available therapies may adversely affect patients’ quality of life. We believe Vepdeg has the potential to become a best-in-class backbone ER targeting therapy with superior efficacy and tolerability which could support it becoming a preferred and valuable treatment option for physicians and their patients. This is why I'm excited to discuss the VERITAC trial, our second line plus phase 2 trial with Vepdeg which is on track for a top line data readout by the end of 2024 or in the first quarter of 2025 with timing driven by accumulation of PFS events. The trial is evaluating the efficacy and safety of Vepdeg compared with fulvestrant in patients with ER+/HER2- advanced breast cancer. The patients enrolled in VERITAC-2 have previously received and progressed on a combination of CDK4.6 inhibitors and endocrine therapy. VERITAC-2 has two co-primary endpoints, progression free survival or PFS in the ICT or Intention Decrease Population and PFS in the ESR1 mutation subpopulation. PFS will be assessed by blinded independent central review. Secondary outcome measures include overall survival, anti-tumor activity including objective response, duration of response in clinical benefit rate and safety and quality of life assessments. Although important progress has been made in treatments of metastatic breast cancer for patients who have received prior treatment with CDK4/6 inhibitors, the…

Thanks Noah. I'm pleased to share financial highlights for the third quarter ended September 30, 2024. As a reminder, detailed financial results for the third quarter are included in the press release we issued this morning. As we near our first Phase 3 trial readout we are in a strong financial position with cash on hand sufficient to support our operations into 2027. At the end of Q3, we had $1.1 billion in cash, cash equivalents and marketable securities on the balance sheet. This allows us to progress all of our key strategic objectives, which include progressing the Vepdeg clinical program, including two expected Phase 3 programs starting later next year, preparing for our first launch of a commercial product, and advancing our promising portfolio of PROTAC degraders. Let me now turn to financial highlights from the third quarter. During the quarter, we recorded $102.4 million in revenue. That was compared to $34.6 million in revenue for the same period in 2023. The increase of $67.8 million was primarily due to revenue from the Novartis license agreement of $76.7 million, offset by a decrease in revenue from the collaboration agreement with Pfizer of $7.6 million and a decrease in revenue from Bayer of $1.1 million. General and administrative expenses were $75.8 million in the third quarter, compared to $22.6 million for the same period. 2023. The increase of $53.2 million was primarily due to the termination of our laboratory and office space lease with 101 College Street of $43.4 million, as well as increases in personnel and infrastructure related costs of $5 million. Research and development expenses were $86.9 million in the third quarter, compared to $85.9 million for the same period in 2023. The increase of $1 million is primarily due to an increase in personnel related expenses of $2.8 million, partially offset by a decrease in program related expenses of $2.2 million. As we embark on a pivotal year for Arvinas, we are focused on making strategic investments in programs that are meaningful to patients and fully differentiated. I'm confident that a strong balance sheet will enable us to accomplish our objectives. With that, I'll turn the call back over to John for closing remarks. John?

Thanks Andrew. This is clearly an exciting time for Arvinas. We are well on our way to becoming a commercial stage organization with strong leadership and a rich pipeline across multiple therapeutic areas. In partnership with our colleagues in breast cancer at Pfizer, we have an exceptional team of experienced leaders who stand ready to bring Vepdeg to breast cancer patients in need of new treatments. We believe that the upcoming top line data from the Phase 3 VERITAC-2 trials will be the first step in establishing Vepdeg as an ER backbone, therapy first as a monotherapy, and over the next few years in combination with other treatments. Every year, nearly 40,000 patients with metastatic breast cancer are treated in the second line plus setting, with approximately 1/3 receiving monotherapy treatment. In the first line setting, another 40,000 patients are treated every year and most of these patients will receive an ER therapy as part of their treatment. By establishing Vepdeg as a monotherapy in the second line plus setting, we have an opportunity to lay the foundation to potentially change the treatment paradigm for many thousands of patients with advanced ER+/HER2- breast cancer. In addition to Vepdeg, we're advancing a broad pipeline of product candidates across several therapeutic areas, including hematology and neurology, with our PROTAC Discovery engine. Before opening the call to your questions, I'd like to thank the patients and physicians who are participating in our clinical trials. I'd also like to thank our talented and dedicated Arvinas team and our partners in breast cancer at Pfizer for the hard work and passion they bring every day. Our progress would not be possible without their commitment. And lastly, I'd like to thank our shareholders for their continued support. With that, I'll now turn the call over to Jeff to begin the Q&A portion of our call. Jeff?

Thanks John. Before I turn the call over to the operator, I'll ask that you limit yourself to one question per cycle to make sure we're able to give appropriate time to everyone. Feel free to rejoin the queue for any follow up questions and with that operator, can you please open up the queue?

Thank you. And your first question comes from the line of Akash Tewari with Jefferies. Your line is open.

This is Manoj in for Akash. Thanks for taking our question. So just one should investors base case be that price moves with their CDK-4 combo with the Vepdeg not only for the first line but also for the second line? Why would I Brands or any other CDK4/6 combination be used at all in the in your pivotal studies if CDK4 inhibition shows meaningfully better heameotoxicity?

Thanks for the question. Could you just repeat the beginning of the question?

Should be the base case be like Pfizer moves with the CDK4 inhibitor combo with Vepdeg in the first line and like second line.

I see. So you're asking whether or not our base case should be in the first line, should be CDK4 + degastrant.

Yes.

That's a great question. Clearly first of all we're very excited about the fact our data is right on our doorstep. So by the end of this year, beginning of next year, we'll have our pivotal data. We're also excited by the fact that we have a combination ongoing with a atirmociclib. Clearly that's a very exciting asset. I think if we end up choosing as with Pfizer, that that is the combination partner, I think that would be a great step forward. But obviously we've got data ongoing with our atirmociclib [ph] combination. We'll have that data this year and allow us to make decisions next year with Pfizer in the combination. But yes, I think we'd be very excited if the data tells us that the CDK4 that degastrant combination is the right one. We'd be very excited.

Yes, thank you.

Next question comes from the line of Brad Canino with Stifel. Your line is open.

Good morning and thank you for the updates. Question for me on the upcoming abemaciclib combo data, could you help frame that expectation relative to the Palbo combo data you presented last year where you had the 11 month PFS, the strong response rates activity in both ESR1 mutant and wild type. Is that the bar as we think about additional CDK combos that you will be unveiling over the next several quarters in these pretreated Phase 1B populations? Thank you.

Yes, thanks. Great question. Clearly we were very, very excited about our dataset with the Palbo combination. I'm going to hand this over to Noah in a second. The thing to remember is that dataset that was not 100% patients that were CDK4/6 experienced 86% of patients in CDK4/6 and then 14% didn't in this trial with abemaciclib when you see this data, it's 100% post CDK4/6. So just with that caveat, I'll ask Noah to make some comments.

Sure. So we had the benefit when we reported the results of the Palbo vecta combination last year to have long follow up of patients. And so that's why I think you referenced the median PFS we observed there. But in addition, as you suggested, we were able to look at response rate and safety in that population. So I would view this smaller data set that we're going to be presenting from a abemaciclib with shorter follow up as a dataset that can inform about the efficacy of the drug. But looking at things like the response rate which can mature further and similar for CBR and then on top of it, the safety profile which will include actually even more recently treated patients and will be a larger dataset and then you can make that type of comparison.

Got it. Thank you.

Next question comes from the line of Etzer Darout with BMO Capital Markets. Your line is open.

Great. Thanks for taking the question. Thank you for the updates today. Just a question around the fulvestrant control arm for VERITAC-2. We've got questions on that sort of if you could maybe frame your expectations and do you think sort of there's anything we can read through to the Lilly upcoming data sets around sort of, where sort of that control arm lands and where how it actually could perform for VERITAC-2? Anything incremental on your expectations around that? Thank you.

Yes, great question and again I'll be handing over to Noah just to give you some detail in terms of the answer there. The Dynavar [ph] VERITAC-2 trial was based on standard of care, which was fulvestran and still is. And our design is to show that we can be superior to fulvestran. We're also very excited to see what the Ember-3 data will show when it comes out. And clearly we want to be able to look at the different patient populations there. Again, VERITAC-2 will be 100% CDK4/6 experienced patients. And when you look at Ember-3 data, you want to be able to look at that data and be able to do the kind of like for like comparison. Nola, do you want to say any more about the fulvestran control arm and how that may be compared to what Lilly might do?

Sure. Thanks John, and thanks for the question. So overall it's difficult obviously to predict exactly what we're going to see from the fulvestran arm. We expect that given the prior treatment that patients have experienced, it'll be somewhere in between what was observed in the Emerald study and what was observed in the post Monarch study. So we would expect it to be somewhere in the 3, 4 month range. And by comparison we would hope to see a few months better for the Vepdeg arm. And in terms of that second part of your question about Ember-3, we don't know exactly what to expect from that. What we'll be looking at is what is the safety and tolerability of that combination and also in what patient population? There is some. When you look at the inclusion criteria for Ember-3, it looks like patients who were not CDK4/6 exposed could be enrolled in the study. So we'd have to understand the results in the context of prior CDK4/6 exposure to draw any comparison to our study.

Great, thank you.

Next question comes from the line of Ellie Merle with UBS. Your line is open.

Hey guys, thanks for taking the question. So I guess into VERITAC-2 how are you thinking about the potential for success in the non ESR-1 population? And if you could sort of review the reasons you think that this could be successful and then what do you think is the minimum threshold for success here on PFS to be able to get this broader label across ESR-1 and non ESR-1 patients? Thanks.

Thanks Ellie. That's a great question. And again, I'll be handing over to Noah for the specific answer. Clearly, in this second line plus patient population, we are fighting against the biology of the disease. Obviously a significant part of the disease is driven by ESR-1 mutation. We think around 40% of the patients will have tumors that are still endocrine sensitive. And then there's a large group of patients with tumors that have got, well, type and other driving mutations. And we think a slice of that patient population will also be able to react well to Vepdegestrant. So just remember that there's that biology there of the disease that we're fighting against. But yes, Noel, do you want to be specific about.

Sure. Not a lot to add there because I think you addressed it, but I would say that our expectation is, as you know, we have co primary endpoints in the study. We're looking at the ESR-1 mutant and IPT population. So our expectation is that we're going to be successful with those primary endpoints. Our base case score what will be approved is the ESR-1 mutant subpopulation more than anything else because that's the precedent that's been set at regulatory bodies. What we have to see though, in the non mutated patients would be some type of, I assume regulatory bodies will want to do some post hoc analysis and we'll be looking at that with them and we'd want to see some benefit. Though I'd remind you that the study is not powered for that population. We believe that it would be successful. As John outlined because the underlying biology of the wild type population is that many of those patients are still endocrine sensitive and don't have alternative driver mutations that might limit their responsiveness to Vepdegestrant. So we remain pretty confident that we can see a positive result for ESR-1 mutant and for the ITT population. Thanks Ellie.

Great, thanks.

Next question comes from the line of Derek Archila with Wells Fargo. Your line is open.

Good morning, this is Evan [ph] for Derek. Thanks for taking our question one from us. Can you help frame a little bit the market for Vepdeg assuming you hit [Indiscernible] in both ESR-1 mutant patients and wild types? And what if you only hit in the ESR-1 mutant patients? Are there any good analogs there? Thanks.

Yes, thanks for the question. And clearly we think there's a significant opportunity here specifically for monotherapy. Then even bigger opportunity as we move into second line combination and first line combination. I think as I said earlier, nearly 40,000 patients with metastatic breast cancer are treated in the second line setting. And right now about a third of them are getting monotherapy treatment. And then in the first line setting it's another 40,000 patients are diagnosed every year. And the majority of those patients will receive an ER therapy as part of their treatment. So we believe the game plan of establishing Vepdegestrant and its potential as a monotherapy in that second line plus setting will give us the opportunity to lay that foundation to potentially change the treatment paradigm for those many thousands of patients that have got ER+HER2- breast cancer. And of course, if we can show a PFS in line with combination therapies, we believe we can grow the monotherapy opportunity significantly.

I just wanted to put one comment, not addressing the underlying market question, but you had mentioned statsig for wild type and for ESR-1 mutants. So again I wanted to remind that the study design is to look at and we'll be doing our statistics on the ESR-1 mutant and for the ITT population. We're not doing stats for the wild type subset of the ITT population. I just wanted to make sure that was clear.

Next question comes from the line of Li Watsek with Cantor. Your line is open.

Hey, good morning guys and thanks for taking our questions. I guess for the Phase 3 combo trials in frontline and second line, wondering if you can elaborate a little bit on the key regulatory inputs that you still need before you nail down final design and how much of that is still dependent on the data that you need to generate.

Thank you for the question. Yes, the question is about the key regulatory thinking in terms of the path forward for our first line and second line combos. Noah, do you want to talk to that?

So again, these are ahead of us. So after the VERITAC-2 results were, which we're expecting in Q4 Q1, we head into the planning for next year that I think you're alluding to, which is combinations for first and second line. Each of those requires a health authority discussion. You've seen in our guidance that we, and heard in our conversation a moment ago that we're looking to combined in the second line with Palbo and or a CDK4 another CDK4/6 inhibitor. And in first line we can be combining with the TMO or Palbo, and we've also shared that we're very excited about that opportunity if we can combine with the Turmo [ph]. So those there are different considerations for each, will be what it depends on what is the comparator arm for in each of these studies? We haven't announced that. So that would be a discussion point with regulators, the exact patient population that's being chosen. And particularly in first line, there's no doubt we'd get into a deeper conversation about contribution of components if we're using two novel agents. But we believe that there are a lot of supportive data that will allow us to navigate that discussion. But at this point, that's probably the most guidance we can offer about what the regulatory discussion might look like for combinations in those settings.

Next question comes from the line of Ted Tenthoff with Bipolar Sandler. Your line is open.

Great. Thank you very much and thanks guys for hosting this call today. It's nice to hear from you and get the update. I know there's a lot going on. I know most of the questions have been on Vepdeg, but just to ask with Novartis and 766, what's the latest there and how do you and they anticipate advancing that in prostate cancer? Thank you.

Thanks, Ted. Great question. Yes, as you know, we did the out licensing of 766 earlier this year and we spent the last several months in the process of handing over data materials, all the information that's needed to get Novartis up and running to progress ARV-766. Clearly the excitement for us in terms of doing that out licensing was Novartis commitment to go into early prostate cancer. And that is the game plan that they still have. So they've been looking at early and late stage prostate cancer using ARV-766 and we think based on the interactions we've had, they're well on track for that. Obviously now with it being out licensed, all of the kind of significant updates will come from Novartis themselves. But we are really pleased with how the transfer of information material went and the game plan that Novartis has actually shared with us on 766. And of course we will be able to share in the future scenarios for 766 as it progresses. And we are looking forward to getting updates from Novartis as it does.

Thanks, John.

Next question comes from the line of Tazeen Ahmad with Bank of America. Your line is open.

Thanks. Good morning. Maybe the switch topics to ARV-102. Can you talk about the size of the PD population that you're specifically examining that have this elevated LRRK2 and how are you going to use the biomarker to determine segmentation of the population?

Thanks Tazeen. Great question. We have in the room here with us Angela Cacace, our Chief Scientific Officer, and I'll hand directly over to her to talk about the answers to those questions.

It's a great question. So the estimated size of the population that's believed to have elevation of LRRK2 is about a third of the idiopathic Parkinson's disease population, pretty sizable. And so, it is still under active investigation how you would actually employ the biomarkers that we've recently described at the Michael J. Fox Foundation Therapeutics Conference. And so, we're partnering with that group. So both the Parkinson's progression marker initiative as well as their Mark 2 initiative to really understand how do you stratify patients. But we're really encouraged by the data that we have that suggests that we can study both inflammatory markers as well as lysosomal markers to stratify the patients appropriately to conduct a reasonable clinical trial.

I might build on what Angela said. Just reminding you that we are currently running a study with ARV-102. We completed the single ascending dose portion of the healthy volunteer study. We're currently in the multiple ascending dose portion. But the take home message is that in this study we're looking at all comers and these are healthy volunteers. They don't necessarily have elevated LRRK2. We're going to move next and look in patients who have Parkinson's disease. As you heard from Angela, we expect a third of patients will have elevations. There's going to be no selection at the start of that study, but we're going to learn from doing these from looking at our degradation of LRRK2 at various doses of the drug and looking at those downstream biomarkers, what our overall approach, and I think at this point there's a wide open field. We can end up being not selective of patients at all, or we could end up choosing to look at patients with elevations. It will all depend on the data that we generate and how we interpret it.

Next question comes from the line of Michael Schmidt with Guggenheim. Your line is open.

Hey, thanks for taking my question. I just had a follow up on ARV-102 and the Phase 1 study. How should investors interpret the Phase 1 data in healthy volunteers next year? Are there specific PD markers perhaps other than LRRK2 degradation that you're assessing and how predictive are those for putting potentially improving outcomes longer term?

Right, so the healthy volunteer portion of the study is really designed to understand the PKPD relationship of the drug and track what we're doing peripherally and more importantly in the central nervous system, you know, is monitoring the drug and the and the LRRK2 expression in the CSF. We don't expect that healthy volunteers will have elevated downstream biomarkers, that are associated with the neurodegeneration that's seen with this disease. That's something that we'll be looking at more confidently, obviously, when we move to patients as opposed to healthy volunteers. But I think that what we can walk out of this confident about, if things are successful, is that the modeling that we did to predict dosing of the drug and its impact in the CNS compartment, the modeling we did in the CNOs that is so promising that that can be recapitulated in human beings, that this can drive the right dose selection and then that sets us up for success when we move to, when we're looking for this on target activity at the right dose in patients with PD [ph], and I think that's quite a lot right there.

Next question comes from the line of Tyler Van Buren with TD Cowen. Your line is open.

Hey guys, thanks for hosting the call. I just want to follow up on your response to an earlier question for the VERITAC-2 trial readout. So if the control fulvestrant arm dose three to four months on median PFS and you hope to see a few months better, per your earlier comment, or a 3 month plus delta in the ITT population or a near doubling, how do you expect median PFS to improve for both arms for the ESR-1 population analysis?

Thanks, Tyler. Well, I just want to -- going back to the earlier comments, I think what we said I said part of that, but I'm not sure all of it. Our expectation is three or four months in the fulvestrant arm, a few months better on the treatment arms. We haven't differentiated what we're going to see for the ESR-1 mutant or for the total population. We would expect that ESR-1 mutant patients will do a little better because they have this dependency on the ligand independent estrogen receptor driven binding estrogen receptor driven proliferation for their tumors. So we just haven't gotten into those specifics or gone through the operating characteristics of the statistical plan. But suffice it to say, a few months better as I outlined.

Next question comes from the line of Jonathan Miller with Evercore ISI. Your line is open.

Hi guys, thanks for taking the question. I'd like to talk more about the Vepdeg combo phase 3s that you're talking about getting started next year. Can you contrast VERITAC-3 Phase 3 portion with these new Phase 3s that you're talking about? And it seems like the PR suggests you're focused on Palbo and CDK4. It seems like you're not pursuing ribo or abema combos in first line. At least it wasn't called out. So can you talk a little bit about how the data from what you're still waiting for from the TACTIVE trials to make the decisions about Ultimate Combo partner A. And B, given the CDK4 combo data you mentioned will be available internally this year for use in deciding about those combination Phase three? Is it fair to expect that you'd give some key details on the CDK4 Vepdeg combo data when you decide on a phase 3 course? Because I notice you haven't given guidance on when we could see that type 2k update.

Yes, thanks. Great question. I think clearly there's a number of different trials we have ongoing that are going to generate data that's going to really influence our decision making. We have VERITAC-2, we have the Abema combo, we have the Aterimo combo, we have the Pablo sli. We also have the ribo combo ongoing as well. So a whole bunch of data that's coming out now and through into the early part of next year that sitting down with our colleagues with Pfizer will be able to decide what is the right combination. Obviously there's preferences there, but we'll wait for the data to actually drive that decision. But Noah, do you want to go into any more of the Specifics.

Yes, maybe we could dive in a little more. And thanks for the question, Jonathan. So let's look at first line and then we can look at second line. So first line. I think the original intent some years ago was to go with [Indiscernible] in first line. And that was an obvious choice. Palbo was the most prescribed drug in that CDK4/6 in that setting. Pfizer is our partner and so they could supply it. And unfortunately we weren't able to roll straight into that because we were challenged to find a lower dose of Palbo that would satisfy benefit risk from the perspective of health authorities. And so we started the VERITAC-3, which is the SLI portion of is reading out, as John mentioned. But in the meantime we will have the fullness of that data set, but also have now done the work for turmoil and we're very excited about it in the turmoil combination of the first line because it would be a very differentiating combination, possibly a best-in-class CDK4 or CDK4/6 drug combined with what we believe would be a best in class PROTAC in this setting, which would be superior to the CERD alternatives and it would fit perfectly in this partnership as well. So we're waiting for that study, but we weren't considering things like ribo and abema because I think they don't really solve for those problems. Right. Turmo gives us that differentiation and Palbo was ease of use. In the second line setting we've guided to either using a Palbo combination because we have great results in this setting that we've already shared, or and maybe offering some choice to prescribers or to investigators. In this case by allowing another CDK4/6, which could be presumably something like abema. We're not guiding specifically to this, but the idea is that we may end up doing it, and you should just look forward to the essay, the San Antonio breast cancer data to make your evaluation of this abema Vepdeg combination and the viability of that in the second plus setting. What we really like, of course, about all of these opportunities is that Vepdeg is a very combinable drug. While we did see that there was more neutropenia for the, with full dose Palbo and Vepdeg in the original data set we performed, we will now be sharing more data about the broad combinability of this drug. You'll see the abema dataset, you'll see some work about better understanding of metabolism with the midazolam study. And then, as we've said next year, we'll provide some updates as the data mature for the ribociclid portion of the -- as well as the termocyclib combination seen in TACTIVE-K.

Next question comes from the line of Paul Choi with Goldman Sachs. Your line is open.

Hi, everyone. This is Khalil [ph] calling in for Paul. Thank you so much for taking our question and congratulations on the first earnings call. I guess a quick modeling question from us is one, I guess real quick is as you have a lot of these earlier stage assets entering the clinic or IND filings, how should we think about the cost ramp for next year, maybe the year after? And then just on the Novartis agreement, given the revenue recognition that you had this quarter, are we correct in thinking there's about 930 million in additional payments? Or is that like, how should we think about the cadence of that going forward? Thank you so much.

Yes, thanks for the question. I'll hand over to our CFO Andrew to answer these questions.

Yes, thanks for the question. Look, we haven't given specific guidance on our expense structure and we're not planning on doing that in the near term. Obviously, the mix of projects that we have, programs going out is changing. Right. So previously the company had the two phase 3s. We've out licensed the one to Novartis. That was done consciously by the company to manage expenses and manage our burn. As we have these other programs coming through the clinic, clearly they're going to start costing a little bit of money. We're well aware of what we're going to be spending on them and we're very confident in the guidance that we've given in terms of cash into 2027 with our current balance sheet. I think you had another question on Novartis. Can you just repeat that? I'm not sure if I heard that.

Yes, of course. So just given that we assume that the $150 million upfront payment has already occurred, and then you reported say, $67 million or so in revenue from that agreement, our understanding is that there's a total of, about a billionish in payments that are, you know, contingent on certain milestones. Obviously, those I don't think have been disclosed. But we were just, wondering if you could share any color on how we should think about the cadence of revenue from that agreement, like in 2025.

Yes. So the revenue that you're seeing on our PML right now is all deferred revenue from the upfronts. So that doesn't have anything to do with future milestones, etcetera. We amortized the upfront from the Novartis agreement over this year because that's the period during which we were handing over responsibilities for the trials. And so we still had responsibilities with Pfizer. It's much longer. So we obviously had the large upfront from them and that's a cope, that's a deal, that's a 50 50. So we're actively engaged in that. So we're amortizing those revenues over a longer period of time. So you'll actually see the Novartis drop off this year. The Pfizer will continue on for some years.

Got it. That's really helpful. Thank you so much.

Next question comes from the land of Yigal Nochomovitz with Citigroup. Your line is open.

Hi, thank you for taking the questions. And I just wanted to follow up on some of the questions regarding the frontline strategy in the comments Noah was making on contribution of components. So if it turns out that you pick and you and Pfizer pick a Turmo plus Vepdeg, are you going to be able to do a trial where it's a term of Vepdeg versus Palbo fulvestrant or given the consideration of contribution of components, is it going to potentially be more complicated with including a Palbo Vepdeg arm as well as an fulvestrant arm? I'm not sure how that would work if you could comment. And then I'm just also curious if you've generated data today to support the fact that you won't have a DDI with Atermo and Vepdeg? Thanks.

Thanks, Yigal. Great questions. Noah?

Okay, I'll try and tackle this. Let's jump in with the follow up if I missed part of that. So first of all, so in first line, we're not guiding to the exact design of the study, but I think we're going to be. I think you can be confident that we would be focusing more on an AI combination in that setting rather than fulvestrant or that's the initial setting, whether it's Palbo alone or CDK4/6 voice on the part of physicians. These things are not dependent find, haven't been, you know, resolved with regulatory authorities yet. In terms of -- but I think that kind of addresses what you asked. Is there something else…

That that's related to the design part?

I think you got the secondary question related to do we have any idea? We have a DDI with atirmociclib. What I would say about that is we believe that the data which you'll start to see from the San Antonio Breast Cancer Symposium and onward will show that Degastran is the compound that is going to be very broadly combinable with any of the medications in the breast cancer space. That would include a atirmociclib. Clearly in all of our studies we're tracking this now and as I say, the data will come out and show that this is a non issue from a clinical perspective.

Okay, appreciate it. Thank you very much.

Thanks, Yigal.

Next question comes from the line of Bila [Indiscernible] with Truist Securities. Your line is open.

Hi, thanks for the call. This is Bill on for [Indiscernible]. We were wondering what's going to be the final deciding factor or maybe factors on choosing which combo to take forward. Is it strictly on efficacy or is there some sort of strategic IP factor involved too that you're thinking of as well. Thanks.

Well, obviously is going to be based on all the data that we're going to be generating and are generating. As I mentioned earlier, we have ongoing combination trials with abemaciclib, with the termaciclib, with ribociclib, that type of and the SLI data and parmaciclib. All of that data will be in our hands till end of this year, first half of next year. And that will really drive the data driven aspect of our decision making. Won't all just be looking at the efficacy and we're looking at safety, tolerability. So we'll get a true gestalt view of our overall data set. So I think we'll actually be in an incredibly good position to make a really smart decision about the combinations. As I said this clearly we have some biases, but the biases will be influenced completely by the data set.

Yes, and I would just add a small point John, that when it comes to efficacy, look, we're sharing data about what we see in the second line setting and I think the efficacy there is characterized by things like ORR and CBR. In first line the efficacy that would be at our disposal are probably those type of data points. We're not going to wait for medium PFS. Obviously in first line where you have medium PFSs that can exceed two years, one wouldn't wait for that. We would use other signals when looking at efficacy, and obviously then safety to make a decision.

Great, thanks.

Next question comes from the line of Matt Biegler with Oppenheimer. Your line is open.

Hey guys, thanks for squeezing me. And I realize we're at the top of the hour. It's like covering a large cap. With the number of analysts here, I just wanted to ask about the statistical plan for VERITAC-2. To the extent you can tell us, is it hierarchical testing or are the co primary endpoints like effectively the alpha split between them between the ESR-1 and the ITT population? And secondly, do you think a 0.7 hazard ratio would be good enough for an all comers label? Thanks.

Okay, so thanks for the question, Matt. In terms of the hierarchy, we have two co primary endpoints and we can win on either one of them. We're going to. But for all purposes we think that the ESR-1 mutant is obviously going to be even more likely than the ITT. That's just the nature of the disease. We're treating it. There is some hierarchical testing that goes on from there, the specific of which we haven't defined yet. In terms of what was the second part of your question, remind me about the hazard ratio. So we haven't gone to the specifics of the hazard ratio. I will say that we would expect a better hazard ratio or are expecting to achieve a better hazard ratio in the ESR-1 mutant than in the ITT population. But more specific than that I won't go into.

Appreciate it.

Thank you.

Next question comes from the line of Michael Smith with Guggenheim. Your line is open.

Oh, hey guys, thanks for taking a follow up. I just had a clarification question regarding your earlier comments on VARITAC-2. I think you said you expect about three to four months PFS for restaurant in the control arm. And yes, I was just wondering what are or are there any major differences in enrollment criteria relative to the post Monarch trial where fulvestrant obviously did much better than that.

Yes, well the fulvestrant didn't do much better than it a little better. There was four months in the interim analysis and I think 5.3 months in the final analysis. People are hard pressed to understand why the median PFS improved. And was there a change in the patient population between those two analyses which were both presented at the same time at ASCO. But the differences are that we have the ability to have patients that were treated like with an endocrine therapy twice. They may have had an exomestine, let's say after an initial treatment with a CDK4/6 and an AI. So we will have some patients that are third line technically not a lot of patients will be second line, but I think the large majority will be and they were a pure second line study. Is that great?

Yes, makes a lot of sense. Yes. I really appreciate the clarification.

Thank you.

Next question comes from the line of Jonathan Miller with Evercore ISI. Your line is open.

Hi guys. Thanks so much for squeezing in my follow up here. I figured since nobody's asked about it, I'd love to ask one question about the upcoming KRAS PROTAC programs that you're working on, the G12D and the PAN KRAS that you discussed during your prepared remarks. Can you compare these Programs to other G12D or PAN KRAs approaches? And how do you think a Degrader is going to be better suited than some of the other approaches, notably the inhibitors? How will a Degrader compare to like a Revmed, like molecular glue and RAS approach?

Yes, great question and thanks. And yes, we're very excited about our KRAS programs, GWLT and the PAN KRAS. And Angela and Noah can discuss the answers to the questions you're posing in terms of the profile and what it looks like in terms of the competition.

Sure, we've been actively comparing both our G12D PROTAC lead degrader to the inhibitors that have been described and have shown superiority. And we've disclosed some of those data. But we've been also actively comparing both our G12D and our PAN PROTAC degraders in a range of non clinical models to examine the known inhibitors that are out there. And so, generally we're looking really very favorable with respect to our non clinical profile and we're very encouraged to pursue these molecules in clinical studies. So I'm going to hand it over to Noah for further commentary.

Thanks, Angela. So, I guess I can address just the comparative part, but look, we haven't entered the clinic yet, forward looking and something we're excited about for next year. But I think what we've seen from the competition suggests that there still is opportunity. So when we look at the first data, for example, I won't address the revolution, but you look at KRAS G12d degrader and we see that there's modest ORR and there are some liver toxicities at higher doses. These are opportunities for us to catch up, differentiate and demonstrate first in class, which would be needed in this space. And I think we could go through those types of specifics for other agents, but probably a little premature for us right now.

And this concludes our question and answer session. I will turn the call back over to John Huston.

Thank you. And thanks everybody for calling into our first ever earnings call, and hopefully we'll be able to give you updates over the coming months of the data sets we’ll be getting from the phase clinical trials. Thank you for your time this morning. Appreciate it.

This concludes today’s conference call. You may now disconnect.